HMLH.L Regulatory News (HMLH)

4 Dec 2007 07:01

HML Holdings PLC04 December 2007 HML HOLDINGS Plc ("HML or "the Group") Interim results 6 months to 30 September 2007 HML Holdings plc (AIM: HMLH), the property management service group, todayannounces its interim results for the six months ended 30 September 2007. Highlights: •Turnover increased by 21% to £3.3 million (2006 : £2.8 million) •Operating profit before amortisation and share based payments increased by 15% to £190,000 (2006: £165,000) •Acquisitions in central London and Hampshire enhance client base and geographical coverage £€1.9 million placing creates acquisition growth opportunities Commenting on the results, Robert Plumb, Chief Executive of HML Holdings plc,said: "We are pleased with the results the Group has achieved in the first sixmonths of this financial year. The business has demonstrated again its abilityto grow organically while keeping the high levels of service associated with ourbrand. Further we have been able to successfully integrate our recentacquisitions and through support from our shareholders, raise additional fundsto continue our programme of select acquisitions." For further information: HML Holdings Plc Tel: 020 7352 5179Robert Plumb, Chief ExecutiveJames Howgego, Financial Director Tavistock Communications Tel: 020 7920 3150Paul Yoeuns/ John West Smith & Williamson Corporate Finance Limited Tel: 020 7131 4000Azhic Basirov/ Siobhan Sergeant CHAIRMAN AND CHIEF EXECUTIVE'S REPORT We have taken great strides in the first half of the year to grow and expand ouroperating network. The business has demonstrated again its ability to groworganically as well as successfully integrate acquisitions. We continue todemonstrate our business model with improvements in the sale of our ancillaryservices to our management clients. In May we acquired the partnership of Harrisons, based in Aldershot. This hasprovided us with an excellent opportunity to expand our local services toclients in the Surrey and Hampshire regions. Not only are we pleased with thenew business we have won in this area since acquisition, but we have also beenable to successfully transfer the management of a number of buildings from ourLondon office to Aldershot, strengthening our service provision to theseproperties. This smaller business unit now operates as a satellite of ourCroydon based business HML Andertons. Our strategy of being able to offer abetter service with local management from satellite offices has beensuccessfully demonstrated by this first example of extending our regionalpresence. In August we completed the acquisition of the business and assets of W A EllisProperty Management Limited following the successful share placing raising £1.9million. This business has substantially enhanced our presence in the highlysought after West End property management market. We can report that wesuccessfully relocated the business to our Victoria offices in October and areextremely pleased with the valuable contribution its experienced staff aremaking to our central London operation. Equally we are encouraged by the rangeof opportunities we have to enhance the contribution of this business within theHML Group. Financial Results The Group recorded an operating profit before amortisation and share basedpayments of £190,000 during the period, representing a 15% improvement over theequivalent period in 2006 (£165,000). Revenue for the period increased 21% to £3,345,000 (2006 £2,769,000) Outlook The outlook for the second half of the year remains positive and we areconfident of our businesses' ability to achieve organic growth. We are pleasedwith the relatively higher contribution that new management instructions wonfrom other agents on pre- existing blocks of flats is making in comparison tonew managements from newly built sites. We believe that this combined with thecontribution of our new acquisitions will enhance our earnings in the secondhalf of the year. Richard Smith Robert PlumbChairman Chief Executive 3 December 2007 HML HOLDINGS PlcCONSOLIDATED INCOME STATEMENTFor the six months ended 30 September 2007 Notes Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000Continuing operations Revenue 3,345 2,769 5,810--------------------- ------ --------- --------- ---------Direct operating expenses (2,801) (2,322) (4,942)Central operating overheads (354) (282) (555)Share based payment charge (30) (30) (59)Amortisation of intangible (18) (10) (21)assets ------ --------- --------- ---------Total operating expenses (3,203) (2,644) (5,577)--------------------- ------ --------- --------- ---------Operating Profit 142 125 233Finance income 1 - 2Finance costs (11) - (1)--------------------- ------ --------- --------- ---------Profit before Taxation 132 125 234Taxation (18) (20) (17)--------------------- ------ --------- --------- ---------Profit for the Period 114 105 217--------------------- ------ --------- --------- --------- Earnings per share (in pence) Basic 4 0.6 1.4 2.0Diluted 4 0.6 1.2 1.6--------------------- ------ --------- --------- --------- The 30 September 2006 and the 31 March 2007 results have been restated due tothe adoption of International Financial Reporting Standards ("IFRS") - see note2. Profit before share based payments and amortisation reconciliation Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 --------- --------- ---------Operating profit per income statement 142 125 233--------------------- --------- --------- ---------Addback:Share based payment charge 30 30 59Amortisation of intangible assets 18 10 21--------------------- --------- --------- ---------Operating profit before share basedpayments and amortisation 190 165 313--------------------- --------- --------- --------- HML HOLDINGS PlcCONSOLIDATED BALANCE SHEET30 September 2007 Notes Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 Non-Current Assets Goodwill 3,801 2,897 2,959Other intangible assets 1,434 517 611Property, plant and equipment 235 252 219--------------------- ------ --------- --------- ---------Total Non-Current Assets 5,470 3,666 3,789 Current Assets Trade and other receivables 1,180 898 1,069Cash and cash equivalents 720 284 368--------------------- ------ --------- --------- ---------Total Current Assets 1,900 1,182 1,437--------------------- ------ --------- --------- ---------Total Assets 7,370 4,848 5,226--------------------- ------ --------- --------- --------- Current Liabilities Trade and other payables (1,121) (1,156) (1,103)Current tax liabilities (17) (20) (17)--------------------- ------ --------- --------- ---------Total Current Liabilities (1,138) (1,176) (1,120)--------------------- ------ --------- --------- ---------Net Current Assets 762 6 317--------------------- ------ --------- --------- ---------Non-Current Liabilities Deferred consideration (125) (225) (219)Tax liabilities (18) - - Convertible loan notes 5 - (1,872) (1,623)--------------------- ------ --------- --------- ---------Total Non-Current Liabilities (143) (2,097) (1,842)--------------------- ------ --------- --------- ---------Total Liabilities (1,281) (3,273) (2,962)--------------------- ------ --------- --------- ---------Net Assets 6,089 1,575 2,264--------------------- ------ --------- --------- --------- Equity Share capital 6 365 171 246Share premium 4,642 1,479 2,703Other reserves 5 1,798 926 175Merger reserve (15) (15) (15)Retained earnings (701) (986) (845)--------------------- ------ --------- --------- ---------Total Equity 6,089 1,575 2,264--------------------- ------ --------- --------- --------- The 30 September 2006 and the 31 March 2007 results have been restated due tothe adoption of International Financial Reporting Standards ("IFRS") - see note2. HML HOLDINGS PlcCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months ended 30 September 2007 Notes Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 Profit for the period 114 105 217--------------------- ------ --------- --------- ---------Total recognised income andexpense for the period 114 105 217--------------------- ------ --------- --------- ---------Shares issued in the period 2,058 1,611 2,910Share based payment 30 30 59Loan note reclassification 1,623 926 175--------------------- ------ --------- --------- ---------Net change in equity in the 3,825 2,672 3,361period ------ --------- --------- ------------------------------Opening equity 2,264 (1,097) (1,097)--------------------- ------ --------- --------- ---------Closing equity 6,089 1,575 2,264--------------------- ------ --------- --------- --------- The 30 September 2006 and the 31 March 2007 results have been restated due tothe adoption of International Financial Reporting Standards ("IFRS") - see note2. HML HOLDINGS PlcCONSOLIDATED CASH FLOW STATEMENTfor the six months ended 30 September 2007 Notes Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 ----------------------- ------ --------- --------- --------Operating activities 7a 236 195 417Cash generated from operations----------------------- ------ --------- --------- --------Net cash flow from operatingactivities 236 195 417----------------------- ------ --------- --------- --------Investing activities Interest received 1 - 2Interest paid/received (11) - (1)Purchases of property, plant andequipment (78) (46) (67)Acquisition of subsidiaries 7b (1,624) (841) (1,108)----------------------- ------ --------- --------- --------Net cash flow used in investingactivities (1,712) (887) (1,174)----------------------- ------ --------- --------- --------Financing activities Proceeds from the issue of newshares 1,934 353 653Share issue expenses (106) (242) (243)Increase in debt - 750 600----------------------- ------ --------- --------- --------Net cash flow from financingactivities 1,828 861 1,010----------------------- ------ --------- --------- --------Increase/decrease in cash andcash 352 169 253equivalentsCash and cash equivalents at thestart of period 368 115 115----------------------- ------ --------- --------- --------Cash and cash equivalents at theend of the period 720 284 368----------------------- ------ --------- --------- -------- The 30 September 2006 and the 31 March 2007 results have been restated due tothe adoption of International Financial Reporting Standards ("IFRS") - see note2. HML HOLDINGS PlcNOTES TO THE ACCOUNTS 1. General Information The interim unaudited financial information was approved by the board on 3 December 2007. The interim financial statements are unaudited and do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ending 31 March 2007 (prepared in accordance with UK GAAP) were prepared and filed with the Registrar of Companies and received an unqualified audit report and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. Copies of the interim report are available from www.hmlholdings.com or from the Company Secretary at HML Holdings plc, 28 Old Church Street, London, SW3 5BY. 2. International Financial Reporting Standards HML Holdings Plc has adopted International Financial Reporting Standards ('IFRS') this year, having previously applied UK accounting standards. These interim statements are the first that the company has prepared under IFRS and they have been prepared in accordance with the IFRS accounting policies that management expects to apply in the 31 March 2008 IFRS complaint full year financial statements. The comparative results for the six months ended 30 September 2006 and the year ended 31 March 2007 have been restated accordingly. Reconciliations from the previously stated UK GAAP financial information together with and the revised accounting policies are set out in notes 9 and 10. 3. Taxation Taxation for the six months to 30 September 2007 is based on the effective rate of taxation which is estimated to apply for the year ending 31 March 2008. Taxation for the year ended 31 March 2007 is based on the actual rate of taxation which applied for the year ended 31 March 2007. Taxation for the six months to 30 September 2006 was based on the effective rate of taxation which was estimated to apply for the year ended 31 March 2007. 4. Earnings per share Unaudited Unaudited Unaudited 6 months to 6 months to Year ended 30 September 30 September 31 March 2007 2006 2007 ------------------- --- --- --------- --------- ---------Profits for basic anddiluted earnings per share (£'000)Profit for the period 114 105 217------------------- --- --- --------- --------- ---------Weighted average number ofshares (000s)For basic earnings per 19,029 7,592 10,651shareEffect of dilutivepotential ordinary shares:- convertible loan notes 53 791 2,174- share options 425 235 423 ------------------- --- --- --------- --------- ---------Fully diluted 19,507 8,618 13,247------------------- --- --- --------- --------- ---------Earnings per share (in pence)Basic 0.6 1.4 2.0Diluted 0.6 1.2 1.6------------------- --- --- --------- --------- --------- 5. Convertible loan notes During the year ended 31st March 2007, the company issued £2,798,000 of loan notes to replace existing debt due to LTC Holdings plc, the former parent company. The loan notes are convertible into 1.5p ordinary shares at a rate of 25p and are non interest bearing. In March 2007 £1,000,000 of the loan notes were converted, leaving a balance of £1,798,000 outstanding at 31 March 2007. The loan notes can be converted at any time at the option of the holder, subject to the fact that the holder's shareholding cannot exceed 50% of the company's total issued share capital. Due to the issuance of share capital in August 2007, all the loan notes can be converted without exceeding the 50% limit and therefore the loan notes are now classified as equity in other reserves. 6. Share capital During the six months ending 30 September 2007, 7,955,000 ordinary 1.5p shares were issued for total consideration of £2,164,000. 7. Notes to the cash flow statement Unaudited Unaudited Audited 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000 a. Cash generated from operations Operating profit 142 125 233 Share-based payment 30 30 59 Depreciation of plant and equipment 62 55 115 Amortisation of intangible assets 18 10 21 (Increase)/decrease in trade and (111) (367) 32 other receivables Increase in trade and other payables 95 342 (43) --------- --------- -------- Cash generated from operations 236 195 417 --------- --------- -------- b. Acquisition of subsidiaries Consideration paid on acquisitions (1,367) (671) (938) Consideration paid on prior period (257) (170) (170) acquisitions --------- --------- -------- Net cash outflow for acquisitions (1,624) (841) (1,108) --------- --------- -------- 8. Acquisitions On 1st May 2007, HML Andertons Limited purchased the trade and assets of Harrisons, a property management business based in Aldershot. The total consideration was £324,000. On 13th August 2007, HML Hawksworth Limited purchased 100% of the shares of WA Ellis Property Management Limited a property management business based in Knightsbridge. The total consideration was £1.3 million. 