RNS Number:8521T
2waytraffic N.V.
28 March 2007
Text Box: Press Release
28 March 2007
2waytraffic ("2waytraffic" or the "Company")
Preliminary results for the 12 months ended 31 December 2006
2waytraffic, the AIM listed interactive media content provider, today issued the
following annual preliminary results for the 12 months ended 31 December 2006.
Financial Highlights
* Turnover increased 533% to EUR 29.3 million (#19.7 million) versus EUR 5.5
million (#3.7 million) in 2005 driven by increasing demand for interactive
content and geographic expansion
* Underlying normalised EBITDA of EUR 9.1 million (#6.1 million) versus EUR
1.4 million (#0.9 million) in 2005
* Strong performance of existing 2waytraffic business contributing EUR 8.4
million (#5.7 million) to normalised EBITDA prior to acquisition of "Who
Wants To Be A Millionaire?" (WWTBAM) and Celador International
* Reported operating result (EBIT) of EUR 4.4 million (#3.0 million) versus
EUR 0.8 million (#0.5 million) in 2005 after charging non-recurring non-cash
expenses of EUR 2.9 million (#1.9 million) relating to the Company's share
schemes
* Normalised PBT (result before tax) rose from EUR 1.1 million (#0.75
million) to EUR 7.7 million (#5.2 million) in 2006
* Reported PBT rose from EUR 0.7 million (#0.5 million) of EUR 4.8 million
(#3.2 million)
* Normalised EPS amounts to EUR 0.08 (#0.05) whereas reported EPS is EUR
0.04 (#0.03).
Operational Highlights
* Four acquisitions completed during the period including IPTV specialist
HIPTV, mobile content business Emexus Group, content developer Intellygents
and the transformational acquisition of WWTBAM and Celador International
* The Company established operating companies in Eastern Europe, the
Nordics, the Benelux, the UK (through Celador) and a joint venture in Spain
* To support this geographical expansion 2waytraffic International was
established to distribute the extended format catalogue of over 200 formats.
Ed Louwerse, former head of international sales at Endemol, joined the
Company on 1 February 2007 as head of 2waytraffic International
* Organically, the Company has maintained its strong trading in its
participation TV business, particularly in the Netherlands, Poland, Sweden
and Belgium
* Prime time content expansion with programmes such as WWTBAM, "Take It Or
Leave It" and "Top Chef"
* The Mobile Content division expanded its activities into South Africa,
Indonesia and Australia
* Recent contract wins include sales of "Last One Standing" in Turkey and
Greece, "WWTBAM" in China, Slovakia, Slovenia and the United States (in
cooperation with Buena Vista)
Commenting on the results Kees Abrahams, CEO, said: "2006 has been an extremely
busy, rewarding and exciting year for 2waytraffic that saw us deliver against
the ambitious strategy we set out at the time of the IPO. The strong organic
growth has been driven by a combination of new format launches and international
expansion. We have also been busy on the acquisition front and the benefits of
the four acquisitions we have made will now start to come through for each of
the acquired businesses and for the Group as a whole in the current year. The
acquisitions have opened up new territories, prime time slots and an enlarged
talent pool, demonstrating the excellent fit with our strategy. In 2006, good
progress was made across all divisions and we are now positioned as a key player
in the international market for interactive entertainment content."
"The current year has started well with trading across the Group as a whole in
line with our expectations and we are confident that the enlarged Group is well
placed to deliver another strong performance in 2007 and beyond."
Enquiries:
2waytraffic
Jonni Abbenhuis +31 (0) 35 750 80 00
Kees Abrahams
Financial Dynamics
Charles Palmer / Nicola Biles +44 (0) 20 7831 3113
Chief Executive's Statement
Overview and Strategy
In 2006, 2waytraffic made significant progress in delivering against the
strategy set out at the time of the IPO in April 2006, combining strong organic
growth with selective acquisitions. During the year the Group listed on AIM, it
identified and completed four strategic acquisitions and extended its geographic
footprint considerably. The successful implementation of this strategy is
reflected in the results which saw television, mobile and digital operations
deliver turnover growth of 533%, increasing from EUR 5.5 million in 2005 to EUR
29.3 million in 2006. Reported operating profit increased from EUR 0.8 million
to EUR 4.4 million in the year and the underlying normalised EBITDA increased
from EUR 1.4 million to EUR 9.1 million.
