4 Nov 2008 07:00
AdEPT Telecom Plc
("AdEPT" or the "Company")
Interim results for the 6 months ended 30 September 2008
AdEPT, a leading independent provider of award-winning telecommunications services for landline calls, line rental and broadband, announces its results for the 6 months ended 30 September 2008.
Highlights
Financial
Operational
Change of Company broker
Chairman's Statement
"I am pleased to be able to announce a strong set of results for the first half of the year. Our sales revenues have increased by 59% following the acquisition of Telecom Direct Limited ("Telecom Direct"). This acquisition has enabled us to bid for larger, longer term contracts, and in particular to enter the data market at a different level to the one at which we had previously operated. It positions AdEPT to service larger customers on longer term contracts, providing us with more stable revenues, albeit at somewhat lower margins. The successful integration of the Telecom Direct business had largely been completed on schedule by the first half of the year and yielded the planned cost savings. Consequently the growth in net margin of 34% was matched by a 32% rise in underlying EBITDA.
Customer churn remains under control, at levels slightly below industry averages and new sales are strong. We have continued to develop our dealer channel, which is now one of the most powerful in the sector, and we have consistently grown the level of new sales for the first 9 months of 2008. The Company has strengthened many of its' Key Performance Indicators with Direct Debit customers now representing 69% of sales (2007: 63%) and fixed fee charges (such as line rental or broadband) now representing 42% of revenue (2007: 31%). AdEPT is now one of BT Openreach's 10 largest customers.
All acquisition earn-out payments have been completed and we continue to generate strong free cash flow. The business has no further earn-out payments to make and therefore we consequently expect to pay down our debt more rapidly in future periods."
Financial review
Turnover for the first six months was £14.76 million (2007: £9.27 million). This in turn has generated underlying EBITDA of £1.7 million (2007: £1.3 million) and reflects our ability to continue to generate industry leading EBITDA margins of 11.6%.
The strength of the Company's consolidated balance sheet has improved compared to the same period last year, with net assets of £26.21 million (2007: £20.46 million). The Company continues to generate positive cash with 84% of underlying EBITDA being converted into operating cash in the period under review. Net debt decreased to £11.08 million (2007; £11.30 million) following the commencement of the repayment of the borrowings in relation to the Telecom Direct acquisition.
Earnings per share (adjusted for amortisation and non-recurring costs) was 4.84p in the six months to 30 September 2008 (2007: 3.99p). It is the Board's intention to pay dividends in the future, however, at this stage in the Company's development the Board intends to retain surplus funds to grow the business.
As part of the process of complying with IFRS 2, the Company has taken a charge against profits of £10,000 in the first half year to cover the notional cost of stock options and warrants awarded to executives and employees.
Business review
Organic sales have remained high over the last six months as a result of increasing the number of business partners selling our services and cross-selling to our existing customers using our own call centre.
We have focused intently on improving retention levels across the customer base through increased investment in both customer services personnel and systems. As a result gross churn continues to be lower than this time last year.
The longer term stability of the customer base has been helped by the increasing proportion of line rental customers being on a minimum 12 month contract, now up to 37% of total revenues (2007: 29%). We have also been successful in continuing to increase the proportion of revenue from business customers, now up to 95% of total revenues (2006: 91%).
Change of Company broker
We are pleased to announce the appointment of Strand Partners Limited as the Company's brokers with immediate effect, in addition to their continuing appointment as the Company's Nominated Adviser.
Acquisitions
In June 2007 the Company acquired 5,000 small business customers from Fizz Telecom Limited. In this half year the final earn-out payment of £190,000 was made.
In addition, in April 2008 the final earn-out payment of £400,000 was made for Telecom Direct.
The business has no further earn-out payments to make and therefore we consequently expect to pay down our debt finance more rapidly in future periods.
Outlook
Our increased scale positions us well to face the challenges of an uncertain economic climate, and we look forward to the future with confidence.
Finally, I would like to offer my sincere appreciation to our customers, our staff and our business partners for their commitment and support to AdEPT and I look forward to continuing to work together with them in the future.
