Gb Group Regulatory News (GBG)

7 Jun 2006 07:01

GB Group PLC07 June 2006 Embargoed until 07.00 7 June 2006 GB GROUP PLC ("GB" or the "Group") Preliminary Results for the Year Ended 31 March 2006 GB Group is today pleased to announce preliminary results for the year ended 31March 2006. Highlights • Strong growth with Group revenues up by 14% to £12.8m (2005: £11.2m). • Revenue from DataAuthentication, which markets URU(TM), GB's joint offering with BT, increased threefold to £1.9m (2005: £0.6m). • Number of customers for URU almost doubled to 105 (2005: 59) and transaction volumes increased threefold to 572,000 in the last quarter (2005: 172,000). • Investment in international identity verification services to be advanced in line with demand from existing customers. • DataIntegrity and DataSolutions delivered an improved profit performance compared to last year. • Cash balances at 31 March remained strong at £6.7m (2005: £6.7m). • Proposed full year dividend of 0.75p, an increase of 50% (2005: 0.5p), based on strong performance and Board confidence of future prospects. Commenting on current trading, John Walker-Haworth, Chairman, said: "This has been a significant year for the Group. DataAuthentication hasestablished itself as a leading provider of electronic solutions for age and IDverification in an exciting market with considerable future opportunities.Positive progress has also been made in DataIntegrity and DataSolutions. The quality of our business continues to improve in line with the significantinvestment we are making and the business has real and substantial potential." - Ends - For further information, please contact: GB Group plcRichard Law, Chief Executive 01244 657 333Mona Navin-Mealey, Finance Director Weber Shandwick Square Mile 020 7067 0700Richard HewsHelen Thomas Website www.gb.co.uk An analyst presentation will be held at 10.30am today at the offices of Weber Shandwick Square Mile, Fox Court, 14 Gray's Inn Road, London WC1X 8WS Notes to Editors About URU(TM) URU is an electronic identity verification service which was developed jointlywith BT and is DataAuthentication's principle offering. URU, which is powered byGB's ID3(TM) search engine and decision making technology, provides access to GB'scomprehensive range of identity data and BT's high capacity web delivery. Ithelps organisations to protect themselves from the growing problem of identitytheft and fraud, which is estimated to cost the UK economy over £1.7 billion perannum. URU enables companies subscribing to the service to make an instantdecision whether to accept the identity claimed by any given individual andconfirm their age in seconds. URU works by cross checking personal information provided by an individual atthe point of acquisition against a comprehensive range of datasources to confirmthat an individual is who they claim to be, live where they claim to live andmeet certain minimum legal age requirements. No personal data is disclosed by the reference databases and as a result URU iscompliant with the Data Protection Act. URU also provides a valuable audit trail demonstrating that the necessary checkshave taken place, thereby helping companies comply with legislation, includingthe 2nd European Money Laundering Directive, Proceeds of Crime Act and MinimumLegal Age requirements of certain industry sectors. The addition of data from CallCredit also enables users of URU to incorporatecredit reference data. As a result of legislation, new opportunities and social responsibilityrequirements, the market for electronic ID verification is significant andgrowing. Although an estimated 0.5 billion manual ID checks are conductedannually in the UK, less than 3% of these are currently performedelectronically. URU has demonstrated that electronic checks are more effective, less expensiveand more robust. The market is moving towards electronic checks as fraudulent documents becomeever more sophisticated, more readily available and more difficult to checkmanually. It is estimated that by 2010, the market for electronic ID checkscould be 300 million checks per annum. GB works closely with trade and industry associations, such as the Finance andLeasing Association, the Remote Gambling Association and the FinancialTechnology Research Centre, to advise businesses that more robust processes canprevent financial crime. We have worked closely with the Gaming Industry toaddress social issues such as underage gambling and addiction and our SocialResponsibility Consultancy helps Gaming operators formulate best practice tocomply with regulatory requirements and improve profitability. About GB Group plc GB Group plc provides a range of products and services to enable organisationsto capitalise on one of their greatest assets - customer