2waytraffic's strategy is to build a high quality content catalogue by creating
new formats and by acquiring creative businesses and properties. In the year, we
have developed in-house new formats such as "Last One Standing" and "The Ring" .
With acquisitions such as prime time content developer Intellygents and the
world renowned format WWTBAM, we have extended our prime time offering.
Alongside both of these forms of development, we continue to seek opportunities
to implement interactive elements in our growing format catalogue.
Building a strong international distribution network is another important aspect
of our strategy. We have continued to expand our global footprint through the
start up of operating companies in the Benelux, Spain, Eastern Europe, the
Nordic region and the USA. The launch of 2waytraffic UK in the current year
provides us with a presence in the important UK media market. Four acquisitions
have been successfully completed, giving access to a large number of additional
(broadcast) clients globally to whom further formats may be sold. The mobile
division further rolled out its business into Indonesia, Australia and South
Africa and we continue to explore opportunities in new geographies across all
divisions.
Current trading is in line with our own expectations and we will look to further
develop the enlarged business following the progress that we made in 2006. The
reorganisation of the Company following the acquisitions is well in hand and we
are beginning to see the benefits to the Company of being a larger organisation
in the international markets which we serve. While uncertainty remains in terms
of legislation of our participation TV business in Europe, the Board believes
that greater regulation of these markets will further cement the Company's
position as a best of breed provider of participation TV programmes.
2waytraffic is now well positioned as one of the leading developers and
exploiters of interactive and other content in a global media market which is
adapting to the convergence of delivery platforms and growing demand for high
quality interactive content.
Review of operations
2waytraffic is an international developer and exploiter of revenue generating
content for the television, mobile and digital markets. The Group currently has
sold its formats into more than 40 territories, produces in excess of 8,000
hours of programming per year and has a catalogue of over 200 proprietary
formats. In response to the rapidly changing media landscape, 2waytraffic looks
to extend the reach of its content by leveraging it across all three platforms.
Television
The television division owns and develops a portfolio of interactive formats for
day-time,
prime-time and late night programmes, offering broadcasters an additional
interactive revenue stream and viewers a range of popular quiz, entertainment
and reality content.
The Company's strategy is to develop and create a content library of high
quality television formats which can be exploited interactively in the day,
night and primetime schedules. Consistent with this strategy are the
acquisitions of Intellygents, WWTBAM and the Celador International catalogue. In
addition to acquiring formats we have also developed our own new formats
including "Last One Standing", which further extends our prime time offering.
Organically, the Company has maintained its strong trading in its participation
TV business, particularly in the Netherlands, Poland, Sweden and Belgium. New
broadcaster clients include TV4 in Sweden, RTL in Holland, MBC in the Middle
East and Game Show Network in the US, Challenge TV in the UK and Alpha in
Greece.
Mobile
The mobile division introduced several new chat and dating services and a mobile
Game On service. Additionally it expanded its activities into Indonesia,
Australia and South Africa. To fully make use of synergy and efficiency
advantages, Emexus and the 2waytraffic mobile division are currently being
integrated into a new company called 2waytraffic Mobile. This process is
expected to be finalised in Q2 2007.
Digital
The Group's smallest business is its digital division which was created at the
beginning of 2006 to meet the growing demand for digital content. The Directors
believe that this demand will be driven by a growth in the digital audience as
well as advertisers seeking to reach their target audiences via the internet.
In March 2006 the Company acquired IPTV specialist HIPTV with which the Company
intends to leverage its existing skills and formats to meet the future needs of
both consumers and advertisers. An example of this is the creation of an online
game of the Intellygents' game show format "Take It Or Leave It" for Challenge
TV in the UK. The market is still in its infancy, but HIPTV has secured
promising new contract wins including the "Clip It" project for Dutch publisher
Telegraaf Tijdschriften Groep.
