23 Jun 2010 07:00
ILX Group plc
2009/10 Preliminary Results
ILX Group plc ('ILX' or the "Company"), the AIM quoted provider of e-learning software and business training, announces its unaudited preliminary results for the year ended 31 March 2010. The results are in line with market forecasts.
Highlights:
·; Revenue £14.7 million (2009: £15.6m)
·; Profit before tax and exceptional items* £1.1 million (2009: £1.7m)
·; Strong cash generation; Net debt reduced by £1.5 million
·; Dividend maintained @1.50p per share
·; Best Practice division increased revenues and operating margins
·; ILX now global market leader in PRINCE2®
·; International Division formed; overseas outlook positive
·; Significant annualised cost savings implemented
·; Adjusted diluted earnings per share* 3.75p (2009: 6.04p)
* Full details are included in the Chief Executive's Business Review
Ken Scott, Chief Executive of ILX Group plc, commented:
"A year ago it was clear to the Board that we faced some pressing challenges. The business was performing well but setagainst a difficult macro economic backdrop. The upturn in the UK still looks some time away but outside of the UK is a different matter as many areas around the world are more vibrant and are showing good signs of recovery.
In the year to 31 March, 2010, revenues attributable to the Group's e-learning software products accounted for 44% of revenues and 62% of gross profit. All of these revenues come from the Company's proprietary software products. It is clear that the Group's unique strength lies in this area and the development of software products and new technologies in e-Learning will provide the principal focus for growth going forward, allied to an increasing contribution from overseas sales.
Revenues across the Group for the current year to date are up 10% and overall, the outlook is one of steady improvement."
For further information, please contact:
| ILX Group plc | 020 7751 7100 |
| Ken Scott, Chief Executive |
|
| FinnCap | 020 7600 1658 |
| Marc Young - Corporate Finance Tom Jenkins - Corporate Broking
|
|
| Lothbury Financial Services Limited | 020 7868 2567 |
| Michael Padley / Libby Moss |
|
Editors' Note
ILX Group plc (www.ilxgroup.com) is a leading provider of vocational training to the private and public sectors, delivered through e-learning, and instructor-led courses/workshops, and trades through two divisions:
1. Best Practice provides e-learning software, instructor-led training and implementation consultancy principally in the programme and project management and IT service management markets.
2. Finance provides e-learning software, instructor-led training, workshops and related services, in the business finance and investment banking markets.
Chairman's Statement
I am pleased to present the results for the year ended 31 March 2010.
General Update
As I stated in the circular to shareholders dated 14 December 2009, the Group has grown substantially over the last few years, increasing turnover tenfold from £1.4 million for the year ended 31 March 2003 to £14.7 million for the year just ended. It has grown from a loss-making business to one making substantial profits, and has increased staff numbers from 20 to 91. This has been achieved through both acquisitive and organic growth, funded through bank debt, new share issues and deferred consideration for acquisitions.
More recently, the Group has gone through a period of consolidation during which the acquired businesses have fully integrated into two trading divisions. Our Best Practice division, which provides e-learning software and classroom training across various accredited subjects in project and service management, has developed into a highly profitable business with a reputation built around its expertise in e-learning technology, and with exciting opportunities opening up internationally. Our Financial Training division, particularly the CTG revenues with their substantial exposure to the training budgets within UK investment banks, has suffered but remained profitable, before exceptional items, and with a reduced cost base has potential to recover quickly as revenues grow.
Across both divisions, an increasing proportion of our revenues is derived from the sale of licences to e-learning software products, which are not only used stand-alone but also in conjunction with more traditional classroom events. It is clear that the Group's unique strength lies in this area and the development of software products and new technologies in this space will provide the principal focus for growth going forward.
Financial Results
Revenue for the year was £14.7 million (2009: £15.6 million), a decrease of 5.6%. Operating profit before exceptional items was £1.45 million (2009: £2.09 million) and underlying profit before taxation and exceptional items was £1.07 million (2009: £1.70 million), a fall of 37%. Accordingly, adjusted diluted earnings per share fell to 3.75p (2009: 6.04p).
Given the difficulties experienced by the Financial Training division it has been decided to write down the value of intangible assets acquired with the Group's purchase of the CTG business by £2.29 million.