data. The Company hasexpertise across a range of sectors and is able to transform customer data intovaluable information, enabling clients to make better, more informed decisions. The development of innovative software and services, through to the provision ofthe UK's most comprehensive consumer business databases - The National Register (R) and the National Authentication Register - positions GB Group as a widelyacknowledged industry leader in its specialist markets. We are constantly improving business processes by building on our core values ofInnovation, Quality and Excellence. This is reflected in our customersatisfaction surveys and also through research, carried out by ManchesterBusiness School, which confirms our products are out performing the competition. GB Group plc has three complementary offerings: • DataAuthentication helps businesses validate personal identity information and provides anti-fraud solutions to fight crime. • DataIntegrity helps companies capture and maintain accurate customer contact data, an essential foundation for any profitable customer relationship. • DataSolutions empowers companies to consolidate and analyse customer data from various sources, enabling them to make better, more informed decisions. Established since 1989, GB's core competencies combined with industry sectorknowledge have enabled the company to deliver significant value to organisationssuch as Standard Life, Scottish Power and TD Waterhouse in helping them derivemaximum value from their customer data and sustain real advantage over theircompetition. GB Group is supported by its key relationships with major organisations withwhom it works with on major initiatives (an example being British Telecom),together with a team of highly talented and motivated staff successfullydelivering business solutions. GB Group plc is listed on the London Stock Exchange (www.gb.co.uk). CHAIRMAN'S STATEMENT This has been a significant year for the Group. DataAuthentication hasestablished itself as a leading provider of electronic solutions for age and IDverification in an exciting market with considerable future opportunities.Positive progress has also been made in DataIntegrity and DataSolutions. To reflect the Board's confidence in the present position and the momentum ofthe business, an increased dividend for the full year of 0.75p per ordinaryshare (2005: 0.5p per ordinary share) will be proposed at the Annual GeneralMeeting to be held in July. The market for electronic identity verification continues to grow apace and therate of adoption of electronic forms of identity verification is accelerating.DataAuthentication, whose current principal offering is URU(TM), increased itsrevenue three-fold compared to last year. The investment which funded thisgrowth, and which was increased significantly compared to the previous year, wasgenerated entirely by DataIntegrity and DataSolutions. The number of URU(TM) clients has increased and now totals 105, compared to 59this time last year, and the size and strategic importance of its new clients issteadily increasing. As a result, the volume of transactions was 47% higher inthe second half of the year compared to the first half. The traditional services offered by DataIntegrity and DataSolutions had apositive year delivering revenue and profitability marginally ahead of theprevious year against a background of increasing competition. These markets aremature, and in order to improve our position we are taking a number ofinnovative steps, as mentioned in the Chief Executive's Review. Overall, the Group had a positive performance. Although a small loss wasgenerated, the investment in DataAuthentication was significantly higher thanlast year and like-for-like performance was improved. In addition, cash balancesat the year end were £6.7 million (2005: £6.7 million) after taking account ofthe dividend of £404,000 paid during the year. Richard Law, the Chief Executive, his executive management team and all ouremployees are to be congratulated on their hard work and their achievements thispast year. The quality of our business continues to improve in line with the significantinvestment we are making, and the business has real and substantial potential. J L Walker-HaworthChairman CHIEF EXECUTIVE'S REVIEW I am pleased to report an excellent year of progress which saw Group revenueincrease by 14% and our strategy to lead the market for electronic age and IDverification gather momentum. Revenue for URU(TM), our joint service with BT,increased threefold during the year. In addition, a further £0.5 million ofrevenue, representing payments in advance for the service, was carried forwardinto the current year. Competition continued to be keen for the services ofDataIntegrity and