Last checked at 20 May 2009 07:00
20 May 2009
First Derivatives plc
(AIM:FDP.L, IEX:GYQ.I)
Results for the twelve months ended 28 February 2009
The principal activities of First Derivatives plc ("First Derivatives", "FDP" or the "Company") are the provision of a range of software and support services to the investment banking market, the derivatives technology industry, the provision of its own range of Delta business applications and the provision of marketing services to the technology market.
Financial Highlights
Turnover £17.548m (2008: £12.669m) +39%
EBITDA £6.447m (2008: £5.561m) +16%
Pre-tax profit before loss on currency translation £5.383m (2008: £4.745m on a similar basis) + 13%
Diluted Earnings per share 22.2p (2008: 22.2p)
Final dividend 6.65p per share (2008: 5.8p) +15%
Business Highlights
Trading performance remains robust
OEM agreement concluded with Kx Systems Inc.
Strengthening of management team
Acquisition of MRP during the year
Acquisition of Hologram since year end
Support through grant from Invest Northern Ireland of over £3 million
Further sales and development of the Delta product suite
David Anderson, chairman of First Derivatives commented
"It is too early to predict the outcome for the current financial year. However, the pipeline of business from new and existing customers remains strong for capital markets consulting and the range of Delta software products and the Directors expect to be able to report further progress in the first half of the year."
For further information please contact:
First Derivatives plc Tel: +44(0)28 3025 2242Brian ConlonManaging Director
www.firstderivatives.com
Charles Stanley Securities Tel: +44(0)20 7149 6000Nominated AdvisorRussell CookCarl Holmes
Goodbody Corporate Finance Tel: +353 1 667 0420IEX AdvisorDiane HodgsonLinda Hickey
Stakeholder Communications Carl Whyte Tel: +44(0)28 9033 9949Lisa Nugent Tel: +44(0)20 7903 5148
Chairman's Statement
Despite a turbulent market 2008/2009 was the thirteenth year of continuing growth for the Group. The pre-tax profit for the year before loss on currency translation was £5.383 million (2008: £4.745 million on a similar basis) an increase of 13%*.
As noted above normalised pre-tax profit for the year was £5.383 million compared with £4.745 million in the previous year. Turnover for the year was £17.548 million up from £12.669 million. Normalised earnings per share were 27.7p (2008: 23.5p) based on normalised post tax profit of £3,735,000, after allowing for currency translation and its taxation impact. The Board is recommending a final dividend of 6.65p per share which, together with the interim dividend of 2.35p paid in October 2008, totals 9.0p and is covered approximately three times by earnings on a normalised basis. This will be paid on 06 July to those shareholders on the register on 05 June 2008. The shares will be marked ex-dividend on 03 June 2008.
In my interim statement I referred to the first substantial order for one of the Delta products. The Delta Suite is a high performance modular suite of Trading, Risk Management, Market data, CEP and Analysis applications. Since then significant resource has gone into further development and the sales pipeline continues to expand. In addition to further sales secured since the year end the group has obtained an order from a US hedge fund for in excess of £250,000 and we would expect to see further substantial orders during the current financial year. Sales continue to be on an annual recurring license basis. New sales of Partner products during the second half were boosted by a substantial order towards the year end. The pipeline remains healthy with a higher level of enquiries originating in North America than in Europe. At the end of January we announced an OEM License Agreement with our partners Kx Systems Inc. This agreement provides us with the flexibility needed in the development of our range of Delta software products, opening further market opportunities for the suite.
The demand for our capital market consultancy services has continued to expand in the second half of the year with new business wins in North America and Europe. Margins have been reduced on some of our existing client projects. However, a temporary customer paralysis in decision making on commitment to new projects which we experienced in the second half appears to be easing and we have embarked on a number of new projects since the year end including a significant contract for a new client in Canada.
Since its acquisition in September, Market Resource Partners ("MRP") has traded ahead of management expectations assisted by securing contracts for managing and executing technology sales programs for two of the world's largest US based technology companies announced in October. The outlook for MRP continues to be positive with further work being secured from large US based technology companies.
