Volvere Regulatory News (VLE)

RNS Number : 2226T

Volvere PLC

24 September 2010

 

 

 

Press Release

24 September 2010

 

 

 

Volvere plc

 

("Volvere" or the "Group")

 

Interim Results for the six months ended 30 June 2010

 

Volvere plc (AIM:VLE) the turnaround investment company, announces its Interim Results for the six months ended 30 June 2010.

 

Highlights

 

·;	Interactive Prospect Targeting significantly outperformed the Board's expectations with revenue and operating profit for the period of £4.27 million and £0.63 million respectively (3 July 2009*: £5.19 million and £1.02 million, Year ended 31 December 2009 £10.40 million and £1.69 million)
·;	Group net assets: £18.43 million (3 July 2009*: £18.36 million, 31 December 2009: £18.23 million)
·;	Cash and marketable securities: £20.77 million (3 July 2009*: £21.09 million, 31 December 2009: £20.44 million)
·;	Consolidated net assets per share of £3.26 (3 July 2009*: £3.23, 31 December 2009: £3.19)
·;	Further consideration agreed from sale of Sira Certification: £0.13 million (disposed of on 3 July 2009) bringing total consideration to date of £8.25 million
·;	Group revenue from continuing businesses: £4.58 million (3 July 2009*: £5.41 million, Year ended 31 December 2009: £10.89 million)
·;	Group profit for the period from continuing businesses: £0.12 million (3 July 2009*: loss £0.45 million, Year ended 31 December 2009: £0.40 million)
·;	Continued rigorous approach in considering acquisition opportunities

 

Note:

* results to 3 July 2009 have been restated in line with the full year results for 2009 to reflect the classification of certain equity as debt (see note 1 to the interim report)

 

 

For further information:

Volvere plc
Jonathan Lander, CEO	Tel: +44 (0) 20 7634 9707
	www.volvere.co.uk

 

Arbuthnot Securities Limited, Nomad and Broker
Nick Tulloch / Ed Gay	Tel: +44 (0) 20 7012 2000
	www.arbuthnot.co.uk

 

Media enquiries:

Abchurch
Henry Harrison-Topham / Mark Dixon	Tel: +44 (0) 20 7398 7702
henry.ht@abchurch-group.com	www.abchurch-group.com

 

Chairman's Statement

 

The results for the six months ending 30 June 2010 continue to reflect the Group's strong financial position with approximately £20 million of funds available for investment.

 

There is clearly economic uncertainty ahead but also many turnaround acquisition opportunities which are being investigated by our strong and experienced team.

 

In the absence of any unforeseen circumstances, the Board's current expectations are for further growth in the periods ahead.

 

Lord Kalms

Chairman

 

24 September 2010

 

Chief Executive's Statement

 

The first half of 2010 has been a period of good performance for the Group overall. I am pleased with the trading in our two trading businesses and our increased financial strength. Volvere received further dividends from Interactive Prospect Targeting Limited ("IPT") of £0.35 million and additional consideration of £0.13 million from the buyer of Sira Certification (bringing total consideration received to date to £8.25 million). Net assets were slightly higher despite dividend payments to the non-Volvere shareholders in IPT and the rise in our share price which requires us to take a non-cash charge to reflect the increase in value of the Incentive Shares.

 

Online marketing and data services

 

IPT, our online marketing and data services company, which is 45.5% owned by Volvere, continues to be the Group's largest business. For the first half of 2010, revenue and operating profit were £4.27 million and £0.63 million respectively (H1 2009: £5.19 million and £1.02 million). The business has significantly outperformed the Board's expectations at the beginning of this year, with particularly strong trading in our list rental division. Measures to reduce client and supplier dependency are also beginning to bear fruit, increasing our ability to forecast medium-term performance. Profit was broadly in line with the second half of 2009, although lower than the same period last year, which, given the uncertain economic climate, is a creditable performance.

 

IPT's continued strong cash generation was such that a further dividend of £0.77 million was declared and paid in June 2010, of which £0.42 million was paid to non-controlling shareholders and the balance to Volvere. This brings the total cash received by Volvere from IPT since acquisition in September 2008 to £2.4 million, which represents £1.0 million more than Volvere's original investment cost of £1.4 million.