DataSolutions, although efficient operations ensured that theresults produced were ahead of the previous year. DataAuthentication Strong revenue growth in DataAuthentication has been driven both by theeffectiveness of the URU service in preventing identity fraud and by the growthin the market for electronic age and Identity checks. In a recent piece of research conducted on behalf of GB by Manchester BusinessSchool, it was estimated that the market for electronic identity checks in theUK will grow to over 300 million electronic checks per annum by 2010 and beworth over £200 million. It is GB's aim to secure a significant share of thismarket together with BT. Our strategy to achieve this is to continue to provide the most effectiveservice based on GB's ID3(TM) technology (previously GB Authenticator(TM)) which is combined with BT's delivery infrastructure and has proved to be extremelyreliable, robust and scaleable. Our success to date is reflected in the growth of the number of clients usingURU and the growth in the transactional volumes being processed by thoseclients. Transactional volumes increased from 172,000 transactions per quarterto 572,000 per quarter over the course of the year ended 31 March 2006. Thisfigure excludes one-off batch re-verification jobs which generated additionalrevenue. This pleasing growth has been achieved by focusing on our three coresectors of OnIine Gaming, Mobile Telecommunications and Financial Services andhas continued into the current year. URU dominates the Online Gaming sector for the provision of age and identityverification solutions. 75% of the Top 20 "Online Gaming Power 50" UKorganisations (including Partygaming, Cassava, Betfair and Sporting Bet) are URUclients. URU is the market leader in the provision of electronic identity verificationsolutions to the Mobile Telecommunications sector. URU clients include O2, andsince introducing URU, O2 has seen customer disconnection levels, fallsignificantly. In the Financial Services sector, encouraging progress to date includes thefirst deployment of URU by a number of major retail banks which now utilise itin niche applications. Our range of clients, particularly those in Online Gaming, have a need to verifyindividuals connecting to their services from overseas and, to meet this demand,we have allocated resource in the coming year to extend our service in order toverify American and certain European nationals. We remain on target to achieve cash breakeven in DataAuthentication, beforeinvestment in international developments, by the end of the year ending 31 March2007 and thereafter DataAuthentication is expected to be cash generative. DataIntegrity and DataSolutions GB's traditional services, DataIntegrity and DataSolutions which operate inestablished, competitive and challenging markets, produced turnover andprofitability marginally ahead of last year. GB is creating innovativeenhancements to its existing offerings, the first of which is the recentlylaunched 4C-UK(TM) service, GB's lifestage data service. This service enables organisations to foresee the principal lifestage changesthat affect the spending patterns and behaviour of their customers. The firstcomponent of the service is "Pre-Homemovers" which accurately predicts whenindividuals will move home and enables supplier organisations to tailorproactively their customer service and retention strategies in order to minimisethe impact for their customers. Pre-Homemovers data is derived from propertysearches conducted in the final stages of home conveyancing and is exclusive toGB. During the coming year, an online web delivery service will offer our clientsonline access to both existing and new services. This method of delivery,successfully utilised by the URU service, has already demonstrated that clientsare comfortable with and will embrace online technology which offers secure andreliable services. This further investment in product development is required toprovide differentiation and protect our existing markets. Summary DataAuthentication has had considerable success to date and long term itrepresents an exceptional opportunity for the Group. Our business remains in very good shape and our balance sheet and cash balancesremain strong. In the coming year, our investment in the Group's traditionalservices, together with the investment in international opportunities inDataAuthentication as well as the infrastructure to ensure that our growth cancontinue is expected to result in net cash outflow. As a guide, however, cashbalances should not fall below £5 million during the course of the current year,and strong cash generation is expected in the following year. The year ahead is planned to be a step change for GB and I continue to beexcited by the Group's future