Whilst the results show a fall in revenues and profitability from the previous year, they were in line with market expectations and represent a creditable result, given the difficulties experienced by the Finance Training division during the year. Furthermore, the Best Practice division has delivered exciting growth that gives the Board confidence for the future. These results are explained in fuller detail in the Finance Director's review.
Fundraising
In January this year we raised an additional £0.93 million after expenses from a placing of new shares. These funds were used to give the Group additional headroom as it repays its debt and to provide funds for the next stage of growth of the business. I would like to thank all existing and new shareholders who took part in the placing.
Dividend
Your Board is aware of the importance of maintaining an annual dividend but is also committed in the short term to reducing the Group's net debt. Accordingly, last year, we introduced a scrip dividend scheme under which shareholders were given the opportunity to elect to receive new shares in the Company instead of a cash dividend. Under this scheme a dividend of 1.50 pence per share was paid in respect of the year ended 31 March 2009, with elections to receive the scrip issue received representing 12.6% of the shareholder base.
We will continue this policy and will recommend a maintained dividend of 1.50 pence per share, subject to shareholders' approval at the Company's Annual General Meeting on 24 September 2010.
Outlook
We are still in a period of challenging economic conditions; nevertheless I believe that the quality of our products, our international opportunities, and the commitment of our people will allow us to take a significant step next year towards our ambitions to grow the business substantially over the next five year period. We have in place the team to achieve this by taking advantage of the opportunities available, particularly overseas, and by building on our technological lead.
Once again I would like to thank management and all staff. I would like to thank Best Practice staff for their contribution to an outstanding result for that division, and our Finance Training staff for their loyalty and commitment during what has been a difficult year. I would also like to thank those in the new International division who have been prepared to spend large amounts of time travelling and in some cases move abroad in order to develop the exciting opportunities we see emerging.
Paul Lever
Chairman
23 June 2010
Chief Executive's Report
A Technology Business
It is now almost eight years since I joined ILX Group and given all that has changed in this time, it seemed appropriate to step back and to look firstly at the progress the Group has made since that time and secondly to focus on the Group's strategy and the exciting developments that will define our future.
Back in July 2002 I joined an e-learning business. At that time the Company delivered turnover of £1.4 million compared with £14.7 million in the year just ended. That is a growth rate of 40% per annum or put another way, a doubling of turnover every 2 years. In this same period we went from serious losses to profitability and in the difficult year just ended, have made an adjusted pre-tax profit of £1.1 million. We have acquired six companies in this time and while they accounted for about half of the total expansion in revenues, the rest came from organic growth. Although some of the acquisitions were classroom training companies, in recent years it has become increasingly clear that the Group's core strength is re-emerging as its software and technology, due both to a general move away from classroom training and in particular to the technological lead that we have developed. It takes just a cursory look at our top line to see the evidence for this.
In the year to 31 March, 2010, revenues attributable to the Group's e-learning software products accounted for 44% of Group revenues (2009: 34%) and 62% of gross profit (2009: 49%). All of these revenues come from the Company's proprietary software products for which it completely owns the IPR.
In the past 3 years we have spent just over £1 million in the development of our software products in areas such as:
·; Greater use of software simulations and games within the product range;
·; Launch of additional products covering new subject areas including Financial Mathematics, Asset Management, ISO20000, Software Testing, and PRINCE2® Practitioner;
·; Launch of stand-alone game applications such as PRINCE2® Snakes and Ladders designed to help students revise for exams by playing games; and
·; Launch of iPhone and iPad compliant versions of the products
In the traditional training space, some of these developments have been viewed by some as attention-grabbing but you only have to look at the way our world is moving inexorably towards technology infused activities. Children and young adults already adopt this approach as their natural preferred way to learn. Results so far from these developments have been very encouraging with significant increases in market share.
In addition, the Group has also focused on the utilisation of technology within a more traditional "classroom" environment. This has taken place in the following key areas:
·; The use of software simulations and applications both in the classroom as well as before and after classroom events, thus adding to effectiveness; and
·; The development of technology allowing a workshop, including an exam, to be taken remotely with students accessing a combination of e-learning, live and recorded video feeds and interaction with the tutor and other students.
The recent launch of our PRINCE2®Live product, together with the ILX Group games now available from the Apple iPhone Apps Store, are a clear move away from the more conventional "CBT" or "e-learning" into simulations and game-based learning.
It is now the Group's stated strategy to place the development of new software learning applications and the expansion of software sales as the primary drivers for future growth. Over the next few years we expect our software licence revenues to continue to grow relative to overall revenues.