9. Summary of significant accounting policies As explained in note 2, the group will be presenting its financial statements in accordance with IFRS for the first time in 31 March 2008 full year financial statements. Set out below are the accounting policies that management expects to apply in the 31 March 2008 IFRS-compliant full year financial statements. Basis of preparation The consolidated financial statements are prepared on a historical cost basis. Figures are presented in Sterling and rounded to the nearest thousand (£'000). Basis of consolidation The consolidated financial statements comprise the results of HML Holdings Plc and all of its subsidiaries. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are eliminated in full. Business combinations Business combinations are accounted for using the purchase method. This involves recognising identifiable assets (including previously unrecognised intangible assets) and liabilities (including contingent liabilities and excluding future restructuring) of the acquired business at fair value. Goodwill acquired in a business combination is initially measured at cost, being the excess of the fair value of the cost of the business combination over the group's share of the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities. Contingent consideration Where the cost of a business combination includes amounts that are contingent on future events, these amounts are included in the cost of the business combination to the extent that they are probable and can be measured reliably. Contingent cash consideration is discounted and recorded at net present value as a provision. Contingent share consideration, where the number of shares to be issued is dependent on the market price of the company's shares is measured on the effective interest method and is also recorded as a liability. If the events on which consideration is contingent do not occur, the cost of the business combination is adjusted. If and when additional amounts of contingent consideration become probable or payable, they are also treated as an adjustment to the cost of the business combination. Intangible assets Goodwill Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to the group's cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets of liabilities of the group are assigned to those units. Goodwill is reviewed for impairment annually or more frequently if there is an indication of impairment. Impairment for goodwill is determined by assessing the recoverable amount of the cash-generation unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying value of the cash-generating unit to which goodwill has been allocated, an impairment loss is recognised. Impairment losses to goodwill cannot be reversed in the future periods. Other intangible assets Intangible assets acquired separately are measured on initial recognition at cost. An intangible asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses, internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the income statement in the year in which the expenditure is incurred. Intangibles assets with finite lives are amortised over their useful life and assessed for impairment whenever there is an indication of impairment. The amortisation period and the amortisation method for intangible assets with finite useful lives are reviewed at least at each financial year end. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset. Amortisation is provided on straight line basis on intangible assets with finite lives as follows: Customer Relationships 25 years Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment in value. Depreciation is provided at rates calculated to write each asset down to its estimated residual value evenly over its expected useful life, as follows: Short leasehold improvements over the shorter of the useful life and the lease period Motor vehicles 25% on straight line basis Fixtures and fittings 20% on straight line basis Computer and office equipment 25% on straight line basis The carry values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable, and are written down immediately to their recoverable amount. Useful lives are residual values are reviewed annually and where adjustments are required these are done prospectively. Cash and cash equivalents Cash and cash equivalents comprise of cash at banks and in hand and short term deposits. For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Revenue Revenue is recognised to the extent that it is probable that economic benefits will flow to the group and the