Roger Wilson
4 November 2008
Enquiries
AdEPT Telecom
Ian Fishwick, (0870) 190 9125
Strand Partners
Simon Raggett
David Altberg, (020) 7409 3494
UNAUDITED CONSOLIDATED INCOME STATEMENT
| Six months ended | Year ended | |||
| 30 September | 30 September | 31 March | ||
| 2008 | 2007 | 2008 | ||
| Note | £'000 | £'000 | £'000 | |
| REVENUE | 5 | 14,762 | 9,271 | 23,618 |
| Cost of sales |
| (9,508) | (5,676) | (14,864) |
| GROSS PROFIT | 5,254 | 3,595 | 8,754 | |
| Administrative expenses |
| (5,356) | (3,158) | (8,843) |
| OPERATING PROFIT/(LOSS) | (104) | 437 | (89) | |
| Total operating profit - analysed: | ||||
| Operating profit before non-recurring costs, amortisation | ||||
| depreciation and amortisation | 1,717 | 1,304 | 3,280 | |
| Non-recurring costs | (654) | - | (1,381) | |
| Depreciation of tangible fixed assets | (100) | (46) | (119) | |
| Amortisation of intangible fixed assets | (1,067) | (821) | (1,869) | |
| Total operating profit/(loss) | (104) | 437 | (89) | |
| Finance costs | (585) | (217) | (653) | |
| Finance income |
| 1 | - | 4 |
| PROFIT/(LOSS) BEFORE INCOME TAX | (688) | 220 | (738) | |
| Income tax expense |
| (14) | (200) | (105) |
|
|
|
| ||
| PROFIT/(LOSS) FOR THE PERIOD |
| (702) | 20 | (843) |
| Attributable to: | ||||
| Equity holders of the parent | (702) | 20 | (843) | |
| Earnings per share | ||||
| Basic earnings per share (pence) | 3 | (3.33)p | 0.10p | (4.00)p |
| Diluted earnings per share (pence) | 3 | N/a | 0.09p | n/a |
| Adjusted earnings per share, after adding back | ||||
| amortisation and non-recurring costs | ||||
| Basic earnings per share (pence) | 3 | 4.84p | 3.99p | 11.43p |
| Diluted earnings per share (pence) | 3 | 4.30p | 3.66p | 10.49p |
UNAUDITED CONSOLIDATED BALANCE SHEET
| 30 September | 30 September | 31 March | ||
| 2008 | 2007 | 2008 | ||
| £'000 | £'000 | £'000 | ||
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 21,467 | 15,450 | 22,514 | |
| Property, plant and equipment | 187 | 178 | 280 | |
| Deferred income tax |
| 679 | 18 | 713 |
|
|
| 22,333 | 15,646 | 23,507 |
| Current assets | ||||
| Trade and other receivables | 3,812 | 3,338 | 4,304 | |
| Cash and cash equivalents |
| 63 | 1,475 | 155 |
|
|
| 3,875 | 4,813 | 4,459 |
| Total assets | 26,208 | 20,459 | 27,966 | |
| EQUITY AND LIABILITIES | ||||
| Current liabilities | ||||
| Trade and other payables | 5,946 | 4,153 | 6,597 | |
| Borrowings | 1,712 | - | 103 | |
| Income tax | - | 645 | 923 | |
|
| 7,658 | 4,798 | 7,623 | |
| Non-current liabilities | ||||
| Borrowings |
| 9,427 | 5,000 | 10,527 |
| Total liabilities |
| 17,085 | 9,798 | 18,150 |
| Equity attributable to shareholders of the parent | ||||
| Share capital | 2,107 | 2,107 | 2,107 | |
| Share premium | 7,965 | 7,965 | 7,965 | |
| Retained earnings |
| (949) | 589 | (256) |
| Total equity and liabilities |
| 26,208 | 20,459 | 27,966 |
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to equity holders of parent | ||||
| Share | Share | Retained | Total | |
| capital | premium | earnings | equity | |
| £'000 | £'000 | £'000 | £'000 | |
| Equity at 1 April 2007 | 2,107 | 7,965 | 552 | 10,624 |
| Profit for six months ended 30 September 2007 | - | - | 20 | 20 |
| Share based payments | - | - | 17 | 17 |
| Total recognised income and expense for the six | ||||
| months to 30 September 2007 | - | - | 37 | 37 |
| Balance at 30 September 2007 | 2,107 | 7,965 | 589 | 10,661 |
| Loss for six months ended 31 March 2008 | - | - | (863) | (863) |
| Share based payments | - | - | 17 | 17 |
| Total recognised income and expense for the six | ||||
| months to 31 March 2008 | - | - | (846) | (846) |
| Balance at 31 March 2008 | 2,107 | 7,965 | (256) | 9,816 |
| Loss for six months ended 30 September 2008 | - | - | (702) | (702) |
| Share based payments | - | - | 10 | 10 |
| Total recognised income and expense for the six | ||||
| months to 30 September 2008 | - | - | (692) | (692) |
| Balance at 30 September 2008 | 2,107 | 7,965 | (949) | 9,123 |
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
| Six months ended | Year ended | |||
| 30 September | 30 September | 31 March | ||
| 2008 | 2007 | 2008 | ||
| £'000 | £'000 | £'000 | ||
| Cash flows from operating activities | ||||
| Profit before income tax | (688) | 220 | (738) | |
| Depreciation and amortisation | 1,167 | 867 | 1,989 | |
| (Profit)/loss on sale of fixed assets | - | - | - | |
| Share based payments | 10 | 18 | 35 | |
| Net finance costs | 585 | 217 | 644 | |
| Profit held in trust | - | - | (31) | |
| (Increase)/decrease in trade and other receivables | 493 | 214 | 79 | |
| Increase/(decrease) in trade and other payables | (111) | (321) | (137) | |