 

Security solutions

 

The security solutions business continued to make steady progress. Revenue for the period was £0.3 million and pre-tax profit was £0.05 million, representing a modest improvement compared with the first half of 2009 and that year as a whole. Since the end of the half year we have seen an uncertain picture in terms of public sector spending. Although much of the company's work is security-related, government spending cuts are undoubtedly affecting the quantum and timing of investment. However, the company has secured some alternative revenue streams and continues to make progress in expanding the user base of SiraView, the digital CCTV-viewer.

 

Further information is set out in the financial review and in note 2, segmental information.

 

Cash and investments

 

At the period end, the Group had cash of £9.95 million and a total of £9.92 million (at cost) invested in available for sale investments, with a valuation of £10.81 million. Since the period end the Group's investment portfolio has performed extremely well.

 

The financial performance of each of the Group's businesses and its investments is set out in detail in the financial review below.

 

Acquisitions and future strategy

 

The current environment remains attractive for the Group. Much of our activity since May has been spent on reviewing an ever-increasing quantity of deal flow. However, most of the business opportunities that are currently in distress are in that position because of economic factors that are beyond their (and our) control. The Board is rigorous in its approach in only considering investment candidates where we can add significant value, whether or not there is an economic recovery. Volvere's track record is based on the careful selection and management of such targets.

 

 

 

 

Jonathan Lander

Chief Executive

 

24 September 2010

 

Financial Review

 

This financial review covers the Group's performance during the period ended 30 June 2010. It should be read in conjunction with the Chairman's and Chief Executive's Statements. In order to assist with comparability, the Group has restated the 2009 interim results to reflect the 2009 year end treatment as debt of the convertible A and B shares (the "Incentive Shares"), which were previously treated as equity. Further explanation is set out in note 3 to the interim results.

 

Revenue and operating performance

 

Detailed information about the Group's segments is set out in note 2 to these interim results and should be read in conjunction with this financial review.

 

Online marketing and data services

 

Following the disposal in 2009 of the Group's certification activities, the Group's principal trading subsidiary is IPT, which forms the online marketing and data services segment. During the period IPT's like-for-like revenue fell by 18% from £5.19 million to £4.27 million following a reduction in customer activity. This reduction impacted profitability, which fell from £1.02 million for the period to 3 July 2009 to £0.63 million for the first half of 2010. However, this period's performance is broadly in line with the second half of 2009.

 

During the period share options in IPT were exercised following the achievement of certain performance conditions. Following that, the Group's interest was diluted to approximately 45.5%, though IPT continues to be consolidated as a subsidiary on the grounds that the Group has the power to control it.

 

Dividends paid by IPT in the period were £0.77 million, of which non-controlling interests received £0.42 million and Volvere £0.35 million. Volvere had originally invested £1.4 million in IPT in 2008. Total dividends received since then have been £1.2 million, which along with shareholder loan repayments of £1.2 million, brings total cash received to £2.4 million, representing a surplus of £1.0 million over the original investment.

 

Security solutions

 

Security solutions revenue increased by 49% to £0.29 million for the period (3 July 2009: £0.19 million; 31 December 2009: £0.37 million) reflecting the completion of client development projects. The increased activity impacted positively on profitability, with a profit before tax of £52,000 being achieved (3 July 2009: loss £9,000; 31 December 2009: loss £42,000).

 

Statement of financial position

 

Cash and cash equivalents

 

Cash at the period end was £9.95 million (3 July 2009: £19.62 million, 31 December 2009: £8.84 million). The reduction compared to July 2009 was a result of the investments made in available for sale investments as part of treasury management.

 

Available for sale investments

 

At the period end the Group had available for sale investments with a market value of £10.81 million; the base cost of these investments was £9.92 million. The investments are in a mixture of non-investment grade bank fixed income securities as well as other investment grade corporate bond and asset-backed securities funds of mainly UK and US issuers (see note 8, events after the date of the statement of financial position).

 

Certain of the investments are denominated in US dollars (base cost $4 million, valuation $4.17 million) and the Group has entered into a foreign exchange contract for the sale of $4 million in October 2010. The difference between the foreign exchange contract rate and the spot rate has resulted in a charge to the income statement of £143,000 in the period.