prospects and opportunities. R A LawChief Executive BUSINESS AND FINANCIAL REVIEW The Group has had an impressive year, building a leading position throughDataAuthentication as a provider of electronic solutions for age and IDverification in the UK and maintaining the underlying position of DataIntegrityand DataSolutions in keenly competitive, established markets. During the year, Group revenue was 14% higher than the previous year at £12.8million (2005: £11.2 million). The value of non-returnable amounts invoiced toclients, in the period, was £13.3 million (2005: £11.2 million), £0.5 million(2005: nil) of which was carried over to future periods. This growth in revenueand amounts invoiced was generated principally by DataAuthentication. The Group invested an additional £868,000 in DataAuthentication compared to theprevious year. This additional investment was partially offset by greaterprofitability from DataIntegrity and DataSolutions. Exceptional items of £58,000 (2005: £321,000) associated with staff reorganisation costs were incurred, leaving an operating loss of £570,000 (2005: £134,000). The Group financial highlights of the year were as follows: • GB's investment in DataAuthentication was increased by £868,000 to £1.6 million (2005: £767,000). The investment principally relates to sales, marketing and product development costs. • DataAuthentication invoiced amounts were £2.4 million (2005: £600,000) and recognised revenue was £1.9 million (2005: £600,000). • Combined revenue generated by DataIntegrity and DataSolutions was marginally higher than the previous year at £10.9 million. • Other operating expenses for the Group were £1.2 million higher than the previous year as a result of the increased investment in sales, marketing and development costs in DataAuthentication. • Exceptional items relating to staff reorganisation costs of £58,000 were expensed in the year, compared to one-off exceptional items of £321,000 in the previous year. • On a like-for-like comparison, before investment in DataAuthentication, the operating results of the Group was £432,000 better than the previous year. • Finance revenue from bank interest earned during the year was £302,000 (2005: £280,000) and the loss before taxation was £268,000 (2005: £146,000 profit). • The loss for the year attributable to equity holders was £242,000 (2005: £255,000 profit) after taking account of the increased investment in DataAuthentication of £868,000 compared to last year. Revenue Revenue for the Group showed strong growth principally as a result of increasedDataAuthentication revenues. DataAuthentication revenues for the year were £1.9million (2005: £600,000) and combined revenues from DataIntegrity andDataSolutions were £10.9 million (2005: £10.6 million). Gross Profit and Cost of Sales The gross profit margin for the Group for the year was 55% (2005: 58%). This wasprincipally as a result of the growth in revenue generated byDataAuthentication, as a proportion of Group revenue. GB shares revenue fromDataAuthentication with BT which is classified as a cost of sale and,consequently, DataAuthentication has a lower underlying gross margin than therevenue generated by DataIntegrity and DataSolutions. Other Operating Expenses before Exceptional Items Other operating expenses, excluding exceptional items, were £7.6 million (2005:£6.4 million). However, the mix of expenditure changed compared to the previousyear as follows: • DataAuthentication's costs increased by £1.2 million to £2.0 million, due primarily to sales, marketing and development costs. • Operating costs with respect to DataIntegrity and DataSolutions remained in line with the previous year at £5.5 million. Group Profit/Loss The operating loss was £570,000 (2005: £134,000 loss) and finance revenue earnedduring the year was £302,000 (2005: £280,000) resulting in a loss before tax of£268,000 (2005: £146,000 profit). Taxation The Group provided for taxation credits of £12,000 (2005: £103,000) with respectto research and development tax credits. The figures for 2005 were higher dueprimarily to the incorporation of a prior year credit adjustment in relation to2004 in addition to the tax credits for 2005. Research and development taxcredits are reclaimed on "pure" research and development projects andconsequently, claims for tax credits vary from year to year in relation to thelife cycles of development projects. The Group has recognised a deferred tax asset of £360,000 (2005: £346,000). At 31 March 2006, the Group had potential deferred tax assets of £7.2 million(2005: £6.8 million) of which £360,000 (2005: £346,000) had been recognised. In accordance with IAS 12, trading losses carried forward were £20.2 million(2005: £19.8 million) and capital losses were £2.3 million (2005: £2.3 million). Dividend The Board of Directors will propose a final ordinary dividend of 0.75 pence pershare, amounting to £618,000 (2005: £404,000). As a result of the implementationof International Financial Reporting Standards, dividends are now recognised inthe accounts in the year in which they are paid, or in the case of a finaldividend when approved by the shareholders. The amount recognised in the 2006accounts, as described in note 11, is the final ordinary dividend for the yearended 31 March 2005. The final ordinary dividend with respect to the year ended 31 March 2006, ifapproved, will be paid on 28 July 2006 to ordinary shareholders whose nameswere on the register on 1 July 2006. Amounts Transferred From Reserves The amount transferred from reserves is £447,000 (2005: £37,000) afteraccounting for the previous year's dividend of £404,000 (2005: £398,000) whichwas paid during the year ended 31 March 2006. Balance Sheet and Liquidity Explanations of the most significant items in the Balance Sheet during the yearare as follows: Intangible Assets The carrying value of goodwill at 31 March 2006 was £6.5 million (2005: £6.5million). In accordance with IAS 36 'Impairment of Assets', goodwill is testedannually for impairment and no impairment was required. Trade and Other Receivables The value of trade and other receivables increased by £688,000 to £2.9 millionat 31 March 2006, compared to the same date last year. This was principally as aresult of an increase in the level of trade receivables, which increased as aresult of higher invoiced amounts in the final quarter of the year compared tothe same quarter in the previous year. Cash Flows The net result is that cash and cash equivalents reduced by £2,000 (2005:£110,000) during the year. Further analysis of these movements are included inthe Consolidated Cashflow Statement. Cash and Cash Equivalents At 31 March 2006, the Group held cash and short term deposit balances of £6.7million (2005: £6.7 million) and in accordance with the Group's treasury policy,all funds are placed with major UK clearing banks and building societies. Trade and Other Payables The value of trade and other payables has increased by £972,000 to £3.3 millionat 31 March 2006, compared to the same period last year. The principal reasonfor this is an increase in accruals and deferred income. The value of deferredincome has increased by £493,000 compared to the same period last year and is asa result of the deferral of amounts invoiced in relation to DataAuthenticationrevenues in accordance with IAS 18. Revenue is recognised on these contracts byreference to the stage of completion and accordingly, any upfront payments arespread. Treasury Policy and Financial Risk The Group's treasury operation is managed within formally defined policies whichare reviewed by the Board. The Group finances its activities with cash andshort-term deposits. Other financial assets and liabilities, such as tradereceivables and trade payables, arise directly from the Group's operatingactivities. Surplus funds of the Group are invested through the use ofshort-term deposits with the objective of maximising fixed interest rate returnswhilst still providing the flexibility to fund on-going operations whenrequired. It is not the Group's policy to engage in speculative activity or touse complex financial instruments. International Financial Reporting Standards (IFRS) The Group's conversion to IFRS was communicated to shareholders in the 2005interim report. As previously advised, the change in reporting regime has notchanged the fundamentals of the Group's businesses and the actions required ofmanagement to maintain and improve shareholder value. MT Navin-MealeyGroup Finance Director CONSOLIDATED INCOME STATEMENT Year ended 31 March 2006-------------------------------------------------------------------------------- Note 2006 2005 £'000 £'000 Revenue 12,835 11,231 Cost of sales (5,800) (4,678) -------- ------- Gross profit 7,035 6,553 Other operating expenses (7,547) (6,366) Exceptional items (58) (321) -------- ------- Operating loss (570) (134) Finance revenue 302 280 -------- ------- (Loss)/profit before tax (268) 146 Income tax 26 109 -------- ------- (Loss)/profit for the year attributable to equity holders of the parent (242) 255 -------- ------- (Loss)/earnings per share - basic (loss)/earnings per share for the year 1 (0.3)p 0.3p - diluted (loss)/earnings per share for the year 1 (0.3)p 0.3p CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 March 2006--------------------------------------------------------------------------------------------- Equity Merger Capital Retained Total share reserve redemption earnings equity capital reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2004 5,122 