Acquisitions
2waytraffic successfully completed four acquisitions in 2006. In March the
Company acquired IPTV specialist HIPTV, forming the Company's digital division.
In June the Emexus Group was acquired to strengthen the Company's mobile content
business. This was followed by content developer Intellygents in August.
In December the transformational acquisition of WWTBAM and Celador International
was closed, bolstering the Company's status as a major player in the
international content market.
Celador International Limited is being integrated with the Groups international
distribution division, 2waytraffic International, starting from MIPTV in April
2007. From that moment on, 2waytraffic International will represent the world
renowned format WWTBAM as well as the entire combined 2waytraffic and CIL
catalogue consisting of over 200 proprietary formats.
In addition the Group has local operating companies in major markets such as the
Benelux, USA, the UK, Eastern Europe and the Nordic region.
Celador International's highly experienced staff will team up with the Hilversum
based 2waytraffic sales force, consulting producers, marketing and legal
professionals. Additionally, the Company will launch its focussed UK based
office, 2waytraffic UK.
Results
The positive momentum of the first six months of the year continued into the
second half with overall trading across the Group performing in line with the
Board's full year expectations for 2006. The second half weighting of the
business was driven by the timing of contracts and is expected to remain a
feature of the Company's financial performance in 2007.
Turnover
Turnover grew strongly in the second half of 2006, reaching EUR 29.3 million for
the full year, an increase of 533% on the EUR 5.5 million achieved in 2005.
In the Television division, sales increased over 440% to EUR 15.9 million,
principally due to a higher level of broadcast hours in the Netherlands and new
contracts in Belgium and Sweden.
The Mobile division, whose activities are primarily in the USA and Canada, has
continued to grow during the year and has finished in line with our expectations
with turnover of EUR 10.2 million, up 540% from the EUR 1.9 million in 2005.
This growth has been achieved despite higher slack rates in the USA and
increased media buy cost.
The Digital division reflects the contribution from HIPTV, acquired in March
2006. The Company continues to investigate the most suitable business model for
these activities and produced sales of EUR 0.2 million in 2006.
Group turnover includes EUR 1.8 million from the acquisition of WWTBAM and CIL
for the last ten days of the year.
Gross margin
Gross margin has grown 438% to EUR 16.8 million (2005: EUR 3.8 million). In the
Mobile business, margins improved following the acquisition of Emexus earlier in
the year, more than offsetting the increased slack in that business. The gross
margins for Television have decreased from 79% to 55% as a result of new clients
requesting that 2waytraffic takes full control of the participation TV projects
including, but not limited to, the collection of income from the (telecom)
service providers. This treatment does not affect the net profit generated from
these projects and has positive implications for cash flows.
Operating expenses excluding share scheme cost
Operating expenses grew 376% primarily as a result of the further growth in
personnel. As at 31 December 2006, the company employed over 150 employees,
including 30 based at CIL's offices in London.
Operating result
The reported operating result was a profit of EUR 4.4 million (2005: EUR 0.8)
million after deducting non cash profit and loss charges under share schemes of
EUR 2.9 million.
The underlying normalised EBITDA (excluding share scheme expenses) rose from EUR
1.4 million in 2005 to EUR 9.1 million in 2006 and can be reconciled as follows:
Year ended Year ended
31 December 31 December
2006 2005
Operating result 4,436,233 832,835
Employee benefit 2,867,930 353,000
expense
Depreciation 194,266 33,182
Amortisation 1,570,382 152,284
Normalised EBITDA 9,068,811 1,373,301
Result before tax
PBT rose from a profit of EUR 0.7 million to a profit of EUR 4.8 million (after
Employee benefit expenses).