Strategy and Vision
A year ago it was clear to the Board that we faced some pressing challenges. Overall the business was performing well but set against a difficult macro economic backdrop, the Finance division was being severely challenged by the large fall in graduate recruitment in the investment banking community. At the same time, Best Practice had dramatically grown its PRINCE2® market share and today it is the global market leader in PRINCE2® training with a share of almost 12% in the worldwide market.
As the year progressed, the investment banks began to return to profit but without any real sign of an upturn in graduate recruitment. That upturn still looks some time away. However, the overriding macro issue which has emerged around Europe is the extent of European government debt. Specifically in the UK, the magnitude of this debt and the risk that the UK economy could continue to be flat or suffer a double dip recession has increasingly affected our thinking. We recognised that real local growth in such an environment can only come from market share gains and we are working hard to achieve this, particularly in the PRINCE2® market where we are so strong. Outside of the UK is a different matter as many areas around the world are more vibrant and are showing good signs of recovery. In addition, PRINCE2® itself is starting to show signs of accelerated growth internationally, particularly in areas such as Australia and New Zealand.
The strategy we have adopted is a recognition of both the challenges within the UK and the international opportunities that exist. We see the next period as an invitation to consolidate and increase our market share in the UK particularly across our Best Practice division, while at the same time using our market leadership in PRINCE2® to drive growth internationally.
Four months ago we officially established a division to realise our international ambitions, initially centred around PRINCE2®. International revenues were up by 30% year on year and at a time when the UK economy is set for austerity, we believe our focus on international expansion is both timely and appropriate. Martyn Kinch, who joined ILX Group over six years ago when his company was acquired, is now the executive leading our International division. ILX Group owns the domain www.PRINCE2.com and this website has over the years proved to be a very powerful receiver for in-bound intelligence about what is going on in different parts of the world with regard to PRINCE2® awareness and demand. It is on the back of such intelligence that we initially built market positions in various locations like Australia, South Africa, the Emirates and Holland without having any physical presence. Each geographic area has been identified measured by the traffic received on the www.PRINCE2.com website. Earlier this year and because the case became compelling, we have established a subsidiary company with a staffed office in Sydney, Australia to service the Australian and New Zealand markets. In addition we opened an office in Amsterdam as a base for the Benelux countries; both fast emerging areas for PRINCE2®.
Our approach in each location where we operate whether remotely or directly is to disrupt the local markets leveraging our technology to achieve a competitive advantage. ILX Group is still the only player in this market to deploy world-class e-learning software together with highly effective classroom training and successfully combine the two in a market that is dominated still by classroom training providers. This strategy is working well in all the locations in which we are active and in the next year, we expect our international expansion to accelerate. The Group's technological lead position in this market together with its actual market lead means it is very well placed to capitalise on the growing use of PRINCE2® globally.
Values
For some in business, any reference to values can be perceived as irrelevant at best or at worse, a sign that management has lost its way. Personally, I do not accept these views. I strongly believe that a team, which consciously adopts a set of guiding principles, will be inherently stronger and will perform better as a team than one which has no such foundation, particularly when the going gets tough.
The values the senior team unanimously adopted to act as our bedrock are Teamwork, Making a Difference, Ownership and Passion.
·; Teamwork because we recognise its importance and see the risks of acting alone with the consequential disruption this often causes.
·; Making a difference because we have all experienced environments where activity alone can easily become a substitute for real change.
·; Ownership in recognition that we and our people all have a responsibility to ensure goals are achieved and issues get dealt with effectively.
·; Passion is the word that describes our approach to getting things done.
These core principles are already proving their potency as we execute our strategy for growth.
Financial Results
As set out in more detail in the Finance Director's Review, the results for the year reflect a combination of an excellent year for the Best Practice division and a difficult, but nevertheless profitable, year for the Finance division.
Revenues for the year were £14.7 million (2009: £15.6 million), delivering a profit before tax and exceptional items of £1.07 million (2009: £1.70 million) and adjusted diluted earnings per share of 3.75p (2009: 6.04p). Cash generated from operations was £2.03 million (2009: £1.82 million); net debt at the year end was £3.16 million.
During the year, the Group raised £0.93 million after costs from an additional placing of shares. This had two purposes; to provide additional finance for growth and to help reduce the Group's level of debt.