At the beginning of April this year the group announced the acquisition of Lepton Solutions Pty Ltd ("Hologram") an Australian based technology company. This acquisition expands the group's presence in the increasingly important Asia Pacific region increasing its ability to service its global client base. In addition the principals are leaders in the field of Risk Management and Stock Exchange Trading software which further enhances development expertise. The Hologram product base complements that of FDP and will slot seamlessly into the Delta product suite.
The group continues to strengthen its management team. Paul Kinney was appointed to the Board in May 2008, Graham Ferguson appointed in September and Kevin Cunningham in January this year. In addition there have been a number of key appointments below Board level both in Marketing and Human Resources. These appointments will enable the group to continue growing but have impacted on the overheads for the year, however the benefits should show through in future years.
At the end of January the Company announced it had secured support from Invest Northern Ireland (Northern Ireland's Economic Development Agency) towards the recruitment and training of additional staff. This commitment is for over £3 million and is to support the creation of new posts within the Company along with being focused toward the development of staff skills. The support is based on increase in the headcount level from the beginning of June 2008 but the financial benefits will not start to come through until the current financial year.
The group employee training program has continued to benefit and we continue to experience a low staff turnover. Employee numbers at the year end were 243 up from 118 at the end of the previous year.
FDP has made one further acquisition of residential property during the year, which is used to accommodate staff on assignments in the major financial sectors. At the year end the Company owned 33 such properties with a book value of £16.9 million. Despite the global downturn in the property market the valuation of our property portfolio remains largely unchanged. These properties (mostly in prime residential areas in London and New York) are for the sole use of staff undertaking onsite assignments. The use of these properties, not only present significant operational savings but boost staff morale. The properties were valued at 28 February 2009 at £20.8 million a surplus of £3.9 million. Again this revaluation has not been incorporated into the financial statements.
On behalf of shareholders I would like to thank Brian Conlon and his staff members for their input in what has been another successful year.
It is too early to predict the outcome for the current financial year. However, the pipeline of business from new and existing customers remains strong for Delta software sales, our Capital Markets Consulting division and Technology Sales division and the Directors expect to be able to report further progress in the first half of the year.
David Anderson
Chairman
* The economic climate has seen a significant currency fluctuation in Sterling. Pre-tax profit is stated after a loss on currency translation of £922,000 which has arisen from the necessity under accounting treatment to translate the group's Dollar loans at the exchange rate ruling on 28 February 2009 in comparison to the exchange rate on 1 March 2008. This treatment takes no account of the group's natural hedge to its Dollar loan when considering the Dollar assets carried at historical cost on the balance sheet
Chief Executive's Statement
The last 18 months has witnessed an unprecedented period of uncertainty and upheaval in the capital markets. Many of the organisations in our target market have failed or merged and have suffered unprecedented trading losses. Against this background I am pleased to report that FDP has had another successful year and we have continued to grow our operations.
Review of activities
First Derivatives provides consulting services to the capital markets and sells software and related services. We have a broad customer base and provided services last year to 48 different investment banks and hedge funds. Whilst London and New York continue to remain our primary centre of activities, we have also provided services during the last year to clients in financial centres such as Toronto, Chicago, Singapore, Hong Kong, Stockholm and Vienna. As a result of recent acquisitions and sales initiatives we have new branch offices in Philadelphia, New York, Shanghai, Adelaide and Sydney.
Software division
The relative importance of our Software division continues to grow. We have significantly increased the size of our R&D team by recruiting technology experts, supplemented by experienced consultants with many years domain expertise. Our work in the field gives us a unique insight into the problems faced by our customers and the accompanying technological challenges. We are capitalising on this to build a suite of products under the Delta brand name. The Delta suite now contains a number of mature products with an installed user base of 15+ customers worldwide and we will continue to roll out new modules, many with applications beyond the banking sector in areas such as telecommunications, utilities and government. These products are sold on an annual licensing model and additional revenues accrue from implementation, training and support services.
