DODS.L Regulatory News (DODS)

RNS Number : 7760S

Dods (Group) PLC

16 September 2010

 

16th September 2010

 

Dods (Group) PLC

Interim Results for the six months ended 30 June 2010

 

Financial Highlights

 

·; Revenue at £7.9m (2009: £11.3m)

·; Revenue from retained business at £6.3m (2009: £7.2m) *

·; EBITDA at a loss of £0.3m (2009: profit of £0.4m)**

·; EBITDA from retained business at a loss of £0.2m (2009: profit of £0.1m)

·; Normalised Loss before tax of £0.6m (2009: loss of £0.1m)***

·; Loss before tax of £1.6m (2009: loss of £1.2m)

·; Operating cash inflow £0.3m (2009: £0.8m)

·; Final decision on dividend payment deferred pending the outcome of ongoing discussions re possible Offer

 

Operational Highlights

 

·; Successful disposal of Education Division in March 2010

·; Strong performance given cyclicality of trading and the timing of the UK General Election

·; Coalition Government providing significant opportunities within Parliament portfolio

·; Public Sector cuts having effect within Political Knowledge - but provides opportunities going into 2011

·; Strong balance sheet with net cash and positive cash flow

 

Summary of Results	Six months to 30 June 2010	Six months to 30 June 2009
£'000	Unaudited	Unaudited
Total Revenue	7,853	11,281
Revenue from Retained Business	6,303	7,219
EBITDA**	(273)	360
EBITDA from Retained Business	(185)	119
Normalised loss before tax***	(593)	(85)
Loss before tax	(1,574)	(1,244)
Loss per share (basic)	(1.71)p	(0.98)p

 

* Retained business is excluding the sold Education division.

 

** EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, share based payments and non-trading items.

 

*** Normalised profit is stated before amortisation of intangible assets acquired through business combinations, share based payment charges, discontinued operations and non-trading items and related tax.

 

The Board believes that thesemeasures provide additional guidance to the statutory measures of performance of the business. These measures are not defined under adopted IFRS and therefore may not be directly comparable with other companies' adjusted profit measures.

 

Non-trading items are items which, in management's judgement, need to be disclosed by virtue of size, incidence or nature. Such items are included within the income statement caption to which they relate and are separately disclosed either in the notes to the consolidated financial statements or on the face of the consolidated income statement.

 

 

Gerry Murray, Chief Executive of Dods (Group) PLC, commented:

 

"The disposal of the Education Division was reported in our Year End results in March 2010. Following this disposal the Group has continued to develop as the leading political communications company in the UK and the EU.

 

The UK General Election has led to fundamental changes in the political marketplace, with knock-on impacts across the portfolio. The new coalition has increased the demand for parliamentary information, while the Public Sector cuts have had a short term negative effect on our open courses training business. Our Government unit has benefited from the perception amongst our clients that there are increased opportunities created by the proposed "privatisation" of Civil Service functions. Dods is well placed to benefit from the significant changes in the procurement of learning and development services by Government in the medium term.

 

The Board is conscious of the challenges across its markets over the remainder of 2010 and the limited visibility prior to the outcome of the Comprehensive Spending Review on October 20th, but believes that the net short-term effect of the above will not materially affect the results of the Group for the full year in 2010. The opportunities for organic growth in the medium term significantly exceed the threats."

 

For further information, please contact:

 

Dods

Gerry Murray, Chief Executive Officer 020 7811 5026

Rupert Levy, Group Finance Director

Kevin Hand, Non-Executive Chairman

 

 

OPERATING AND FINANCIAL REVIEW

 

Group Performance

 

The first half of 2010 saw revenue of £7.9m (2009: £11.3m). The 2009 numbers include the Education Division, which was sold in March 2010. Excluding this business, retained revenue moved from £7.2m in 2009 to £6.3m in 2010.

 

Within revenue from retained businesses, the main factor behind the fall in revenue was the UK General Election. This both created a hiatus before the May Election (including purdah in the Civil Service), but also moved a significant number of events (including one Civil Service Live Regional event) and advertising campaigns into the second half of the year.

 

EBITDA decreased from £0.4m to a loss of £0.3m in aggregate, and from £0.1m to a loss of £0.2m on the retained businesses. This reflects the movement of revenue into the second half of the year, as noted above.