6,575 3 1,906 13,606 ------ ------- ------- ------ ------Profit for the period - - - 255 255 ------ ------- ------- ------ ------ Total income and expense for the period - - - 255 255 Exercise of options 49 - - - 49 Cost of share-based payments - - - 106 106 Equity dividend - - - (398) (398) ------ ------- ------- ------ ------Balance at 31 March 2005 5,171 6,575 3 1,869 13,618 ------ ------- ------- ------ ------Loss for the period - - - (242) (242) ------ ------- ------- ------ ------ Total income and expense for the period - - - (242) (242) Exercise of options 279 - - - 279 Cost of share-based payments - - - 199 199 Equity dividend - - - (404) (404) ------ ------- ------- ------ ------Balance at 31 March 2006 5,450 6,575 3 1,422 13,450 ------ ------- ------- ------ ------ COMPANY STATEMENT OF CHANGES IN EQUITY Year ended 31 March 2006--------------------------------------------------------------------------------------------- Equity Merger Capital Retained Total share reserve redemption earnings equity capital reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2004 5,122 6,575 3 4,354 16,054 ------ ------- ------- ------ ------Profit for the period - - - 123 123 ------ ------- ------- ------ ------ Total income and expense for the periiod - - - 123 123 Exercise of options 49 - - - 49 Cost of share-based payments - - - 106 106 Equity dividend - - - (398) (398) ------ ------- ------- ------ ------Balance at 31 March 2005 5,171 6,575 3 4,185 15,934 ------ ------- ------- ------ ------Loss for the period - - - (242) (242) ------ ------- ------- ------ ------ Total income and expense for the period - - - (242) (242) Exercise of options 279 - - - 279 Cost of share-based payments - - - 199 199 Equity dividend - - - (404) (404) ------ ------- ------- ------ ------Balance at 31 March 2006 5,450 6,575 3 3,738 15,766 ------ ------- ------- ------ ------ CONSOLIDATED BALANCE SHEET As at 31 March 2006-------------------------------------------------------------------------------- 2006 2005 £'000 £'000 ASSETS Non-current assets Property, plant and equipment 331 361Goodwill 6,506 6,506Deferred tax asset 360 346 -------- ------- 7,197 7,213 -------- ------- Current assets Trade and other receivables 2,868 2,180Current tax 57 45Cash and short-term deposits 6,747 6,749 -------- ------- 9,672 8,974 -------- -------TOTAL ASSETS 16,869 16,187 -------- ------- EQUITY AND LIABILITIES Capital and reserves Equity share capital 5,450 5,171Merger reserve 6,575 6,575Capital redemption reserve 3 3Retained earnings 1,422 1,869 -------- -------Total equity attributable to equity holders of the parent 13,450 13,618 -------- ------- Non-current liabilities Provisions - 230 -------- ------- Current liabilities Trade and other payables 3,311 2,339Provisions 108 - -------- ------- 3,419 2,339 -------- -------TOTAL LIABILITIES 3,419 2,569 -------- -------TOTAL EQUITY AND LIABILITIES 16,869 16,187 -------- ------- COMPANY BALANCE SHEET As at 31 March 2006-------------------------------------------------------------------------------- 2006 2005 £'000 £'000ASSETS Non-current assets Property, plant and equipment 331 361Investments 9,317 9,317Deferred tax asset 360 346 -------- ------- 10,008 10,024 -------- ------- Current assets Trade and other receivables 2,884 2,196Current tax 57 45Cash and short-term deposits 6,747 6,749 -------- ------- 9,688 8,990 -------- -------TOTAL ASSETS 19,696 19,014 -------- ------- EQUITY AND LIABILITIES Capital and reserves Equity share capital 5,450 5,171Merger reserve 6,575 6,575Capital redemption reserve 3 3Retained earnings 3,738 4,185 -------- -------Total equity 15,766 15,934 -------- ------- Non-current liabilities Provisions - 230 -------- -------Current liabilities Trade and other payables 3,822 2,850Provisions 108 - -------- ------- 3,930 2,850 -------- -------TOTAL LIABILITIES 3,930 3,080 -------- -------TOTAL EQUITY AND LIABILITIES 19,696 19,014 -------- ------- CONSOLIDATED CASH FLOW STATEMENT Year ended 31 March 2006-------------------------------------------------------------------------------- 2006 2005 £'000 £'000 Cash flow from operating activities Operating loss (570) (134)Depreciation 187 222Loss on disposal of property, plant and equipment 3 -Share-based payments 199 106Decrease in inventory - 18(Decrease)/increase in provisions (122) 98(Increase)/decrease in trade and other receivables (688) 204Increase/(decrease) in trade and other payables 972 (420) -------- -------Cash (consumed)/generated from operations (19) 94 Income tax received - 58 -------- -------Net cash (consumed)/generated from operating activities (19) 152 -------- ------- Cash flow from investing activities Acquisition of a subsidiary, net of cash acquired - (20) Purchase of property, plant and equipment (160) (173) Interest received 302 280 -------- -------Net cash flow from investing activities 142 87 -------- ------- Cash flows from financing activities Proceeds from issue of shares 279 49 Dividends paid to equity shareholders of the parent (404) (398) -------- -------Net cash flow from financing activities (125) (349) -------- ------- Net decrease in cash and cash equivalents (2) (110)Cash and cash equivalents at the beginning of the period 6,749 6,859 -------- -------Cash and cash equivalents at the end of the period 6,747 6,749 -------- ------- COMPANY CASH FLOW STATEMENT Year ended 31 March 2006-------------------------------------------------------------------------------- 2006 2005 £'000 £'000 Cash flow from operating activities Operating loss (570) (266)Depreciation 187 222Loss on disposal of property, plant and equipment 3 -Share-based payments 199 106Decrease in inventory - 18(Decrease)/increase in provisions (122) 98(Increase)/decrease in trade and other receivables (688) 307Increase/(decrease) in trade and other payables 972 (366) -------- -------Cash (consumed)/generated from operations (19) 119 Income tax received - 58 -------- -------Net cash (consumed)/generated from operating activities (19) 177 -------- ------- Cash flow from investing activities Acquisition of a subsidiary, net of cash acquired - (20) Purchase of property, plant and equipment (160) (173) Interest received 302 280 -------- -------Net cash flow from investing activities 142 87 -------- ------- Cash flows from financing activities Proceeds from issue of shares 279 49 Dividends paid to equity shareholders of the parent (404) (398) -------- -------Net cash flow from financing activities (125) (349) -------- ------- Net decrease in cash and cash equivalents (2) (85)Cash and cash equivalents at the beginning of the period 6,749 6,834 -------- -------Cash and cash equivalents at the end of the period 6,747 6,749 -------- ------- NOTES TO THE PRELIMINARY ANNOUNCEMENT 1. Earnings Per Ordinary Share Basic Basic earnings per share is calculated by dividing the profit attributable toequity holders of the Company by the basic weighted average number of ordinaryshares in issue during the year. 2006 2006 2005 2005 pence per £'000 pence per £'000 share share (Loss)/profit attributable to equity holders of the parent (0.3) (242) 0.3 255 ------- ------- ------- ------- Diluted Diluted earnings per share amounts are calculated by dividing the net profit forthe year attributable to ordinary equity holders by the weighted average numberof ordinary shares outstanding during the year plus the weighted average numberof ordinary shares that would be issued on the conversion of all the dilutivepotential ordinary shares into ordinary shares. 2006 2005 No. No. Basic weighted average number of shares in issue 81,061,685 79,754,856Diluted effect of share options - 3,076,165 ---------- ----------Diluted weighted average number of shares in issue 81,061,685 82,831,021 ---------- ---------- The loss for the period and the weighted average number of ordinary shares forcalculating the diluted earnings per share for the period to 31 March 2006 areidentical to those used for the basic earnings per share. This is because theoutstanding share options would have the effect of reducing the loss perordinary share and would therefore not be dilutive under the terms ofInternational Accounting Standard No. 33 (IAS 33). 2006 2006 2005 2005 pence per £'000 pence per £'000 share share (Loss)/profit attributable to equity holders of the Company (0.3) (268) 0.3 255 ------- ------- ------- ------- OTHER INFORMATION 1. The above financial information, which is unaudited, does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefinancial information for the year ended 31 March 2006 has been extracted fromthe draft statutory accounts on which an unqualified audit opinion is expectedto be issued. Statutory accounts for the year ended 31 March 2006 will bedelivered to the Registrar in due course. Those accounts, upon which theauditors issued an unqualified opinion, have been delivered to the Registrar ofCompanies. 2. The preliminary statement was approved by the board of directors of GB Groupplc on 6 June 2006. 3. The ex-dividend date is 5 July 2006; the record date is 7 July 2006; thepayment date is 28 July 2006. 4. The AGM will take place on 12 July 2006. 5. The 2006 interim results announcement is expected to be on 29 November 2006. 6. This report will also be available on the GB Group web site: www.gb.co.ukfrom 7 June 2006. 7. The Company intends to dispatch to shareholders printed copies of the fullannual report and accounts for the year to 31 March 2006 by 19 June 2006. This information is provided by RNS The company news service from the London Stock Exchange