In tandem we are building a sales and marketing infrastructure to support the global rollout of these products. With the recent acquisitions of MRP and Hologram we now have a local presence in the world's major financial centres. In addition our sales bandwidth has increased significantly by the addition to our team of a number of experienced sales and marketing professionals with a proven track record in building technology companies. We continue to provide sales and marketing support to Kx Systems on a worldwide basis. Their products are used by some of the world's largest banks and Kx Systems lists organisations such as JP Morgan, Merrill Lynch, Lehman Brothers, Goldman Sachs, Deutsche Bank and Dresdner as users. We derive revenue from sales commission, support contracts, training and consulting.
Consulting division
First Derivatives provides highly skilled resources to the capital markets in the areas of consulting, support and development services. We have ongoing contracts with many of the leading global banks, supporting their activities across a range of asset classes including credit, interest rate, foreign exchange and equity cash and derivatives markets. We have worked in partnership with our customers to help them meet budget challenges during the new strained climate. Although we have experienced some margin erosion we have lost no significant contracts - indeed the compelling value of our offering has helped us win new business. Following the recent acquisitions our nearshore proposition is now even more attractive as we can now offer this on a global follow-the-sun model in three timezones .
Marketing division
Our newly functioning Technology Sales division, operating under the MRP brand, has made significant progress. The division has secured contract wins and ongoing business with some of the world's largest hardware and software companies. The division has also been instrumental in generating business for other divisions.
Management and Personnel
During the past year we have made a number of key strategic hires to help drive the future strategic growth of the business. These include people with corporate finance, strategic consulting and business development backgrounds. The strengthening of our management team will enable us to sustain the Company's growth and to exploit ongoing opportunities.
We now employ almost 260 people. Our success in retaining staff means that the experience profile of our consultants continues to improve. Our Capital Markets Training Programme, implemented in late 2006 has been a resounding success and has helped to differentiate us from our competition. The majority of our staff who have been with us for two years or more are participating in our employee share option scheme.
Once again I would like to pay tribute to all First Derivatives employees who almost without exception are hard working, talented, flexible and dedicated. Our customer retention rates are evidence of this.
Financial Review
The group has reported revenues and profits significantly higher than last year. Normalised pre-tax Profit for the year was £5,383,000 (2008: £4,745,000) on turnover of £17,548,000 (2008: £12,669,000). Despite the challenges from the wider environment, our gross operating margins remained steady at 51%, a fall of only 2%. Our balance sheet is strong with a cash balances up to £1,299,000 and equity shareholders' funds of £11,271,000 (2008: £8,302,000), an increase of 36%. This, and our confidence in our ability to generate cash going forward, enables the Board to recommend a final dividend of 6.65p per share (2008: 5.8p) which means that we will have paid a total dividend of 9.0p (2008: 8.1p) per share for the full year.
In August 2008 the group negotiated new loan facilities with its principal bank with a purpose of fixing its debt structure for a definitive period in these uncertain times while increasing headroom to allow capitalisation on opportunities that may arise. Our current debt levels primarily result from our decision to hold property for staff use, a strategy which we continuously review. As at 28 February 2009 the group had £5.5 million of unutilised available facilities.
Outlook
We see the coming financial year as a period year of continuing our investment for growth. As well as organic growth we will continue to pursue of acquisition opportunities where we see a strategic fit and have access to sources of finance to execute these. Although the outlook for the banking sector is still uncertain we anticipate trading in line with market expectations. Looking further ahead we are confident that our global reach, expanding product base and long-term relationships with our consulting customers will leave us ideally placed to reap the benefit of any upswing.