 

The basic loss per share was 1.71 pence (2009: 0.98 pence).

 

Operating Review

 

Political Division

 

Revenue in the Political Division fell from £7.2m to £6.3m and EBITDA was at £0.3m (2009: £0.6m).

 

The cyclical nature of the Division was exacerbated in the first half of 2010 by the UK General Election. The hiatus before the Election was in line with our expectations, but created a slower first quarter than in previous years and delayed a number of events until after the Election. While June did show a good pick-up in business across the portfolio, the bulk of Group revenue will again be reported in the second half of the year.

 

The underlying business continues to trade strongly, with a continued importance of the digitally distributed information products. The UK Monitoring and EU Monitoring products both continue to show high retention rates and good levels of new business. The UK product is 14% ahead of 2009 revenue, while the EU product shows 12% growth. In addition, 2010 has seen the launch of the new Dods People product (formerly dodonline) which has significantly better functionality and data. This has sold particularly well post-Election.

 

Within the Government portfolio, the effect of the Election is clear. In the first half of 2009, the portfolio included one Civil Service Live Regional event and 10 smaller events. In contrast, in 2010 the Regional event was moved to the end of the year and only 5 smaller events were held. In the second half of the year, the portfolio will see Civil Service Live, one Civil Service Live Regional event and a significant increase in smaller events. In addition, Dods will be running a significant event on the theme of outsourcing of Civil Service functions.

 

While the Political Knowledge portfolio showed 24% revenue growth in 2009, the Election in May resulted in a much quieter half year for the Westminster Briefings unit. This unit delivered revenues 50% lower than the equivalent period in 2009 - a combination of the lack of policy changes prior to the Election and purdah in the immediate run up to the Election. The increase in new policy initiatives post Election and the need for information pertaining to the new coalition government will show this trend reverse in the second half of the year. Our Westminster Explained training business has taken the brunt of the government department cuts.

 

The Parliament portfolio was also affected by the Election. The House Magazine had a quieter run up to the Election, but then had a very strong post-Election boost, including a very successful Photoguide to the new parliament. As with the Government portfolio, the Parliament portfolio ran about half the number of events in the first half of the year compared with the same period in 2009, but has a very strong events programme scheduled for the latter half of the year, a significant proportion of which are already contracted.

 

The European portfolio was unaffected by the Election - and showed 5% growth over the 2009 performance. All areas were strong, but the largest growth was in events where we now have a settled team - which delivered 10 events in the half year, compared with 5 in 2009.

 

Our French political business, Le Trombinoscope, publishes its main Directories in the second half of the year. The first half of the year is therefore relatively quiet in terms of revenue.

 

In 2009, Fenman was restructured with the DVD/Manual element of the business refocussed on DVDs and reduced in the size of its overhead. In the first half of 2009 there was a "sell off" of the older product, while in 2010 sales were greatly reduced, but with a higher margin. Training Journal has also been refocussed, with a recently re-launched website.

 

Since the end of the first half of the year, Civil Service Live was held at Olympia in London. Despite the uncertainty caused by the Public Sector cuts, the event was a great success - with the new government using it as a platform to present its plans to the Civil Service. Attendees included 20 new Ministers, including David Cameron, Vince Cable, Francis Maude, George Osborne and Nick Clegg. 2010 saw a development in that the Senior Civil Service itself ran events at the Exhibition, resulting in 1,800 attendees from the Senior Civil Service, approximately 50% of the universe. The Prime Minister's speech was broadcast live on News 24 and ITN.

 

Education Division (Discontinued)

 

The discontinued Education Division had first half revenues of £1.6m (2009: £4.1m) and EBITDA of a loss of £0.1m (2009: Profit of £0.2m).

 

The results are for the period up until the 19th March 2010 (and the full six months in 2009), the date on which the Division was sold to Harper Collins.

 

Financial Review

 

The sale of the Education Division allowed the Group to repay all of the outstanding debt with Bank of Scotland. At 30th June 2010, net cash in the Group amounted to £1.1m as compared with net debt of £8.6m as at 30th June 2009 and £6.6m as at 31st December 2009.

 

During the year the Group generated £0.3m of operating cash flows (2009: £0.8m) and increased the level of capital expenditure as part of a project to upgrade a number of the IT systems. The cash flow remains positive and the Group is in a robust financial position.