revenue can be reliably measured. It is measured as the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business. Revenue in property services companies is recorded on an accruals basis. Revenue is accrued for services provided by the accounting date but not invoiced and deferred if services are invoiced but not fully provided by the accounting date. Revenue derived from property insurance services comprises of broking and insurance commissions which are recognised when the right to receive consideration is obtained. Share-based payment transactions The group has adopted IFRS 2 "Share Based Payment" in the current year. IFRS 2 requires the recognition of a charge for share based payment transactions which include for example share options or restricted shares granted to employees that require a certain length of service before vesting. The fair value of the options granted is measured on the date at which they are granted by using the Black Scholes option pricing model and is expensed to the profit and loss account over the appropriate vesting period. Restricted shares are expensed over the restricted period using the most appropriate valuation techniques. Taxation The tax expense in the income statement represents the sum of tax currently payable and movements in deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of the assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balances sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is likely that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Impairment of goodwill and other intangibles assets Goodwill and other intangible assets are tested for indication of impairment on an annual basis. This requires an estimation of the recoverable amount of a cash generation unit to which goodwill is allocated based on its 'value in use'. Estimation of 'value in use' requires management to estimate the expected future cash flows from the cash generating unit and choose and appropriate discount factor in order to calculate the present value of those cash flows. 10. Explanation of transition to International Financial Reporting Standards ("IFRS") This is the group's first interim report prepared in accordance with the IFRS accounting policies management expect to apply in their first IFRS compliant full year financial statements. The reconciliations of balance sheets and equity at 1 April 2006 (date of transition to IFRS), 31 March 2007 (date of last UK GAAP financial statements) and 30 September 2006 (date of last UK GAAP interim report) are set out below. In addition there is a reconciliation of profit for the six month period to 30 September 2006 and the year ended 31 March 2007 below. These reconciliations will enable comparison of the 2007 interim figures under IFRS with those published under UK GAAP in the 2006 interim report and the annual report for the year ended 31 March 2007. 10a. Consolidated balance sheet as at 1 April 2006 UK GAAP Effect of IFRS £'000 Transition £'000 £'000 ----------------------- -------- -------- --------Non-Current Assets Goodwill 2,365 - 2,365Other intangible assets - - -Property, plant and equipment 253 - 253----------------------- -------- -------- --------Total Non-Current Assets 2,618 - 2,618----------------------- -------- -------- --------Current Assets Trade and other receivables 900 - 900Cash and short term deposits 161 - 161----------------------- -------- -------- --------Total Current Assets 1,061 - 1,061----------------------- -------- -------- --------Total Assets 3,679 - 3,679----------------------- -------- -------- -------- Current Liabilities Trade and other payables (1,078) - (1,078)Current tax liabilities - - ------------------------ -------- -------- --------Total Current Liabilities (1,078) - (1,078)----------------------- -------- -------- --------Net Current Liabilities (17) - (17)----------------------- -------- -------- --------Non-Current Liabilities Contingent consideration (300) - (300)Other payables (3,398) - (3,398)----------------------- -------- -------- --------Total Non-Current Liabilities (3,698) - (3,698)----------------------- -------- -------- --------Total Liabilities (4,776) - (4,776)----------------------- -------- -------- --------Net Assets (1,097) - (1,097)----------------------- -------- -------- -------- 10b. Consolidated balance sheet as at 31 March 2007 ----------------------- -------- -------- -------- UK GAAP Effect of IFRS £'000 Transition £'000 £'000 ----------------------- -------- -------- --------Non-Current Assets Goodwill 3,523 (564) 2,959Other intangible assets - 611 611Property, plant and equipment 219 - 219----------------------- -------- -------- --------Total Non-Current Assets 3,742 47 3,789----------------------- -------- -------- --------Current Assets Trade and other receivables 1,069 - 1,069Cash and short term deposits 368 - 368----------------------- -------- -------- --------Total