The Group is committed to the payment of an annual dividend, which is offered with a scrip alternative in order to maintain a balance between maintaining the yield on the shares and allowing the Group to reduce net debt.
Markets and Risks
ILX Group operates across the globe and over a very wide range of industry sectors, covering a number of specific hard skill requirements for organisations. Over the last three years we have dealt with over 5,000 customers in almost 100 countries.
Our revenues by subject and by delivery method, for the year were as follows:
|
| Year ended 31.3.2010 | Year ended 31.3.2009 | ||||||
|
| e-learning | Other | Total |
| e-learning | Other | Total |
|
|
| £'000 | £'000 | £'000 | %age | £'000 | £'000 | £'000 | %age |
|
|
|
|
|
|
|
|
|
|
| PRINCE2 | 4,004 | 3,189 | 7,193 | 48.9% | 3,119 | 3,347 | 6,466 | 41.5% |
| Finance | 547 | 2,638 | 3,185 | 21.7% | 369 | 4,544 | 4,913 | 31.5% |
| ITIL & ISO20000 | 848 | 333 | 1,181 | 8.0% | 781 | 393 | 1,174 | 7.5% |
| MSP | 213 | 656 | 869 | 5.9% | 162 | 613 | 775 | 5.0% |
| APM | 388 | 279 | 667 | 4.5% | 212 | 185 | 397 | 2.5% |
| Microsoft | 100 | - | 100 | 0.7% | 163 | - | 163 | 1.0% |
| Software testing | 8 | - | 8 | 0.1% | - | - | - | 0.0% |
| Multi-subject portals | 318 | 533 | 851 | 5.8% | 286 | 540 | 826 | 5.3% |
| Other revenues | 47 | 602 | 649 | 4.4% | 177 | 691 | 868 | 5.6% |
|
| 6,473 | 8,230 | 14,703 | 100.0% | 5,269 | 10,313 | 15,582 | 100.0% |
|
| 44.0% | 56.0% | 100.0% |
| 33.8% | 66.2% | 100.0% |
|
Almost half of our revenues for the year derived from PRINCE2®. Our market leading position in this area gives us a strong competitive position particularly with our international expansion. Our aim is to exploit this position globally whilst at the same time building up our revenues in other subjects to similar levels.
It has been and remains our strategy to focus on hard-skills subjects where the knowledge or qualification is essential to the performance of the job or the contract, thus ensuring that demand for our products remains high even when training budgets are cut. In fact, we have often seen our revenues increase during times of economic hardship as our interactive e-learning software provides the ability to deliver the same result often at substantially reduced cost.
Our revenues by geographical area were as follows:
|
| Year ended 31.3.2010 | Year ended 31.3.2009 | ||
|
| £'000 | %age | £'000 | %age |
|
|
|
|
|
|
| UK & Ireland | 11,944 | 81.2% | 12,945 | 83.1% |
| Europe & Scandinavia | 1,205 | 8.2% | 1,272 | 8.2% |
| Americas | 435 | 3.0% | 517 | 3.3% |
| Australasia | 362 | 2.5% | 78 | 0.5% |
| Middle East | 341 | 2.3% | 219 | 1.4% |
| Africa | 310 | 2.1% | 305 | 2.0% |
| Asia | 106 | 0.7% | 246 | 1.6% |
|
| 14,703 | 100.0% | 15,582 | 100.0% |
With the establishment of the International division we expect revenues from areas outside the UK to expand substantially faster than UK revenues over the next few years. In the last year we have seen rapid growth in Australasia and with the establishment of our Sydney base we expect to see strong gains here in particular in the current year.
We have a very broad range of customers of all sizes and across many industries. The table below splits out our revenues attributable to some key sectors:
|
| Year ended 31.3.2010 | Year ended 31.3.2009 | ||
|
| £'000 | %age | £'000 | %age |
|
|
|
|
|
|
| Banks & Financial Services | 2,604 | 17.7% | 4,963 | 31.9% |
| UK Public Sector | 2,860 | 19.5% | 2,630 | 16.9% |
| Consumer | 2,258 | 15.4% | 2,119 | 13.6% |
| International Government Bodies | 795 | 5.4% | 470 | 3.0% |
| Other Sectors | 6,186 | 42.1% | 5,400 | 34.7% |
|
| 14,703 | 100.0% | 15,582 | 100.0% |
Our revenue from Banks & Financial services is worldwide but with a concentration of revenue with some of the larger investment banks with bases in London. This sector has been going through unprecedented difficulties although there are signs of recovery.