 

Other financial liabilities

 

As noted above, the 2009 interim results have been restated to reflect the 2009 year end treatment of the certain of the Company's share capital as debt. This is explained below.

 

The Incentive Shares at the period end were capable of being converted into 476,000 Ordinary shares (3 July 2009: 414,000, 31 December 2009: 425,000). The Incentive Shares can only be converted into Ordinary shares and have no cash alternative. However, because the Incentive Shares convert into a variable (rather than fixed) number of Ordinary shares, they have been classified as liabilities rather than equity in accordance with International Accounting Standard 32 ("IAS 32"). This has had the effect of reducing net assets by approximately £1.38 million (3 July 2009 restated: £1.02 million, 31 December 2009: £1.07 million). The A and B shares were not classified as liabilities in years prior to 2009 as their fair value at that time was insignificant. There is no requirement to pay cash upon exercise of the Incentive Shares and, if and when the Incentive Shares are converted (whether in whole or in part) into Ordinary shares, there will be, ceteris paribus, a reduction in current liabilities.

 

Earnings per share and share capital

 

The basic and diluted loss per ordinary share was (1.74) pence (3 July 2009 restated: earnings 104.67 pence, 31 December 2009: earnings 113.57 pence).

 

During the period the Group purchased 50,000 of its Ordinary £0.0000001 shares, which were subsequently held in treasury, for a total consideration including costs of £139,000, representing an average price per share of 278.6 pence.

 

Hedging

 

It is not the Group's policy to enter into derivative instruments to hedge interest rate risk.

 

Risk factors

 

The Company and Group face a number of specific business risks that could affect the Company's or Group's success. The Company invests in distressed businesses and securities, which by their nature, often carry a higher degree of risk than those that are not distressed. The Group's businesses are principally engaged in the provision of services that are dependent on the continued employment of the Group's employees and availability of suitable profitable workload. In addition, the online marketing and data services segment is particularly heavily dependent on IT systems and infrastructure, the unavailability of which could impact the Group materially.

 

Key performance indicators

 

The Group uses key performance indicators suitable for the nature and size of the Group's businesses. This is primarily monthly reports of profitability, levels of working capital and workload. Order intake and chargeable staff utilisation is monitored weekly and reported monthly in respect of the security solutions segment. In the online marketing and data services segment, the Group monitors traffic statistics both in terms of yield and cost as well as overall profitability. The segmental analysis in note 2 to this interim report summarises the performance of each segment.

 

Corporate governance

 

The Board gives careful consideration to the principles of corporate governance as set out in the Combined Code on Corporate Governance issued by the Financial Reporting Council in June 2006 (the "Revised Combined Code"). However, the Company is relatively small and it is the opinion of the Directors that not all the provisions of the Revised Combined Code are relevant or desirable for a company of Volvere's size.

 

The Company has established an Audit Committee and a Remuneration Committee with formal terms of reference and which comprise the Chairman and Non-Executive Directors. The Board meets regularly and has ultimate responsibility for the management of the Company.

 

Dividends

 

In accordance with the policy set out in the prospectus on admission to AIM, the Board does not currently intend to recommend payment of a dividend and prefers to retain profits as they arise for investment in future opportunities.

 

 

 

Nick Lander

Chief Financial & Operating Officer

 

24 September 2010

 

Consolidated income statement

 

	Note	6 months to 30 June 2010	Restated Period to 3 July 2009	Year ended 31 December 2009
		£'000	£'000	£'000
Continuing operations
Revenue		4,581	5,410	10,890
Cost of sales		(1,356)	(1,820)	(3,761)
Gross profit		3,225	3,590	7,129
Administrative expenses		(3,248)	(3,152)	(6,549)
Operating (loss)/profit		(23)	438	580
Investment revenues		350	-	299
Other gains and losses		104	108	591
Finance expense	3	(307)	(977)	(1,030)
Finance income		21	43	85
Profit/(loss) before tax		145	(388)	525
Tax		(26)	(63)	(128)
Profit/(loss) for the period from continuing operations		119	(451)	397
Discontinued operations
Profit for the period from discontinued operations	4	100	6,859	6,862
Profit for the period		219	6,408	7,259
Attributable to:
- Equity holders of the parent		(99)	5,940	6,459
- Non-controlling interests	7	318	468	800
		219	6,408	7,259
(Loss)/earnings per share	5
Continuing operations
- Basic (pence)		(3.49)p	(16.19)p	(7.08)p
- Diluted (pence)		(3.49)p	(16.19)p	(7.08)p
Discontinued operations
- Basic (pence)		1.75p	120.86p	120.65p
- Diluted (pence)		1.75p	120.86p	120.65p
Total
- Basic (pence)		(1.74)p	104.67p	113.57p
- Diluted (pence)		(1.74)p	104.67p	113.57p