Current Assets 1,437 - 1,437----------------------- -------- -------- --------Total Assets 5,179 47 5,226----------------------- -------- -------- -------- Current Liabilities Trade and other payables (1,120) - (1,120)Current tax liabilities - - ------------------------ -------- -------- --------Total Current Liabilities (1,120) - (1,120)----------------------- -------- -------- --------Net Current Assets 317 - 317----------------------- -------- -------- --------Non-Current Liabilities Contingent consideration (219) - (219)Other payables (1,623) - (1,623)----------------------- -------- -------- --------Total Non-Current Liabilities (1,842) - (1,842)----------------------- -------- -------- --------Total Liabilities (2,962) - (2,962)----------------------- -------- -------- --------Net Assets 2,217 47 2,264----------------------- -------- -------- -------- 10c. Consolidated balance sheet as at 30 September 2006 ----------------------- -------- -------- -------- UK GAAP Effect of IFRS £'000 Transition £'000 £'000 ----------------------- -------- -------- --------Non-Current Assets Goodwill 3,390 (493) 2,897Other intangible assets - 517 517Property, plant and equipment 252 - 252----------------------- -------- -------- --------Total Non-Current Assets 3,642 24 3,666----------------------- -------- -------- --------Current Assets Trade and other receivables 898 - 898Cash and short term deposits 284 - 284----------------------- -------- -------- --------Total Current Assets 1,182 - 1,182----------------------- -------- -------- --------Total Assets 4,824 24 4,848----------------------- -------- -------- --------Current Liabilities Trade and other payables (1,176) - (1,176) Current tax liabilities - - ------------------------ -------- -------- --------Total Current Liabilities (1,176) - (1,176)----------------------- -------- -------- --------Net Current Assets 6 - 6----------------------- -------- -------- --------Non-Current Liabilities Contingent consideration (225) - (225)Other payables (1,872) - (1,872)----------------------- -------- -------- --------Total Non-Current Liabilities (2,097) - (2,097)----------------------- -------- -------- --------Total Liabilities (3,273) - (3,273)----------------------- -------- -------- --------Net Assets 1,551 24 1,575----------------------- -------- -------- -------- 10d. Consolidated reconciliation of changes in equity 31 March 30 September 1 April 2007 2006 2006 £'000 £'000 £'000 ---------------------- -------- -------- --------Total adjustment to equity 47 24 -Total equity under UK GAAP 2,217 1,551 (1,097)---------------------- -------- -------- --------Total equity under IFRS 2,264 1,575 (1,097)---------------------- -------- -------- -------- 10e. Consolidated income statement for the six months ended 30 September 2006 UK GAAP Effect of IFRS transition £'000 £'000 £'000 ---------------------- -------- -------- --------Revenue 2,769 - 2,769---------------------- -------- -------- --------Direct operating expenses (2,322) - (2,322)Central operating overheads (282) - (282)Share based payment charge (30) - (30)Amortisation of intangible assets (34) 24 (10)---------------------- -------- -------- --------Total operating expenses (2,668) 24 (2,644)---------------------- -------- -------- --------Operating Profit 101 24 125Finance income - - -Finance costs - - ----------------------- -------- -------- --------Profit before Taxation 101 24 125Taxation (20) - (20)---------------------- -------- -------- --------Profit for the Period 81 24 105---------------------- -------- -------- --------Earnings per share (in pence) Basic 1.5 (0.1) 1.4Diluted 1.3 (0.1) 1.2---------------------- -------- -------- -------- The share based payment was not included in the six months ending 30 September2006. This has been included in the above as a restatement of that period. 10f. Consolidated income statement for the year ended 31 March 2007 UK GAAP Effect of IFRS transistion £'000 £'000 £'000 -------- -------- --------Revenue 5,810 - 5,810--------------------- -------- -------- --------Direct operating expenses (4,942) - (4,942)Central operating overheads (555) - (555)Share based payment charge (59) - (59)Amortisation of intangible assets (68) 47 (21)--------------------- -------- -------- --------Total operating expenses (5,624) 47 (5,577)--------------------- -------- -------- --------Operating Profit 186 47 233Finance income 2 - 2Finance costs (1) - (1)--------------------- -------- -------- --------Profit before Taxation 187 47 234Taxation (17) - (17)--------------------- -------- -------- --------Profit for the Period 170 47 217--------------------- -------- -------- --------Earnings per share (in pence) Basic 1.6 0.4 2.0Diluted 1.3 0.3 1.6--------------------- -------- -------- -------- This information is provided by RNS The company news service from the London Stock Exchange