In the current economic climate a reduction in UK Government spending is clearly on its way. Whilst this accounts for almost 20% of revenues, these are spread widely over a very great number of individual customers and budgets - we are not heavily reliant on any single government department. In the last financial year the number of public sector customers spending more than £1,000 totalled almost 300. The largest customers were the Environment Agency (£250,000), and Home Office (£220,000), with the average spend being around £9,500 per government user.
Additionally, we have noticed that where cost cuts translate into job losses this provides a double impetus for training requirements; a re-skilling of those made redundant (whether on their own initiative or as part of a package) and a skilling up of those reduced numbers in the workforce of whom more is now expected.
So, while we do appreciate that there is a risk from a general reduction in UK Government spending, I hope I have also set out some of the key reasons for our belief that this could in fact present more opportunities than it does threats.
Our revenue from other sectors again covers a wide range of sectors from charities and universities through to large corporates in construction, manufacturing, telecoms, and professional services.
The Role of PRINCE2®
There appear to be some misconceptions around just what PRINCE2® is and what its role is in organisations.
PRINCE2® is the single most used project management approach in the world and PRINCE2® project managers and those working on projects must be qualified. Organisations like ILX Group provide the training to prepare individuals for the various qualifying examinations. Project management is the discipline of planning, organising and managing resources to bring about the successful completion of project goals - within the specified constraints of time, cost and quality.
Today project management is arguably the single most prevalent activity in organisations, whether in the private or public sector, a multinational company or a charity. The reason for this is simple; modern organisations operate in a fast-moving, often global business market where they face constant technological, legislative and competitive challenges. Projects are constantly being set up in order to address those various challenges in a controlled way.
PRINCE2® was originally developed in the late 1980's by the UK Government's Central Computer and Telecommunications Agency (CCTA) as a standard for IT project management. Soon, organisations were applying PRINCE to a much wider range of needs. In response, the UK Office of Government Commerce (OGC) released PRINCE2® in 1996 as a generic project management method. Much of the success of PRINCE2® is seeded in this early history. The original PRINCE model was robust enough to be applied to a range of needs, and PRINCE2® built upon those strengths. The backing of the UK Government was also important. As Government suppliers started using PRINCE2® to deliver public sector projects, the model spread to the private sector and became increasingly popular. In 2006, work commenced on updating PRINCE2® for the new millennium and "PRINCE2® 2009" was launched in mid-2009. PRINCE2® 2009 remains faithful to PRINCE2® core principles but makes the earlier model even more adaptable, simpler and easier to integrate with other OGC project management methods. PRINCE2® is now a de facto standard for project management in the UK, and is used in more than 50 other countries worldwide.
Organisations that have adopted PRINCE2® (and thereby require the training) see it as a requirement rather than an option. Our success in providing PRINCE2® training is based in its ability to offer a highly flexible approach to how the training is delivered. Our world-class software products together with our highly effective classroom training have given us a significant competitive advantage both in the UK and Internationally.
In addition, our e-learning can dramatically reduce the costs associated with training (both the actual cost of purchase and the cost of travel and time out of the office) whilst providing in many cases better results. PRINCE2® is itself all about controlling projects and therefore, in part, controlling costs. In the UK, as government and private organisations cut costs in training budgets, our e-learning offer gives ILX Group a massive competitive advantage.
Corporate Training Group (CTG)
CTG, which now makes up the larger share of our Finance division, was acquired in July 2006. For the first two years, while the newly formed Best Practice division was consolidating, it provided the lion's share of profit contribution to the Group.
From the beginning of 2009, the disruptions within the global investment banking industry began to affect the CTG business as training budgets were squeezed with a consequent impact on both revenues and margins. In the year just ended, revenues were just £2.8 million, a fall of 40% from the previous year. However, significant costs were also removed from the business in the second half of the year, which included the departure of Peter Evans together with a number of the senior CTG team. Peter was a main board member and the founder of CTG.
Even though the investment banking community is returning to large profits, the recruitment of graduates remains depressed. In the wider context of the Group, Best Practice activities (both UK and international) are the dominant providers of both revenue and profit contribution.
In this context, however, we have taken the decision to write down the value of intangibles acquired with CTG by £2.29 million. We will continue to need time and space to return CTG to healthy profits, and depending on the outcomes for the current year we may need to make further write-downs in the future.