 

The Capital Reduction proposed in the accounts for the Year Ended 31 December 2009 was approved at the AGM in June 2010. The Capital Reduction was completed in July 2010.

 

Outlook

 

Dods' business has historically been heavily weighted to the second half, and this has been exacerbated by the General Election in May 2010. The coalition government has come through any initial uncertainty as to whether it would prove viable, and this has resulted in strong sales for the upcoming Party Conference season and significant bookings against other smaller events in the Parliament unit.

 

The Public Sector cuts have significantly affected all companies aligned to the Civil Service. Within Dods, the Political Knowledge business is adversely affected, particularly within the Open Courses business. Bookings on these courses are significantly down against prior trends. Nevertheless, other areas within the business are seeing benefits from the Public Sector cuts, particularly within the Government events where private sector companies are increasingly seeking direct access to the Civil Service so as to participate in the ongoing (and increasing) privatisation of the Civil Service.

 

This will influence the Dods business going into 2011, with significant opportunities both in terms of events addressing this issue and for Dods itself to participate in the outsourcing of services. The Government has recently announced the proposed outsourcing of a significant amount of the Learning & Development spending and Dods are already involved in the tender process which should complete in the first half of 2011.

 

As announced on the 5th July, the Company has received a number of approaches which may or may not result in an Offer being made for the Company. The decision to pay a dividend in 2010 was announced in the year end announcement in March. In the light of the intervening announcement and notwithstanding the completion of the Capital Reduction, the Board has decided to defer a final decision on the payment of a dividend pending the outcome of the ongoing discussions regarding a possible offer for the Company.

 

There can be no certainty either about the general economic climate or about the specific effects within the Public Sector, but the Dods' Board believes that these uncertainties will not materially affect the outcome of the Group for the full year.

 

 

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT

 

We confirm that to the best of our knowledge:

 

1. the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

 

2. the interim management report includes a fair review of the information required by:

 

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

By order of the Board of Dods (Group) PLC

 

 

 

 

Rupert Levy

Group Finance Director

 

 

 

DODS (GROUP) PLC

CONSOLIDATED INCOME STATEMENT

 

		For the six	For the six	For the year
		months ended	months ended	ended
		30 June	30 June	31 December
		2010	2009	2009
		Unaudited	Unaudited And restated*	Audited
	Note	£'000	£'000	£'000
Revenue	3	6,303	7,219	17,335
Cost of sales		(4,606)	(5,013)	(11,028)
Gross profit		1,697	2,206	6,307
Administrative expenses:
Non-trading items	4	(156)	(131)	(178)
Amortisation of intangible assets acquired through		(695)	(781)	(1,349)
business combinations
Net administrative expenses		(2,113)	(2,316)	(4,213)
Total administrative expenses		(2,964)	(3,228)	(5,740)
Operating (loss)/profit		(1,267)	(1,022)	567
Finance income		13	113	14
Financing costs		(320)	(335)	(569)
		(1,574)	(1,244)	12
(Loss)/profit before tax
Income tax credit/(charge)	5	174	284	(59)
Loss after tax from continuing operations		(1,400)	(960)	(47)
Results from discontinued operations (net of tax)	9	(1,195)	(533)	(7,738)
Loss for the period		(2,595)	(1,493)	(7,785)
Loss per share
Basic	6	(1.71 p)	(0.98 p)	(5.12 p)
Diluted	6	(1.71 p)	(0.98 p)	(5.12 p)
* - restated to exclude discontinued operations (see note 9)

 

CONSOLIDATED STATEMENT OF RECOGNISED COMPREHENSIVE INCOME

	For the six	For the six	For the year
	months ended	months ended	ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Loss for the period	(2,595)	(1,493)	(7,785)
Exchange differences on translation of foreign operations	(29)	12	(3)
Other comprehensive income for the period	(29)	12	(3)
Total comprehensive loss in the period attributable to equity holders of the parent company	(2,624)	(1,481)	(7,788)

 