Net interest
The Group's reported net interest income of EUR 0.04 million is a result of
interest earned on the proceeds of the IPO funds raised in April 2006 net of
interest on loans and other financing changes. This includes EUR 0.2 million
interest on the loan that was entered into in connection with the acquisition of
Celador and WWTBAM.
Tax
The tax charge for the year amounts to EUR 1.9 million, a rate of 39,3% on the
profit before tax. The reason for this higher than average charge is the
disallowance for tax purposes of the non-cash share scheme expenses. As of 2007
the Company for their Dutch activities is subject to a lower tax rate of 25.5%
(as compared to 29.6% previously).
Net result and Dividend
The net result for 2006 amounts to EUR 2.9 million. The Board does not propose
to pay a dividend at this time.
Balance sheet
At 31 December 2006, the net assets increased to EUR 104 million, compared to
EUR -/-0.5 million at 31 December 2005.
As at 31 December 2006, the total assets of the group amounted to EUR 301.7
million against EUR 4.0 million at 31 December 2005. The increase in assets has
mainly been the result of the acquisitions and proceeds of fundraisings during
the year. At the year end, the balance sheet included intangible fixed assets
amounting to EUR 230 million. These comprise formats, licences and goodwill
arising as a result of acquisitions during the year, of which the WWTBAM
acquisition formed the largest part with attributable format valuation of EUR
141 million.
The Company has carried impairment reviews in December 2006 and has concluded
that no adjustment is required to the carrying values of assets.
Cashflow
The Group showed a net cash inflow of EUR 5.5 million over the year, compared to
a net outflow of EUR 0.6 million in the previous year. Within this, the group
generated an EBITDA (adjusted for non-cash items) of EUR 9.1 million, with
negative working capital movements of EUR 2.1 million accounting for most of the
difference. The year end cash position of EUR 36.7 million largely resulted from
the fundraising at the time of the IPO in April 2006 and surplus cash acquired
as a result of the acquisition of Millionaire and related companies. Of this,
approx EUR 17 million will be repaid to the vendors of the Millionaire and
Celador companies during the first half of 2007.
Earnings per share
Based on the weighted average number of shares for the year ended 31 December
2006 of 72.8 million (31 December 2005: 1.8 million) and the reported net profit
for the year of EUR 2.9 million the reported EPS for the Group amounted to EUR
0.04 per share. The diluted EPS for the period is a profit of EUR 0.03 per share
after allowing for the dilutive effect of approximately 4.9 million shares
expected to be issued in respect of earn-outs and share options. Normalised EPS
amounts to EUR 0.08 (#0.05) whereas normalised diluted EPS is EUR 0.07 (#0.05).
Amortisation
The amortisation reflects the depreciation of intangible assets (formats,
goodwill and licences ) and has increased to EUR 1.6 million due to the
acquisitions during the year. It includes amortisation in relation to WWTBAM and
other assets acquired with Celador for the final ten days of 2006. The
amortisation figure will increase significantly in 2007 when a full year is
included.
Borrowings
In connection with the acquisition of Celador and WWTBAM, the Company entered
into a loan facility for #60 million (EUR 89.5 million) with the Royal Bank of
Scotland. This is a five year facility, repayable as to #8.4 million in 2007 and
#12.9 million annually thereafter until 2011. The loan is multi currency and was
drawn 50% in GPB and 50% in EUR at the year end. The loan carries interest rates
linked to a margin over Libor or Euribor. At the time of initial drawing an interest
rate swap was entered into in respect of the Euro element of the loan.
The Group also entered into a revolving credit facility agreement with the Royal
Bank of Scotland for a five year period for #10 million. This provides funds for
working capital and general purposes. At the year end there were no drawings on
this facility.
Both the bank loans and the revolving credit facilities are secured by charges
over the Group's assets. The borrowing arrangements require compliance with
usual covenants relating to interest cover, borrowing ratios to EBITDA, and cash
covers.
Current trading
Our newly developed format "Last One Standing" has received positive early
interest and has been optioned by broadcasters and production houses in Italy,
Germany, France, Spain and Israel whilst the show has also been sold to Turkey
and Greece.