 

 

Consolidated statement of comprehensive income

 

		6 months to 30 June 2010	Restated Period to 3 July 2009	Year ended 31 December 2009
		£'000	£'000	£'000
Profit for the period		219	6,408	7,259
Other comprehensive income
Available-for-sale investments
- current period gains		675	465	351
- reclassification to profit		(138)	(97)	(97)
Other comprehensive income, net of tax		537	368	254
Total comprehensive income for the period		756	6,776	7,513
Attributable to:
Equity holders of the parent		438	6,308	6,713
Non-controlling interests		318	468	800
		756	6,776	7,513

Consolidated statement of changes in equity

 

	Share capital £'000	Share premium £'000	Revaluation reserve £'000	Share option reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interest £'000	Total £'000
Changes in equity
Revaluation of available for sale investments and total income recognised directly in equity	-	-	537	-	-	537	-	537
Profit for the period	-	-	-	-	(99)	(99)	318	219
Total comprehensive income for the period	-	-	537	-	(99)	438	318	756
Balance at 1 January 2010	-	3,635	351	90	13,693	17,769	463	18,232
Equity share options cancelled	-	-	-	(90)	90	-	-	-
Treasury share purchases	-	-	-	-	(139)	(139)	-	(139)
Change in non-controlling share	-	-	-	-	(81)	(81)	81	-
Dividends paid by subsidiaries	-	-	-	-	-	-	(420)	(420)
Balance at 30 June 2010	-	3,635	888	-	13,464	17,987	442	18,429

 

	Share capital £'000	Share premium £'000	Revaluation reserve £'000	Share option reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interest £'000	Total £'000
Changes in equity (restated)
Revaluation of available for sale investments and total income recognised directly in equity	-	-	368	-	-	368	-	368
Profit for the period	-	-	-	-	5,940	5,940	468	6,408
Total comprehensive income for the period	-	-	368	-	5,940	6,308	468	6,776
Balance at 1 January 2009	50	3,586	97	16	7,218	10,967	670	11,637
Shares reclassified as financial liabilities	(50)	-	-	-	-	(50)	-	(50)
Balance at 3 July 2009	-	3,586	465	16	13,158	17,225	1,138	18,363

 

	Share capital £'000	Share premium £'000	Revaluation reserve £'000	Share option reserve £'000	Retained earnings £'000	Total £'000	Non-controlling interest £'000	Total £'000
Changes in equity
Revaluation of available for sale investments and total income recognised directly in equity	-	-	254	-	-	254	-	254
Profit for the year	-	-	-	-	6,459	6,459	800	7,259
Total comprehensive income for the year	-	-	254	-	6,459	6,713	800	7,513
Balance at 1 January 2009	50	3,586	97	16	7,218	10,967	670	11,637
Equity shares issued	-	49	-	-	-	49	-	49
Shares reclassified as financial liabilities	(50)	-	-	-	-	(50)	-	(50)
Equity share options cancelled	-	-	-	(16)	16	-	-	-
Share based payments charge	-	-	-	90	-	90	-	90
Reduction in non-controlling share	-	-	-	-	-	-	(157)	(157)
Dividends paid by subsidiaries	-	-	-	-	-	-	(850)	(850)
Balance at 31 December 2009	-	3,635	351	90	13,693	17,769	463	18,232

 

Consolidated statement of financial position

 