Brian Conlon
Chief Executive
Consolidated income statement
Year ended 28 February 2009
| 2009 | 2008 | |||
| Note | £'000 | £'000 | ||
| Revenue | 3 | 17,548 | 12,669 | |
| Cost of sales | (8,607) | (5,997) | ||
| Gross profit | 8,941 | 6,672 | ||
| Other operating income | 159 | 151 | ||
| Administrative expenses | (3,165) | (1,595) | ||
| Operating profit | 5,935 | 5,228 | ||
| Finance income | 10 | 210 | ||
| Finance expenses | (562) | (693) | ||
| Loss on foreign currency translation | (922) | (29) | ||
| Net financing expenses | (1,474) | (512) | ||
| Profit before taxation | 4,461 | 4,716 | ||
| Income tax expense | (1,390) | (1,662) | ||
| Profit for the year | 3,071 | 3,054 | ||
| Earnings per share | Pence | Pence | ||
| Basic | 5a | 22.8 | 23.3 | |
| Diluted | 5b | 22.2 | 22.2 |
Consolidated balance sheet
Year ended 28 February 2009
| 2009 | 2008 | |||
| Note | £'000 | £'000 | ||
| Non current assets | ||||
| Property, plant and equipment | 6 | 17,171 | 16,786 | |
| Intangible assets | 7 | 10,513 | 125 | |
| Other financial assets | 1,872 | 520 | ||
| Deferred tax asset | 177 | 541 | ||
| Total non current assets | 29,733 | 17,972 | ||
| Current assets | ||||
| Trade and other receivables | 6,334 | 4,126 | ||
| Cash and cash equivalents | 1,299 | 396 | ||
| Total current assets | 7,633 | 4,522 | ||
| Total assets | 37,366 | 22,494 | ||
| Current liabilities | ||||
| Interest bearing borrowings | (989) | (1,834) | ||
| Trade and other payables | (4,134) | (2,453) | ||
| Current tax payable | (1,472) | (1,228) | ||
| Employee benefits | (833) | (625) | ||
| Contingent deferred consideration | (1,175) | - | ||
| Total current liabilities | (8,603) | (6,140) | ||
| Non-current liabilities | ||||
| Interest bearing borrowings | (12,986) | (7,965) | ||
| Deferred tax liability | (87) | (87) | ||
| Contingent deferred consideration | (4,419) | - | ||
| Total non-current liabilities | (17,492) | (8,052) | ||
| Total liabilities | (26,095) | (14,192) | ||
| Net assets | 11,271 | 8,302 | ||
| Equity | ||||
| Share capital | 69 | 66 | ||
| Share premium | 2,274 | 1,278 | ||
| Share option reserve | 430 | 719 | ||
| Fair value reserve | 223 | 223 | ||
| Currency translation adjustment reserve | 244 | - | ||
| Retained earnings | 8,031 | 6,016 | ||
| Total equity | 11,271 | 8,302 |
Consolidated statement of changes in equity
Year ended 28 February 2009
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| Share capital £000 | Share premium £000 | Share option reserve £000 | Fair value reserve £000 | Currency translation adjustment £000 | Retained earnings £000 | Total equity
£000 |
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| Balance at 1 March 2007 | 65 | 1,020 | 535 | 190 | - | 3,616 | 5,426 |
| Deferred tax on share options outstanding | - | - | (75) | - | - | - | (75) |
| Net change in fair value of available for sale assets | - | - | - | 232 | - | - | 232 |
| Net change in fair value of available for sale assets transferred to profit or loss | - | - | - | (199) | - | - | (199) |
| Total income and expense recognised directly in equity | - | - | (75) | 33 | - | - | (42) |
| Profit for the year | - | - | - | - | - | 3,054 | 3,054 |
| Total recognised income and expense | - | - | (75) | 33 | - | 3,054 | 3,012 |
| Shares issued | 1 | 258 | - | - | - | - | 259 |
| Share based payment charge | - | - | 259 | - | - | 115 | 374 |
| Dividends to equity holders | - | - | - | - | - | (769) | (769) |
| Balance at 29 February 2008 | 66 | 1,278 | 719 | 223 | - | 6,016 | 8,302 |
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| Balance at 1 March 2008 | 66 | 1,278 | 719 | 223 | - | 6,016 | 8,302 |
| Deferred tax on share options outstanding | - | - | (308) | - | - | - | (308) |
| Net gains on net investment in foreign subsidiary | - | - | - | - | 819 | - | 819 |
| Net loss on hedge of movement in foreign subsidiary | - | - | - | - | (575) | - | (575) |
| Total income and expense recognised directly in equity | - | - | (308) | - | 244 | - | (64) |
| Profit for the year | - | - | - | - | - | 3,071 | 3,071 |
| Total recognised income and expense | - | - | (308) | - | 244 | 3,071 | 3,007 |
| Shares issued | 3 | 996 | (122) | - | - | - | 877 |
| Share based payment charge | - | - | 183 | - | - | - | 183 |