| Cash generated from operations | 1,456 | 1,215 | 1,839 | |
| Income taxes paid | (16) | (309) | (709) | |
|
| ||||
| Net cash from operating activities | 1,440 | 906 | 1,130 | |
| Cash flows from investing activities | ||||
| Interest received | 1 | 1 | 4 | |
| Interest paid | (586) | (140) | (665) | |
| Acquisition of subsidiary, net of cash acquired | - | - | (5,144) | |
| Purchase of intangible assets | (607) | (1,321) | (2,009) | |
| Purchase of property, plant and equipment | (7) | (61) | (196) | |
| Net cash (used in)/from investing activities | (1,199) | (1,521) | (8,010) | |
| Cash flows from financing activities | ||||
| Expenses paid in connection with share issue | - | - | - | |
| Repayment of finance leases | (22) | - | (5) | |
| Repayment of borrowings | (511) | - | (1,500) | |
| Increase of bank loan | 200 | 750 | 7,200 | |
| Net cash (used in)/from financing activities | (333) | 750 | 5,695 | |
|
| ||||
| Net increase/(decrease) in cash and cash equivalents | (92) | 135 | (1,185) | |
| Cash and cash equivalents at beginning of period/year | 155 | 1,340 | 1,340 | |
| Cash and cash equivalents at end of period/year | 63 | 1,475 | 155 | |
| Cash at bank and in hand | 63 | 1,475 | 155 | |
| Bank overdrafts | - | - | - | |
| Cash and cash equivalents | 63 | 1,475 | 155 | |
ACCOUNTING POLICIES
1 Nature of operations and general information
AdEPT Telecom plc is a leading independent provider of telecommunications services with award winning customer service. The Group is focused on delivering a complete telecommunications service for small and medium sized business customers with a targeted product range including landline calls, line rental, data, mobile and other services.
AdEPT Telecom plc is the Group's ultimate parent company and is incorporated and domiciled in the UK. The Company's shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.
The financial information set out in this interim report which has not been audited, does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31 March 2008, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
2 Basis of preparation and summary of significant accounting policies
Basis of preparation
The interim consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards (IFRS) as adopted by the EU as issued by the International Accounting Standards Board and in particular Interim Financial Reporting.
The interim consolidated financial statements have been prepared under the historical cost convention. The measurement bases and principal accounting policies of the Group are set out below.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 September 2008. Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from its activities. The Group obtains and exercises control through voting rights.
Unrealised gains on transactions between the Company and its subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Acquisitions of subsidiaries are dealt with by the purchase method. The purchase method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated balance sheet at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group's accounting policies. Goodwill is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group's share of the identifiable net assets (including intangibles) of the acquired subsidiary at the date of acquisition.
Revenue
Revenue is measured by reference to the fair value of consideration received or receivable by the Group for goods supplied and services provided, excluding VAT and trade discounts. Revenue is recognised upon the performance of services or transfer of the risks and rewards of ownership to the customer.
Revenue comprises of both invoiced and un-invoiced amounts for performance of network services supplied by the Group during the year. The network services, which include call revenues (billing for call minutes) and fixed charges such as line rental or broadband, are generally billed monthly in arrears. The revenue is recognised in the month to which the calls relate. Revenue from mobile commissions is recognised when the customers are connected to the relevant network.
Non-recurring costs
The operating profit/(loss) includes non-recurring costs, incurred by the Telecom Direct division, which will not recur in future periods. The bulk of these costs are represented by staff, property and leases, which when removed leave the underlying administrative costs for the business.
Investments
Shares in the Subsidiaries are valued at cost less provision for permanent impairment.
Intangible assets acquired as part of a business combination and amortisation
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the Group.