People
ILX Group now employs just over 90 people and I would like to thank them all for their commitment and sheer determination to succeed, particularly in these difficult times.
The management team within ILX Group is very strong and very committed. We work well as a team and it is the strength of this team that forms the foundation upon which we have been able to build the business.
Eddie Kilkelly, Chief Operating Officer is responsible for our business operations across the UK. This includes Best Practice and Finance divisions. Eddie joined ILX Group from Parity Training in 2005 and has been the key change agent in leading Best Practice division to become the great performance vehicle it is today.
Martyn Kinch, Vice President, International division has been with ILX Group since he sold Key Skills to the Company in 2004. He is now taking our Best Practice lead and growing our market share internationally.
David Willis is our Chief Technical Officer, responsible for both the development of our technology platforms and for their upkeep. David has been with the Company since 1990, when he joined after graduating with a degree in electronic engineering.
I would like to thank all our staff for their hard work and determination in what has been a challenging but successful year.
Ken Scott
Chief Executive
23 June 2010
Consolidated Statement of Comprehensive Income
For the Year ended 31 March 2010
|
|
| Year ended 31.3.2010 |
| Year ended 31.3.2009 | ||||
|
|
| Underlying | Exceptional | Total |
| Underlying | Exceptional | Total |
|
| Notes | £'000 | £'000 | £'000 |
| £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
| Revenue | 3 | 14,703 | - | 14,703 |
| 15,582 | - | 15,582 |
| Cost of sales |
| (7,827) | - | (7,827) |
| (7,954) | - | (7,954) |
| Gross profit |
| 6,876 | - | 6,876 |
| 7,628 | - | 7,628 |
| Administrative and distribution expenses |
| (5,310) | (359) | (5,669) |
| (5,408) | (176) | (5,584) |
| Earnings before interest, tax and depreciation |
| 1,566 | (359) | 1,207 |
| 2,220 | (176) | 2,044 |
| Depreciation |
| (114) | - | (114) |
| (127) | - | (127) |
| Impairment |
| - | (2,290) | (2,290) |
| - | (2,360) | (2,360) |
| Operating profit / (loss) |
| 1,452 | (2,649) | (1,197) |
| 2,093 | (2,536) | (443) |
| Finance income |
| 1 | - | 1 |
| 16 | - | 16 |
| Finance costs |
| (385) | 85 | (300) |
| (409) | (170) | (579) |
| Profit / (loss) before tax |
| 1,068 | (2,564) | (1,496) |
| 1,700 | (2,706) | (1,006) |
|
|
|
|
|
|
|
|
|
|
| Tax expense |
|
|
| (224) |
|
|
| (420) |
| Loss for the year attributable to equity shareholders |
|
|
| (1,720) |
|
|
| (1,426) |
| Other comprehensive income |
|
|
| - |
|
|
| - |
| Total comprehensive income |
|
|
| (1,720) |
|
|
| (1,426) |
| Earnings / (loss) per share: |
|
|
|
|
|
|
|
|
| Basic | 5 |
|
| (8.45p) |
|
|
| (7.35p) |
| Diluted | 5 |
|
| (8.35p) |
|
|
| (6.97p) |
Consolidated Statement of Financial Position
As at 31 March 2010
|
| As at 31.3.2010 | As at 31.3.2009 |
|
| £'000 | £'000 |
| Assets |
|
|
| Non-current assets |
|
|
| Property, plant and equipment | 135 | 184 |
| Intangible assets | 19,496 | 21,006 |
| Total non-current assets | 19,631 | 21,190 |
|
|
|
|
| Current assets |
|
|
| Trade and other receivables | 2,916 | 3,191 |
| Cash and cash equivalents | 838 | 96 |
| Total current assets | 3,754 | 3,287 |
| Total assets | 23,385 | 24,477 |
|
|
|
|
| Current liabilities |
|
|
| Trade and other payables | (3,044) | (2,778) |
| Contingent consideration | (35) | - |
| Tax liabilities | (1,077) | (946) |
| Bank loans and overdrafts | (1,757) | (1,287) |
| Total current liabilities | (5,913) | (5,011) |
| Non-current liabilities |
|
|
| Derivative financial instruments | (125) | (210) |
| Contingent consideration | (300) | - |
| Bank loans | (2,243) | (3,500) |