| Transfer on exercise or lapse | - | - | (42) | - | - | 42 | - |
| Dividends to equity holders | - | - | - | - | - | (1,098) | (1,098) |
| Balance at 28 February 2009 | 69 | 2,274 | 430 | 223 | 244 | 8,031 | 11,271 |
Consolidated cash flow statement
Year ended 28 February 2009
| 2009 | 2008 | ||
| £'000 | £'000 | ||
| Cashflows from operating activities | |||
| Profit before taxation | 4,461 | 4,716 | |
| Finance income | (10) | (210) | |
| Finance expense | 1,484 | 722 | |
| Operating profit | 5,935 | 5,228 | |
| Depreciation | 262 | 153 | |
| Amortisation of intangible assets | 250 | 180 | |
| Equity settled share-based payment transactions | 183 | 259 | |
| 6,630 | 5,820 | ||
| Change in trade and other receivables | (1,625) | (1,588) | |
| Change in trade and other payables | 1,167 | 1,072 | |
| 6,172 | 5,304 | ||
| Corporation tax paid | (1,100) | (1,279) | |
| Net cash from operating activities | 5,072 | 4,025 | |
| Cash flows from investing activities | |||
| Interest received | 10 | 11 | |
| Acquisition of subsidiary | (2,773) | - | |
| Acquisition of property, plant and equipment | (468) | (8,797) | |
| Acquisition of other financial assets | (1,352) | - | |
| Proceeds from sale of available for sale assets | - | 220 | |
| Acquisition of intangible assets | (365) | (125) | |
| Net cash used in investing activities | (4,948) | (8,691) | |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | 20 | 259 | |
| Receipt of new long term loan | 10,193 | 6,001 | |
| Repayment of borrowings | (6,221) | (225) | |
| Payment of finance lease liabilities | (90) | - | |
| Interest paid | (528) | (560) | |
| Dividends paid | (1,098) | (769) | |
| Net cash from financing activities | 2,276 | 4,706 | |
| Effects of exchange rate charges on cash and cash equivalents | (1,497) | - | |
| Net increase in cash and cash equivalents | 903 | 40 | |
| Cash and cash equivalents at 1 March 2008 | 396 | 356 | |
| Cash and cash equivalents at 28 February 2009 | 1,299 | 396 |
Notes
1. Basis of preparation
The consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as the "group").
Both the consolidated financial statements and the Company financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("EU IFRSs").
2. Acquisition of subsidiary
On 1 September 2008 the group acquired 100% of the ordinary shares in Market Resource Partners LLC for an estimated £8,133,000 including contingent consideration, satisfied as detailed below. The company specialises in lead generation in the technology sector. In the 6 months to 28 February 2009 the subsidiary contributed revenue of £3,015,000 and profit after tax of £289,000 to the consolidated accounts for the year. If the subsidiary had been acquired on 1 March 2009 it would have contributed revenue of £5,666,000 to the consolidated accounts.
The acquisition had the following effect on the group's assets and liabilities.
| Pre-acquisition carrying amounts | Fair value adjustments | Recognised values on acquisition | |
| £000 | £000 | £000 | |
| Acquiree's net assets at the acquisition date: | - | ||
| Property, plant and equipment | 148 | - | 148 |
| Intangible assets | 380 | 2,576 | 2,956 |
| Trade and other receivables | 583 | - | 583 |
| Cash and cash equivalents | (70) | - | (70) |
| Interest-bearing loans and borrowings | (204) | - | (204) |
| Trade and other payables | (722) | - | (722) |
| Net identifiable assets and liabilities | 115 | 2,576 | 2,691 |
| Goodwill on acquisition: Including cost of acquisition | 5,442 | ||
| 8,133 | |||
| Consideration paid, satisfied as follows: | |||
| Cash | 2,703 | ||
| Shares issued | 857 | ||
| Contingent consideration | 4,573 | ||
| 8,133 | |||
| Cash consideration paid | 2,703 | ||
| Overdraft (acquired) | 70 | ||
| Net cash outflow | 2,773 |
3. Segment reporting
Business segments
The group has three major categories of sales revenue which are largely delivered from the same cost base. In addition, the group is subject to similar business risks and benefits in all geographical locations in which the Company conducts its business. As such, the group is deemed to have one business and geographical segment. The group has disclosed below certain information on its three revenue streams and its revenue by geographical location.