DODS (GROUP) PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

		As at	As at	As at
		30 June	30 June	31 December
		2010	2009	2009
		Unaudited	Unaudited	Unaudited
	Note	£'000	£'000	£'000
Goodwill	7	18,906	22,847	18,906
Intangible assets	8	15,166	29,702	15,720
Property, plant and equipment		121	307	132
Non-current assets		34,193	52,856	34,758
Inventories		138	2,424	123
Trade and other receivables		3,600	4,553	2,797
Derivative financial instruments		-	-	35
Cash		1,131	54	428
Assets classified as held for sale		-	-	10,733
Current assets		4,869	7,031	14,116
Interest bearing loans and borrowings		-	(2,130)	(2,130)
Income tax payable		(154)	(81)	(311)
Trade and other payables		(5,594)	(6,721)	(4,077)
Liabilities classified as held for sale		-	-	(1,359)
Current liabilities		(5,748)	(8,932)	(7,877)
Net current (liabilities)/assets		(879)	(1,901)	6,239
Total assets less current liabilities		33,314	50,955	40,997
Interest bearing loans and borrowings		-	(6,477)	(4,880)
Deferred tax liability		(2,428)	(4,654)	(2,601)
Non current liabilities		(2,428)	(11,131)	(7,481)
Net assets		30,886	39,824	33,516
Equity attributable to equity holders of parent
Issued capital		15,200	15,200	15,200
Share premium		30,816	30,816	30,816
Other reserves		409	409	409
Retained loss		(15,510)	(6,589)	(12,927)
Translation reserve		(29)	(12)	18
Total equity		30,886	39,824	33,516

 

 

DODS (GROUP) PLC		For the six	For the six	For the year
CONSOLIDATED STATEMENT OF CASH FLOWS		months ended	months ended	ended
		30 June	30 June	31 December
		2010	2009	2009
		Unaudited	Unaudited and restated*	Audited and restated*
	Note	£'000	£'000	£'000
Cash flows from operating activities
Loss for the period		(2,595)	(1,493)	(7,785)
Depreciation of property, plant and equipment		54	58	109
Amortisation of intangible assets acquired through business combinations		695	781	1,349
Amortisation of other intangible assets		173	169	355
Results from discontinued operations		1,195	533	7,738
Share based payments charges		-	-	(12)
Net finance costs		307	221	555
Income tax (credit)/charge		(174)	(188)	59
Cash flow relating to restructuring provisions		-	-	(178)
Operating cash flows before movements in working capital		(345)	81	2,190
Change in inventories		(22)	54	100
Change in receivables		(1,084)	(303)	730
Change in payables		1,904	1,098	815
Cash generated by operations		453	930	3,835
Income tax paid		(156)	(159)	(408)
Net cash from operating activities		297	771	3,427
Cash flows from investing activities
Interest and similar income received		13	112	14
Proceeds from sale of property, plant and equipment		-	-	5
Acquisition of property, plant and equipment		(99)	(12)	(70)
Acquisition of other intangible assets		(258)	(97)	(262)
Net cash (used in)/provided by investing activities		(344)	3	(313)
Cash flows from financing activities
Interest and similar expenses paid		(304)	(663)	(684)
Repayment of borrowings		(7,010)	(533)	(2,130)
Net cash used in financing activities		(7,314)	(1,196)	(2,814)
Net (decrease)/increase in cash and cash equivalents in continuing operations		(7,361)	(422)	300
Opening cash and cash equivalents		(369)	(676)	(676)
Effect of exchange rate fluctuations on cash held		(17)	86	7
Closing cash and cash equivalents in continuing operations		(7,747)	(1,012)	(369)
Cash flows from discontinued operations
Net cash (decrease)/increase from operating activities		(718)	822	1,031
Net cash used in investing activities		8,799	(528)	(1,006)
Net increase in cash		8,081	294	25
Opening cash and cash equivalents		797	772	772
Closing cash and cash equivalents in discontinued operations		8,878	1,066	797
Closing cash	10	1,131	54	428
*-restated to exclude discontinued operations (see note 9). The restatement of the cash flow statement for the year ended 31 December 2009 for discontinued cash flows has not been audited.