| Total non-current liabilities | (2,668) | (3,710) |
| Total liabilities | (8,581) | (8,721) |
| Net assets | 14,804 | 15,756 |
| Equity |
|
|
| Issued share capital | 2,357 | 1,939 |
| Share premium | 12,341 | 11,802 |
| Own shares in trust | (1,852) | (1,825) |
| Share option reserve | 204 | 115 |
| Buyback reserve | - | 1,178 |
| Retained earnings | 1,754 | 2,547 |
| Total equity | 14,804 | 15,756 |
Consolidated Cash Flow Statement
For the year ended 31 March 2010
|
| Year ended 31.3.2010 | Year ended 31.3.2009 |
|
| £'000 | £'000 |
|
|
|
|
| Loss from operations | (1,197) | (443) |
| Adjustments for: |
|
|
| Depreciation | 114 | 127 |
| Impairment | 2,290 | 2,360 |
| Share option charge | 101 | 59 |
| Movement in trade and other receivables | 291 | 238 |
| Movement in trade and other payables | 429 | (522) |
| Cash generated from operating activities | 2,028 | 1,819 |
|
|
|
|
| Tax paid | (274) | (14) |
| Net cash generated from operating activities | 1,754 | 1,805 |
|
|
|
|
| Investing activities |
|
|
| Interest received | 1 | 16 |
| Proceeds on disposal of property and equipment | 1 | - |
| Purchases of property and equipment | (66) | (105) |
| Expenditure on product development | (441) | (230) |
| Acquisition of subsidiaries (net of cash acquired) | (4) | (2,518) |
| Net cash used by investing activities | (509) | (2,837) |
|
|
|
|
| Financing activities |
|
|
| (Decrease) / increase in borrowings | (667) | 192 |
| Net proceeds of share issue | 930 | (2) |
| Interest and refinancing costs paid | (383) | (388) |
| Dividend paid | (263) | (263) |
| Net cash from financing activities | (383) | (461) |
| Net change in cash and cash equivalents | 862 | (1,493) |
|
|
|
|
| Cash and cash equivalents at start of year | (499) | 994 |
| Cash and cash equivalents at end of year | 363 | (499) |
|
|
|
|
| Cash and cash equivalents represented by: |
|
|
| Bank overdraft | (475) | (595) |
| Cash at bank | 838 | 96 |
|
| 363 | (499) |
Notes
1 Results
The financial information set out in this unaudited preliminary announcement does not constitute the statutory financial statements for the years ended 31 March 2010 or 2009 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the registrar of companies, and those for 2010 will be delivered in due course. The auditors have reported on the accounts for 2009; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The auditors have not yet reported on the accounts for 2010.
2 Accounting policies
The prinicipal accounting policies of the Group are set out in the Group's 2009 Annual Report and Financial Statements. The policies have remained unchanged for the year ended 31 March 2010.
3 Segment reporting
In accordance with IFRS8, the Group now presents its segmental analysis in terms of its two operating divisions, Best Practice and Finance, as opposed to one segment of supply of training and consultancy solutions. The analysis of revenue and profit by division for the period, and restated for prior periods, is as follows:
|
| Year ended 31.3.2010 |
| Year ended 31.3.2009 | ||
|
| Revenue | Profit |
| Revenue | Profit |
|
| £'000 | £'000 |
| £'000 | £'000 |
|
|
|
|
|
|
|
| Best Practice division | 11,375 | 2,020 |
| 10,417 | 1,390 |
| Finance division | 3,328 | 442 |
| 5,165 | 1,656 |
| Unrecharged central costs | - | (1,010) |
| - | (953) |
| Continuing operations | 14,703 | 1,452 |
| 15,582 | 2,093 |
| Interest |
| (384) |
|
| (393) |
| Underlying Profit Before Tax |
| 1,068 |
|
| 1,700 |
| Exceptional items |
| (2,564) |
|
| (2,706) |
| Taxation |
| (224) |
|
| (420) |
| Retained Loss |
| (1,720) |
|
| (1,426) |
Exceptional items include an impairment charge of £2,290,000 relating to acquired customer relationships belonging to the Finance division (2009: £2,360,000 related to goodwill belonging to the Best Practice division).