The group's three revenue streams are separated as follows:
Consulting division which provides services to capital markets
Technology sales division which provides sales lead generation services to the technology sector
Software division which develops and has an interest in intellectual property and provides related services.
Revenue by division
| Consulting division | Technology Sales Division | Software division | Total | |||||
| 2009 £'000 | 2008 £'000 | 2009 £'000 | 2008 £'000 | 2009 £'000 | 2008 £'000 | 2009 £'000 | 2008 £'000 | |
| Total Segment Revenue | 8,950 | 6,465 | 3,015 | - | 5,583 | 6,204 | 17,548 | 12,669 |
Revenue by geographical location
| Europe | America | Australasia | Total | |||||
| 2009 £000 | 2008 £000 | 2009 £000 | 2008 £000 | 2009 £000 | 2008 £000 | 2009 £000 | 2008 £000 | |
| Revenue from external customers | 9,441 | 7,481 | 7,450 | 4,479 | 657 | 709 | 17,548 | 12,669 |
4. Dividends
| 2009 | 2008 | |
| £'000 | £'000 | |
| Final dividend relating to the prior year | 776 | 468 |
| Interim dividend paid | 322 | 301 |
| 1,098 | 769 |
The dividends recorded in each financial year represent the final dividend of the preceding financial year and the interim dividend of the current financial year.
The final dividend relating to the prior year amounted to 5.8 (previous year 3.6) pence per share and the interim dividend paid during the year amounted to 2.35 (previous year: 2.3) pence per share.
5. (a) Earnings per ordinary share
Basic
The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders of £3,071,000 (2008: £3,054,000). The weighted average number of ordinary shares for the year ended 28 February 2009 and ranking for dividend was 13,487,052 (2008: 13,088,749).
| 2009 | 2008 | |
| Pence per share | Penceper share | |
| Basic earnings per share | 22.8 | 23.3 |
Weighted average number of ordinary shares
| 2009 | 2008 | |
| Number '000 | Number '000 | |
| Issued ordinary shares at beginning of period | 13,279 | 12,944 |
| Effect of share options exercised | 6 | 145 |
| Effect of shares issued for purchase consideration | 202 | - |
| Weighted average number of ordinary shares at end of period | 13,487 | 13,089 |
Diluted
The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of £3,071,000 (2008: £3,054,000). The weighted average number of ordinary shares for the year ended 28 February 2009 and ranking for dividend was 13,849,132 (2008: 13,761,879).
| 2009 | 2008 | |
| Penceper share | Pence per share | |
| Diluted earnings per share | 22.2 | 22.2 |
Weighted average number of ordinary shares (diluted)
| 2009 | 2008 | |
| Number | Number | |
| Weighted average number of ordinary shares (basic) | 13,487 | 13,089 |
| Effect of share options in issue | 356 | 673 |
| Effect of shares to be issued for purchase consideration | 6 | - |
| Weighted average number of ordinary shares (diluted) at end of period | 13,849 | 13,762 |
The average market value of the group's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period the options were outstanding.
The number of anti diluted share options in use at 28 February 2009 is 196,294 (2008: 29,942).
5. (b) Adjusted earnings before tax per ordinary share
Adjusted earnings per share are based on profit before taxation of £4,461,000 (2008: £4,716,000). The number of shares used in this calculation is consistent with note 5(a) above.
| 2009 | 2008 | |
| Pence per share | Pence per share | |
| Basic adjusted earnings per ordinary share | 33.1 | 36.0 |
| Diluted adjusted earnings before tax per ordinary share | 32.2 | 34.3 |
Reconciliation from earnings per ordinary share to adjusted earnings per ordinary share.
| 2009 | 2008 | |
| Penceper share | Pence per share | |
| Basic earnings per share | 22.8 | 23.3 |
| Impact of taxation charge | 10.3 | 12.7 |
| Adjusted basic earnings before tax per share | 33.1 | 36.0 |
| Diluted earnings per share | 22.2 | 22.2 |
| Impact of taxation charge | 10.0 | 12.1 |
| Adjusted diluted earnings before tax per share | 32.2 | 34.3 |
Adjusted earnings per share has been presented to facilitate pre-tax comparison returns on comparable investments.