Intellygents format "Take It Or Leave" started airing last February on Dubai TV
which covers 20 Middle Eastern countries and has also been commissioned for
another 30 episodes on UK's Challenge TV. "That's The Question", also developed
by Intellygents, has also been commissioned by Challenge TV and will start
airing the first of 60 episodes in May 2007.
Consistent with the plans set out in December 2006 for further territorial
expansion, the Company has signed deals for "Who Wants To Be A Millionaire" in
China, Slovakia and Slovenia, and extended its deal with Buena Vista in the US.
The format has also seen successful early pilots of increased in-programme
branded interactivity in Sweden with TV4.
The participation TV business in the Benelux, which is being performed in
cooperation with major terrestrial broadcasters, has seen a recent reduction in
call volumes as a result of negative publicity. 2waytraffic aims to be compliant
in each of the territories with the local statutory laws and regulations, but
the current evaluation of the effective Dutch Code of Conduct by the authorities
may result in the imposition of tighter regulations for interactive
applications.
In the UK ITV recently chose to take all its interactivity off air to perform an
audit in light of public and press concerns. A large number of its interactive
applications have been approved by the auditors and are now back on air,
including those within WWTBAM, leaving 2waytraffic's business in the UK
unaffected.
In other territories our participation TV business continues to perform well
with deals signed in a number of territories, including Sweden, Turkey, Spain
and Kenya with launch dates in Q1 and Q2.
Further new contract wins involve the recently started show "Christine Live" on
SBS6 in the Netherlands.
Overall, the current year has started well for the enlarged Group and the Board
is confident that 2007 will be another successful year for 2waytraffic.
Consolidated Income Statement
2006 2005
EUR EUR
Sales 29,308,539 5,503,635
Cost of sales (12,467,272) (1,656,279)
Gross margin 16,841,267 3,847,356
Personnel expenses (4,957,485) (1,563,803)
Other operating (2,814,971) (910,252)
expenses
Employee benefit (2,867,930) (353,000)
expenses
Depreciation (194,266) (35,182)
Amortisation (1,570,382) (152,284)
(12,405,034) (3,014,521)
Operating result 4,436,233 832,835
Interest income 629,882 218
Interest expense (588,238) (107,451)
Foreign exchange 337,577 (4,989)
result
Loss on partial sale (1,378) (12,335)
of subsidiaries
Result before taxation 4,814,076 708,278
Income tax expense (1,890,680) (335,509)
Net profit for the 2,923,396 372,769
year
Attributable to:
Equity holders of the 2,918,288 372,769
Company
Minority interest 5,108 -
2,923,396 372,769
Shares issued 130,396,163 1,800,000
Earnings per share 0,04 0,21
(EUR)
Diluted earnings per 0,03 0,21
share (EUR)
Reconciliation EBITDA
Operating result 4,436,233 832,835
Employee benefit 2,867,930 353,000
expense
Depreciation 125,329 35,182
Amortisation 1,639,319 152,284
Normalised EBITDA 9,068,811 1,373,301
Consolidated Balance Sheet
2006 2005
EUR EUR EUR EUR
Assets
Property, 1,422,910 87,472
plant and
equipment
Intangible 229,641,358 554,804
fixed assets
Deferred tax 3,036,996 112,754
assets
Total 234,101,264 755,030
non-current
assets
Trade and 30,961,513 3,192,648
other
receivables
Cash and cash 36,684,242 90,234
equivalents
Total current 67,645,756 3,282,882
assets
Total assets 301,747,019 4,037,912
Equity
Issued capital 1,303,962 18,000
Share premium 97,435,072 -
Other reserves 2,345,585 (895,593)
Treasury stock _ (378)
Unappropriated 2,918,288 372,769
result
Total equity 104,002,907 (505,202)
attributable
to equity
holders of the
parent
Minority 9,286 13,335
interest
Total equity 104,012,193 (491,867)
2006 2005
EUR EUR EUR EUR
Liabilities
Long-term 87,348,032 1,463,559
interest-bearing
loans and
borrowings
Deferred tax 44,732,672 -
liabilities
Long-term share 66,537 -
based payments
liability
Other long-term 7,763,599 353,000
liabilities
Total 139,910,841 1,816,559
non-current
liabilities
Short-term 24,250 2,043,824
interest-bearing
loans and
borrowings