Intangible fixed assets continue to be subject to an impairment review on the first anniversary after acquisition, when appropriate lives are selected.
The intangible asset "customer base" is amortised to the income statement over its estimated economic life. The average estimated useful economic life of all the acquisitions has been estimated at 12 years (2007: 11 years).
Other intangible assets
Also included within intangible fixed assets are the development costs of the Group's billing and customer management system plus an individual license. These other intangible assets are stated at cost, less amortisation and any provision for impairment. Amortisation is provided at rates calculated to write off the cost, less estimated residual value of each intangible asset, over its expected useful life on the following bases:
| Customer management system | - | 3 years straight line |
| Other licences | - | Contract license period |
Property plant and equipment
Property plant and equipment are stated at cost, less depreciation and any provision for impairment. Depreciation is provided on all property plant and equipment at rates calculated to write off the cost, less estimated residual value of each asset, over its expected useful life on the following bases:
| Short term leasehold improvements | - | 5 years straight line |
| Fixtures and fittings | - | 3 years straight line |
| Office equipment | - | 3 years straight line |
| Computer software | - | 3 years straight line |
Leasing and hire purchase commitments
Assets held under finance leases and hire purchase contracts, which are those where substantially all the risks and rewards of ownership of the asset have passed to the company, are capitalised in the balance sheet and depreciated over their useful lives. The corresponding lease or hire purchase obligation is treated in the balance sheet as a liability.
The interest element of the rental obligations is charged to the income statement over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding.
Rentals under operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged to the profit and loss on a straight line basis, even if payments are not made on such a basis.
Income tax
Income tax is the tax currently payable based on taxable profit for the year.
Deferred income tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred income tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
The hive up of intangible assets between Group companies is not considered a business combination under IFRS 3 (Business Combinations) and therefore deferred income tax is not provided on the intangible customer base asset thus acquired by AdEPT Telecom plc.
Deferred income tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred income tax assets.
Deferred income tax liabilities are provided in full, with no discounting. Deferred income tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred income tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
Changes in deferred income tax assets or liabilities are recognised as a component of income tax expense in the income statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred income tax is also charged or credited directly to equity.
Pensions
The group contributes to personal pension plans. The amount charged to the income statement in respect of pension costs is the contribution payable in the year.
Capital instruments
The costs incurred directly in connection with the issue of debt instruments are charged to the income statement on a straight line basis over the life of the debt instrument.
Share based payments
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at which they are granted and is recognised as an expense over the vesting period, which ends on the date at which the relevant employees become fully entitled to the award. Fair value is appraised at the grant date and excludes the impact on non-market vesting conditions such as profitability and sales growth targets, using an appropriate pricing model for which the assumptions are approved by the Directors. In valuing equity-settled transactions, only vesting conditions linked to the market price of the shares of the Company are considered.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.
At each balance sheet date, the cumulative expense (as above) is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non market conditions, the number of equity instruments that will ultimately vest or in the case of an instrument subject to a market condition, be treated as vesting described above. The movement in the cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Financial risk management objectives and policies
The Group's principal financial liabilities comprise bank loans, overdrafts, finance leases, trade payables and hire purchase contracts. The main purpose of these financial liabilities is to finance the Group's operations and acquisitions. The Group has various financial assets such as trade receivables and cash, which arise directly from its operations.
The Group also enters into interest rate swaps. The purpose is to manage the interest rate risks arising from the Group's sources of finance.
It is, and has been throughout 2007 and 2008, the Group's policy that no trading in derivatives shall be undertaken.
The main risks arising from the Group's financial instruments are cash flow interest rate risk, liquidity risk and credit risk. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.
Interest rate risk
The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates.
The Group's policy is to manage its interest cost using a mix of fixed and variable rate debts. The Group's policy is to keep a maximum of 75% of its borrowings at fixed rates of interest. To manage this, the Group enters into interest rate swaps, in which the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed upon notional principal amount. These swaps are designated to hedge underlying debt obligations. At 30 September 2008, after taking into account the effect of interest rate swaps, 72% of the Group's borrowings are at a fixed rate of interest (2007: Nil).
Credit risk
The Group's policy is to monitor trade and other receivables and avoid significant concentrations of credit risk. The principal credit risk arises from trade receivables. Aged receivables reports are reviewed regularly and significant items brought to the attention of senior management.
Liquidity risk
The Group seeks to manage liquidity risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans and finance lease contracts. 15% of the Group's borrowings will mature in less than one year at 30 September 2008 (2007: Nil) based on the carrying value of borrowings reflected in the financial statements.