5. (c) Normalised earnings per share
Normalised earnings per share are based on a normalised profit after taxation of £3,735,000 (2008: £3,075,000). Normalised profit after tax has been calculated by adjusting for the loss on foreign currency translation after tax effect which is £664,000 (£922,000 after tax of 28%). The number of shares used in this calculation is considerate with note 5 (a) above.
| 2009 | 2008 | |
| Penceper share | Penceper share | |
| Basic normalised earnings per ordinary share | 27.7 | 23.5 |
| Diluted normalised earnings per ordinary share | 26.9 | 22.3 |
6. Property, plant and equipment
Group
| Land and buildings £'000 | Plant and equipment £'000 | Office furniture £'000 | Total £'000 | |
| Cost | ||||
| At 1 March 2008 | 17,042 | 224 | 40 | 17,306 |
| Additions | 360 | 93 | 15 | 468 |
| Acquisition through business combinations | 4 | 144 | - | 148 |
| Exchange adjustments | 1 | 33 | - | 34 |
| At 28 February 2009 | 17,407 | 494 | 55 | 17,956 |
| Depreciation | ||||
| At 1 March 2008 | 279 | 216 | 25 | 520 |
| Exchange adjustments | - | 3 | - | 3 |
| Charge for the year | 199 | 54 | 9 | 262 |
| At 28 February 2009 | 478 | 273 | 34 | 785 |
| Net book value At 28 February 2009 | 16,929 | 221 | 21 | 17,171 |
| At 1 March 2008 | 16,763 | 8 | 15 | 16,786 |
| Land and buildings £'000 | Plant and equipment £'000 | Office furniture £'000 | Total £'000 | |
| Cost | ||||
| At 1 March 2007 | 8,265 | 219 | 25 | 8,509 |
| Additions | 8,777 | 5 | 15 | 8,797 |
| At 28 February 2008 | 17,042 | 224 | 40 | 17,306 |
| Depreciation | ||||
| At 1 March 2007 | 131 | 212 | 24 | 367 |
| Charge for the year | 148 | 4 | 1 | 153 |
| At 28 February 2008 | 279 | 216 | 25 | 520 |
| Net book value At 28 February 2008 | 16,763 | 8 | 15 | 16,786 |
| At 1 March 2007 | 8,134 | 7 | 1 | 8,142 |
7. Intangible assets
Group
| Customer lists £'000 | Software £'000 | Brand name £'000 | Goodwill £'000 | Developed software £'000 | Total £'000 | |
| Cost | ||||||
| Balance at 1 March 2008 | - | - | - | - | 1,025 | 1,025 |
| Capitalisation of employee costs | - | - | - | - | 365 | 365 |
| Additions | - | 5 | - | - | - | 5 |
| Acquisition through business combinations | 1,724 | 1,089 | 143 | 5,442 | - | 8,398 |
| Exchange adjustments | 387 | 245 | 32 | 1,212 | - | 1,876 |
| Balance at 28 February 2009 | 2,111 | 1,339 | 175 | 6,654 | 1,390 | 11,669 |
| Amortisation and impairment losses | ||||||
| Balance at 1 March 2008 | - | - | - | - | 900 | 900 |
| Exchange adjustment | - | 6 | - | - | - | 6 |
| Amortisation for the year | 122 | 113 | 10 | - | 5 | 250 |
| Balance at 28 February 2009 | 122 | 119 | 10 | - | 905 | 1,156 |
| Carrying amounts At 28 February 2009 | 1,989 | 1,220 | 165 | 6,654 | 485 | 10,513 |
| At 1 March 2008 | - | - | - | - | 125 | 125 |
8. Report and accounts
Copies of the Annual Report will be available on the group's website, www.firstderivatives.com and from the group's headquarters at 3 Canal Quay, Newry, BT35 2BP.