In addition, revenues by geographic region were as follows:
|
| Year ended 31.3.2010 | Year ended 31.3.2009 | ||
|
| £'000 | %age | £'000 | %age |
|
|
|
|
|
|
| UK & Ireland | 11,944 | 81.2% | 12,945 | 83.1% |
| Europe & Scandinavia | 1,205 | 8.2% | 1,272 | 8.2% |
| Americas | 435 | 3.0% | 517 | 3.3% |
| Australasia | 362 | 2.5% | 78 | 0.5% |
| Middle East | 341 | 2.3% | 219 | 1.4% |
| Africa | 310 | 2.1% | 305 | 2.0% |
| Asia | 106 | 0.7% | 246 | 1.6% |
|
| 14,703 | 100.0% | 15,582 | 100.0% |
4 Exceptional items
The Group presents as exceptional items those material items of income and expenses which, because of the nature or the expected infrequency of the events giving rise to them, merit separate presentation. This allows a better understanding of trading performance both for the year and the prior period. These items are highlighted on the face of the consolidated statement of comprehensive income and detailed in the notes to the financial statements.
During the year the Group incurred exceptional items as follows:
|
| Year ended 31.3.2010 | Year ended 31.3.2009 |
|
| £'000 | £'000 |
| Included within administrative expenses |
|
|
| Restructuring costs | 356 | - |
| Exceptional bad debt provisions | - | 176 |
| Loss on disposal of fixed assets | 3 | - |
|
| 359 | 176 |
| Included within operating profit |
|
|
| Impairment of intangibles | 2,290 | 2,360 |
| Included within interest payable |
|
|
| Financing costs | (85) | 170 |
The financing costs relate to the revaluation of the Group's interest rate swap agreement.
5 Earnings / (loss) per share
Earnings / (loss) per share is calculated by dividing profit attributable to shareholders by the weighted average number of shares in issue during the year.
Diluted earnings per share is adjusted for outstanding share options and the average option price, using an average interest saving of 8.0% (2009: 8.0%).
To allow shareholders to gain a better understanding of the underlying trading performance of the Group, an adjusted earnings per share and adjusted diluted earnings per share has been calculated using an adjusted profit after taxation before post-taxation non-recurring costs.
|
| Year ended 31.3.2010 | Year ended 31.3.2009 |
|
| £'000 | £'000 |
| Post tax profit / (loss) for the period | (1,720) | (1,426) |
| After tax interest on outstanding options multiplied by exercise price | 2 | 6 |
| Profit / (loss) for diluted earnings per share | (1,718) | (1,420) |
|
|
|
|
|
| £'000 | £'000 |
| Post tax profit/(loss) for the period | (1,720) | (1,426) |
| Add back actual tax charge | 224 | 420 |
| Strip out exceptional items | 2,564 | 2,706 |
| Normalised tax charge | (299) | (476) |
| Profit for adjusted earnings per share | 769 | 1,224 |
|
| £'000 | £'000 |
| Profit for adjusted earnings per share | 769 | 1,224 |
| After tax interest on outstanding options multiplied by exercise price | 2 | 6 |
| Profit for adjusted diluted earnings per share | 771 | 1,230 |
|
|
|
|
|
| Number | Number |
|
|
|
|
| Weighted average shares | 20,360,949 | 19,390,762 |
| Outstanding share options | 211,500 | 972,750 |
| Weighted average shares for diluted earnings per share | 20,572,449 | 20,363,512 |
|
|
|
|
| Basic earnings per share | (8.45p) | (7.35p) |
| Diluted earnings per share | (8.35p) | (6.97p) |
| Adjusted earnings per share | 3.78p | 6.31p |
| Adjusted diluted earnings per share | 3.75p | 6.04p |
|
|
|
|
6 Dividend
A final dividend of 1.50 pence per share in respect of the year ended 31 March 2009 was paid on 30 October 2009. This dividend is reflected in these financial statements. A scrip alternative was offered and 12.6% of the ordinary shareholders elected to receive the scrip alternative.
As stated in the Directors' report, the directors recommend payment of a dividend of 1.50 pence per share, subject to shareholder approval at the Annual General Meeting on 24 September 2010. A scrip alternative will be offered. These financial statements do not reflect this dividend payable, which will be accounted for in the statement of changes in equity as an appropriation of retained earnings, in the year ending 31 March 2011.
7 Annual Report
The annual report will be sent to shareholders in due course and will also be available from the Company's website www.ilxgroup.com and from the Company's registered office at 1 London Wall, London EC2Y 5AB.