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

						Unaudited
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Total
	Share	Share	Merger	Retained	Translation	Shareholders'
	capital	premium	reserve	earnings	reserve	funds
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 January 2009	15,200	30,816	409	(5,117)	21	41,329
Total comprehensive loss
Loss for the year	-	-	-	(7,785)	-	(7,785)
Other comprehensive income
Currency translation difference	-	-	-	-	(3)	(3)
Share based payment charge	-	-	-	(25)	-	(25)
At 1 January 2010	15,200	30,816	409	(12,927)	18	41,329
Total comprehensive loss
Loss for the year	-	-	-	(2,595)	-	(2,595)
Other comprehensive income
Currency translation difference	-	-	-	18	(47)	(29)
Share based payment charge	-	-	-	(6)	-	(6)
At 30 June 2010	15,200	30,816	409	(15,510)	(29)	30,886
The company obtained court approval on 14 July 2010 to cancel the share premium account. This will be reflected in the financial statements for the year ending 31 December 2010.

 

DODS (GROUP) PLC Notes to the Accounts 30 June 2010

 

1 Statement of Accounting Policies

The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRSs as adopted by the EU, applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2009.

Basis of Preparation

The Board continuously assesses and monitors the key risks of the business. Despite the current uncertainty in the global economy, the key risks that could affect the Group's medium term performance, and the factors which mitigate these risks, have not significantly changed from those set out in the Group's Annual Report for 2009. The Operating Review includes consideration of uncertainties affecting the Group in the remaining six months of the year. The Board has reviewed forecasts, including forecasts adjusted for significantly worse economic conditions, and remains satisfied with the Group's funding and liquidity position. On the basis of its forecasts, both base case and stressed, and available facilities, the Board has concluded that the going concern basis of preparation continues to be appropriate.

Discontinued operations

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or that meets the criteria to be classified as held for sale. Discontinued operations are presented in the income statement (including the comparative period) analysing the post-tax profit or loss of the discontinued operation.

 

2 Statement of compliance

These Condensed Consolidated Financial Statements are prepared in accordance with IAS 34: Interim Financial Reporting as endorsed and adopted for use in the European Union and Disclosure and Transparency Rules (DTR) of the Financial Services Authority. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the Consolidated Financial Statements of the Group as at and for the year ended 31 December 2009. The comparative figures for the financial year ended 31 December 2009 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

3 Segment information

Segment information is presented in respect of the Group's operating segments. The operating segments have been identified on the basis of internal reports about the components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance.

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Unaudited
Revenue	£'000	£'000	£'000
Political
Political	4,364	4,465	12,066
Learning	1,939	2,754	5,269
	6,303	7,219	17,335
Education (discontinued)	1,550	4,062	7,951
Total revenue	7,853	11,281	25,286
Revenue
United Kingdom	6,445	9,958	21,196
Continental Europe and rest of the world	1,408	1,323	4,090
	7,853	11,281	25,286

 

3 Segment information (continued)
	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Unaudited
EBITDA from operations*	£'000	£'000	£'000
Political
Political	128	41	3,329
Learning	178	547	116
	306	608	3,445
Head Office	(491)	(489)	(900)
EBITDA from continuing operations	(185)	119	2,545
Education (discontinued)	(88)	241	1,223
Total EBITDA	(273)	360	3,768

 

*EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, and non-trading items.

 

A reconciliation between EBITDA and operating profit is shown in Schedule A.

 

4 Non-trading items

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Redundancy and people related costs	156	131	178
	156	131	178

 

5 Taxation

The taxation charge for the six months ended 30 June 2010 is based on the expected annual tax rate.

 

6 Normalised (loss) / profit attributable to shareholders post tax

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Loss attributable to shareholders	(2,595)	(1,493)	(7,785)
Add: results of discontinued operations	1,195	533	7,738
Add: non-trading items net of tax	112	94	128
Add: amortisation of intangible assets acquired through business combinations	695	781	1,349
Less: share based payment credit	-	-	(12)
Adjusted (loss)/profit attributable to shareholders	(593)	(85)	1,418

 

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Shares	Shares	Shares
Weighted average number of shares
In issue during the year - basic	151,998,453	151,998,453	151,998,453
Dilutive potential ordinary shares	-	-	-
In issue during the year - diluted	151,998,453	151,998,453	151,998,453
Loss per share - basic (pence)	(1.71)	(0.98)	(5.12)
Loss per share - diluted (pence)	(1.71)	(0.98)	(5.12)
Normalised (loss)/earnings per share before non-trading items and amortisation
of intangible assets acquired through business combinations (pence)	(0.39)	(0.06)	0.93

 