Trade and other 52,746,365 613,496
payables
Provisions 756,119 -
Payable to tax 4,297,251 55,900
authorities
Total current 57,823,985 2,713,220
liabilities
Total 197,734,825 4,529,779
liabilities
Total equity and 301,747,019 4,037,912
liabilities
Consolidated Cashflow Statement
2006 2005
EUR EUR
Operating result 4,436,234 832,835
Depreciation and amortisation 1,764,848 187,466
Movement in receivables (13,610,615) (2,876,707)
Movement in current 11,562,396 1,240,420
liabilities
Equity settled share based 2,801,393 -
payments
Share based payments cash 66,537 353,000
Unrealised foreign exchange (35,843) -
gain/(loss)
Interest received 379,221 -
Income taxes received/(paid) (1,890,680) (335,509)
Net cash from operating 5,473,490 (598,495)
activities
Investments in tangibles (1,188,020) (56,700)
Investments in intangibles (4,134,253) (639,223)
Business combinations net of (131,821,931) -
cash acquired
Minority interest (10,535) 13,335
Movement in deferred tax (694,512) 301,803
balances
Net cash from investing (137,849,252) (380,785)
activities
Issue of share capital 92,455,159 -
Cost of issue share capital (6,596,611) -
Treasury stock - (378)
Movement in long-term loans 86,441,419 (36,105)
Repayment of borrowings (3,892,835) _
Interest paid _ (112,222)
Movement in deferred tax 562,638
assets
Net cash from financing 168,969,770 (148,705)
activities
Net cash flow 36,594,008 (1,127,985)
Cash and cash equivalents as 90,234 24,840
at 1 January
Cash and cash equivalents as 36,684,242 (1,103,145)
at 31 December
Notes to the financials
1. Accounting policies
Basis of accounting
Financial information has been prepared in conformity with International
Financial Reporting Standards (IFRS) as adopted by the European Union. IFRS have
been applied consistently to all the periods presented, unless otherwise stated.
Financial information is presented in euros (EUR). The consolidated financial
information has been prepared on a going-concern basis. The preparation of
financial information in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses.
Forward looking statements
Certain statements contained in this press release report constitute
forward-looking statements. These statements may include, without limitation,
statements concerning future results of operations, the impact of regulatory
initiatives on 2waytraffic's operations, its share of new and existing markets,
general industry and macro economic trends and 2waytraffic's performance
relative thereto, and statements preceded by, followed by or including the words
"believes", "expects", "anticipates" or similar expressions. These
forward-looking statements rely on a number of assumptions concerning future
events and are subject to uncertainties and other factors, many of which are
outside 2waytraffic's control that could cause actual results to differ
materially from such statements. A number of these factors are described (not
exhaustively) in the re-admission document dated 1 December 2006. The 2006
Annual Report will be available in early April 2007.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future
periods. The accounting policies have been applied consistently by Group
entities.
The accounting policies are in line with those applied in the financial
information included in the re-admission document dated 1 December 2006.
GAAP measurement
All figures in this press release relating to 2006 are unaudited and based on
IFRS. This report also contains a number of non-GAAP figures such as EBITDA,
normalised EBITDA, normalised EPS and EBIT. These non-GAAP figures should not be
viewed as a substitute for 2waytraffic's GAAP figures. 2waytraffic's non-GAAP
measures may not be comparable to non-GAAP measures used by other companies.
2waytraffic defines EBITDA as earnings before interest, tax, depreciation and
amortization. 2waytraffic uses 'normalised EBITDA' as as earnings before
interest, tax, depreciation, amortization and share scheme expenses. Either
definition of EBITDA has its limitations as an analytical tool and should not be
considered in isolation or as a substitute for analyses of the results as
reported under IFRS.