Currency risk
AdEPT's operations are handled entirely in sterling.
Significant accounting judgements and estimates
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
The estimated life of intangible asset customer bases:
Intangible asset customer bases are amortised over their useful lives. They are subject to an impairment review on the first anniversary after acquisition, when appropriate lives are selected. Useful lives are based on the management's estimates of the period that assets will generate revenue. Changes to estimates could result in significant variations in the carrying value and amounts charged to the consolidated income statement in specified periods.
The estimated liability of the deferred consideration of intangible asset customer bases:
The estimate of the deferred consideration liability is based upon the revenue and margins that are expected to be generated by the customer base under the terms of each Sale and Purchase agreement. Actual revenue may be materially different to that estimated and could result in significant variations in the carrying value of the intangible asset customer bases and deferred consideration liabilities and respective amounts charged to the consolidated income statement in specified periods.
3 Earnings per share
| Six months ended | Year ended | ||
| 30 September | 30 September | 31 March | |
| 2008 | 2007 | 2008 | |
| £'000 | £'000 | £'000 | |
| Earnings for the purposes of basic and diluted | |||
| earnings per share | |||
| (Loss)/profit for the period attributable to equity holders | |||
| of the parent | (702) | 20 | (843) |
| Amortisation | 1,067 | 821 | 1,869 |
| Non-recurring costs | 654 | - | 1,381 |
| Adjusted profit attributable to equity holders of the | |||
| parent, adding back amortisation and non-recurring costs | 1,019 | 841 | 2,407 |
| Number of shares | |||
| Weighted average number of shares used for earnings | |||
| per share | 21,067,443 | 21,067,443 | 21,067,443 |
| Dilutive effect of share plans | 2,641,697 | 1,957,070 | 1,891,697 |
| Diluted weighted average number of shares used to | |||
| calculate fully diluted earnings per share | 23,709,140 | 23,024,513 | 22,959,140 |
| Earnings per share | |||
| Basic earnings per share (pence) | (3.33)p | 0.10p | (4.00)p |
| Fully diluted earnings per share (pence) | N/a | 0.09p | N/a |
|
|
| ||
| Adjusted earnings per share, after adding back | |||
| amortisation and non-recurring costs | |||
| Adjusted basic earnings per share (pence) | 4.84p | 3.99p | 11.43p |
| Adjusted fully diluted earnings per share (pence) | 4.30p | 3.66p | 10.49p |
|
|
|
|
|
Earnings per share is calculated by dividing the profit attributable to equity holders of the parent by the weighted average number of ordinary shares in issue.
Adjusted earnings per share is calculated by dividing the profit attributable to equity holders of the parent (after adding back amortisation) by the weighted average number of ordinary shares in issue.
Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options, assuming dilution through conversion of all existing options. The adjustment for the dilutive effect of share options in the six months ended 30 September 2008 and year to 31 March 2008 has not been reflected in the calculation of the diluted loss per shares as the effect would be anti-dilutive.
4 Acquisitions
In June 2007 AdEPT acquired a customer base from Fizz Telecom limited comprising 5,000 business customers. In December 2007, AdEPT acquired 100% of the share capital of Oxtalk Limited and its subsidiary Telecom Direct Limited, both companies are registered in England and Wales. The fair value tables in respect of these acquisitions can be summarised as follows:
| Six months ended | Year ended | ||||||
| 30 September | 30 September | 31 March | |||||
| 2008 | 2007 | 2008 | |||||
| £'000 | £'000 | £'000 | |||||
| Cash | - | 1,028 | 5,848 | ||||
| Deferred consideration | - | 686 | 1,101 | ||||
| Acquisition costs | - | 55 | 427 | ||||
| Total consideration | - | 1,769 | 7,376 | ||||
| Fair value of net liabilities/(assets) acquired | - | - | 2,041 | ||||
| Intangible asset/customer base acquired | - | 1,769 | 9,417 | ||||
5 Revenue
Following acquisitions the customers are fully integrated into a single billing and customer service platform. Whilst turnover can be separately identified by acquisition, costs cannot. Calls are routed across various network operators and the overhead base serves all customers. The analysis of turnover by existing and acquired businesses is as follows:
| Six months ended | Year ended | ||
| 30 September | 30 September | 31 March | |
| 2008 | 2007 | 2008 | |
| £'000 | £'000 | £'000 | |
| Existing businesses at start of period | 14,762 | 8,155 | 16,437 |
| Businesses acquired in the period | - | 1,116 | 7,181 |
| Total sales | 14,762 | 9,271 | 23,618 |