7 Goodwill

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Cost & Net book value
Opening balance	18,906	22,847	22,847
Impairment	-	-	(3,941)
Closing balance	18,906	22,847	18,906

 

8 Intangible fixed assets

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
Intangible assets acquired through business combinations	£'000	£'000	£'000
Cost
Opening balance	22,612	37,129	37,129
Impairment	-	-	(6,732)
Transferred to held for sale	-	-	(7,785)
Closing balance	22,612	37,129	22,612
Amortisation
Opening balance	7,408	8,293	8,293
Charge for the period	695	1,281	2,352
Impairment	-	-	(1,502)
Transferred to held for sale	-	-	(1,735)
Closing balance	8,103	9,574	7,408
Net book value
Opening balance	15,204	28,836	28,836
Closing balance	14,509	27,555	15,204

 

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Other intangible assets
Net book value
Opening balance	516	2,188	2,188
Closing balance	657	2,147	516
Net intangible assets
Opening balance	15,720	31,024	31,024
Closing balance	15,166	29,702	15,720

 

Other intangible assets comprise IT software and plate costs for revision guide materials.

 

9 Discontinued operations

 

Discontinued operations relates to the results of the Education Division, which was sold on 19 March 2010. The Education Division included Letts Educational Ltd, Leckie & Leckie Ltd and the division Lonsdale which was held within Dods (Group) PLC. Results attributable to this business were as follows:

 

	Six months ended	Six months ended	Year ended
	30 June	30 June	31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Revenue	1,549	4,062	7,951
Cost of sales	(1,109)	(2,354)	(4,452)
Gross profit	440	1,708	3,499
Non-trading items	-	(227)	(398)
Amortisation of intangible assets acquired through business combinations	-	(500)	(1,003)
Impairment of goodwill and intangible assets	-	-	(9,171)
Other administrative expenses	(560)	(1,514)	(2,382)
Operating loss	(120)	(533)	(9,455)
Net finance costs	-	-	2
Loss before tax	(120)	(533)	(9,453)
Related income tax	-	-	84
Deferred tax credit arising from intangible assets impaired	-	-	1,631
Loss on sale of discontinued operations (net of tax)	(1,075)	-	-
Loss for the period	(1,195)	(533)	(7,738)

 

 

10 Analysis of net debt

 

	At 1 January		Non-cash	Exchange	At 30 June
	2010	Cash flow	movements	movement	2010
	£'000	£'000	£'000	£'000	£'000
Cash at bank and in hand	428	720	-	(17)	1,131
Debt due within one year	(2,130)	7,010	(4,880)	-	-
Debt due after one year	(4,880)	-	4,880	-	-
	(6,582)	7,730	-	(17)	1,131

 

Schedule A

Reconciliation between operating profit and non-statutory measure

The following tables reconcile operating profit as stated above to EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group.

EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of assets acquired through business combinations, and non-trading items.

Six months ended 30 June 2010	Operating (loss)/profit	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA
	£'000	£'000	£'000	£'000	£'000
Political
Political	(817)	216	581	148	128
Learning	50	6	114	8	178
	(767)	222	695	156	306
Head Office	(500)	9	-	-	(491)
Result from continuing operations	(1,267)	231	695	156	(185)
Education (discontinued)	(120)	32	-	-	(88)
Group total	(1,387)	263	695	156	(273)

 

Year ended 31 December 2009	Operating profit/(loss)	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA
	£'000	£'000	£'000	£'000	£'000
Political
Political	1,663	430	1,219	17	3,329
Learning	(107)	17	130	76	116
	1,556	447	1,349	93	3,445
Head Office	(989)	16	-	73	(900)
Result from continuing operations	567	463	1,349	166	2,545
Education (discontinued)	(9,455)	119	10,174	385	1,223
Group total	(8,888)	582	11,523	551	3,768

 

Six months ended 30 June 2009	Operating (loss)/profit	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA
	£'000	£'000	£'000	£'000	£'000
Political
Political	(804)	210	627	28	61
Learning	330	10	154	53	547
	(474)	220	781	81	608
Head Office	(548)	8	-	51	(489)
Result from continuing operations	1,022)	228	781	132	119
Education (discontinued)	(533)	48	500	226	241
Group total	(1,555)	276	1,281	358	360

 

*including amortisation of software shown within intangibles.

 

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