2waytraffic uses (normalised) EBITDA as a component of its guidance. Many
analysts use EBITDA as a component for their (cash flow) projections and is used
by financial institutions and credit-rating agencies as one of the key
indicators of borrowing potential. As such, 2waytraffic believes this is the
most appropriate way of informing the financial markets on certain aspects of
future company financial development. 2waytraffic does not view EBITDA as a
measure of performance. In all cases, a reconciliation of EBITDA and the nearest
GAAP measure (operating result) is provided.
2. Segmentation income statement - primary businesslines
Television
2006 2005
EUR EUR
Sales 15,895,261 3,597,982
Cost of (7,143,491) (762,204)
sales
Gross 8,751,769 2,835,778
margin
GM % 55% 79%
Mobile
2006 2005
EUR EUR
Sales 10,289,139 1,905,653
Cost of (4,623,380) (894,074)
sales
Gross 5,665,759 1,011,579
margin
GM % 55% 53%
Digital
2006 2005
EUR EUR
Sales 194,395 -
Cost of (167,787) -
sales
Gross 26,608 -
margin
GM % (86%) -
Other
2006 2005
EUR EUR
Sales 2,929,744 234,099
Cost of (532,614) (70,844)
sales
Gross 2,397,130 163,255
margin
GM % 82% 70%
Segmentation income statement - secondary (geography)
Sales 2006 2005
EUR EUR
Western Europe 16,134,417 3,058,718
North and 8,841,222 1,902,807
Central America
Eastern Europe 2,241,187 541,306
Other 2,091,714 804
29,308,539 5,503,635
3. Employee Benefit expenses
Employee benefit expenses comprise the following charges:
2006 2005
EUR EUR
Non-cash charge in relation to Employee Benefit 2,280,280 315,000
Trust (Note (i)below)
Non-cash charge in relation to SARS scheme (Note 66,537 -
(ii) below)
Non-cash charge in relation to exchange of 465,670 38,000
minority interest in US subsidiary for shares in
holding company
Non-cash charge in relation to share scheme Nordic 55,443 -
A.B.
2,867,930 353,000
(i) Under this trust, certain initial employees received certificates in 2005
and 2006 granted by an Employee Benefit Trust ("EBT") representing a number of
shares each. The EBT purchased an equivalent number of shares and held these on
behalf of the participants. On 23 November 2006, this plan was cancelled and the
underlying shares were transferred to the participating employees. As this is
now an equity settled share scheme, a charge has been made to the profit and
loss account in respect of the market value of the shares transferred. This
charge is a non-cash charge and will not recur after 2006.
(ii) During the year, the company established a Share Appreciation Plan under
which executive directors and employees may be offered stock appreciation rights
("SARS") which give the grantee a right to receive a cash sum based on any
increase in value of the notional shares subject to the SARS. In November 2006
the Company's employees were offered SARS to the value of EUR 3,047,310
representing 345,500 ordinary shares. These are exercisable at an increasing
proportion of the cash value of the increase in share price over the period to
July 2010. An annual charge to the profit and loss account will be made in
respect of the estimated cost over this period.
5. Income tax expense
2006 2005
EUR 1
Current tax expense
Current year (2,022,888) (33,706)
(2,022,888) (33,706)
Deferred tax expense
Origination and reversal of temporary (833,256) 2,110
differences
Benefit of tax losses recognised 965,464 (303,913)
132,208 (301,803)
(1,890,680) (335,509)
6. Cash and cash equivalents
2006 2005
EUR 1
Bank balances 36,680,765 88,099
Deposits - -
Cash 3,544 2,135
Cash and cash equivalents 36,684,309 90,234
Included with cash balance is an estimated #12 million (EUR 17 million) of
surplus net assets relating to the acquisition of WWTBAM, CIL and related
companies. This amount will be returned to the vendors of those companies during
the first half of 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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