		30 June  2010	Restated 3 July 2009	31 December 2009
	Note	£'000	£'000	£'000
Assets
Non-current assets
Goodwill	6	305	456	305
Property, plant & equipment		276	361	331
Deferred tax asset		-	-	52
Total non-current assets		581	817	688
Current assets
Trade and other receivables		1,366	1,787	1,566
Cash and cash equivalents		9,954	19,620	8,837
Available for sale investments		10,815	1,470	11,601
Total current assets		22,135	22,877	22,004
Total assets		22,716	23,694	22,692
Liabilities
Current liabilities
Trade and other payables		(2,751)	(4,214)	(3,204)
Taxation		(155)	(67)	(183)
Other financial liabilities	3	(1,381)	(1,025)	(1,073)
Total current liabilities		(4,287)	(5,306)	(4,460)
Non-current liabilities
Financial liabilities		-	(25)	-
Total non-current liabilities		-	(25)	-
Total liabilities		(4,287)	(5,331)	(4,460)
TOTAL NET ASSETS		18,429	18,363	18,232
Equity
Share capital		-	-	-
Share premium account		3,635	3,586	3,635
Revaluation reserve		888	465	351
Share option reserve		-	16	90
Retained earnings		13,464	13,158	13,693
Capital and reserves attributable to equity holders of the Company		17,987	17,225	17,769
Non-controlling interests	7	442	1,138	463
TOTAL EQUITY		18,429	18,363	18,232

 

Consolidated statement of cash flows

 

		6 months to 30 June 2010	6 months to 30 June 2010	Restated Period to 3 July 2009	Restated Period to 3 July 2009	Year ended 31 December 2009	Year ended 31 December 2009
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Profit for the period			219		6,408		7,259
Adjustments for:
Investment revenues		(350)		-		(299)
Other gains and losses		(104)		(108)		(591)
Finance expense	3	307		977		1,030
Finance income		(21)		(43)		(85)
Gain arising on disposal of discontinued operations		(100)		(6,859)		(6,379)
Income tax expense		26		63		128
Depreciation (continuing operations)		110		120		250
Realisation of negative goodwill (continuing operations)		-		-		(67)
Depreciation (discontinued operations)		-				41
Amortisation (discontinued operations)		-		-		120
Foreign exchange revaluation loss/(gain)		143		-		(23)
Share based payment expenses		-		-		90
			11		(5,850)		(5,785)
Operating cash flows before movements in working capital			230		558		1,474
Decrease in trade and other receivables			67		268		745
Increase/(decrease) in trade and other payables			(365)		298		260
Cash (used in)/generated by operations			(68)		1,124		2,479
Interest paid			-		(2)		(11)
Net cash from operating activities			(68)		1,122		2,468
Investing activities
Purchase of additional shares in subsidiary		(2)		-		(82)
Amounts received in respect of prior acquisition		-		56		85
Disposal of subsidiary, net of costs of disposal and cash disposed		-		8,000		6,252
Shares issued to non-controlling interests		40		-		-
Purchase of available for sale investments		-		(1,005)		(18,902)
Income from available for sale investments		507		-		106
Disposal of available for sale investments		1,246		9,508		17,831
Proceeds on disposal of property, plant and equipment		-		-		5
Purchases of property, plant and equipment		(55)		(200)		(306)
Purchase of own shares		(139)		-		-
Interest received		21		43		86
Net cash generated from investing activities			1,618		16,402		5,075
Financing activities
Issue of share capital		-		-		48
Repayment of borrowings		(13)		(903)		(903)
Dividend paid		(420)		-		(850)
Net cash used in financing activities			(433)		(903)		(1,705)
Net increase in cash and cash equivalents			1,117		16,621		5,838
Cash and cash equivalents at beginning of period			8,837		2,999		2,999
Cash and cash equivalents at end of period			9,954		19,620		8,837

 

Volvere plc

 

Notes forming part of the unaudited interim results for the period ended 30 June 2010

 

1 Financial information

 

The financial information for the period ended 30 June 2010 and the comparative figures for the period ended 3 July 2009 have not been reviewed or audited by the Group's auditors and have been prepared on the basis of the accounting policies adopted by the Group under IFRS. The same accounting policies and methods of computation are followed in the interim financial report as published by the company on 12 May 2010 in its annual financial statements, which are available on the Company's website at www.volvere.co.uk.

 

The comparative figures for the year ended 31 December 2009 have been prepared under IFRS. They do not constitute statutory accounts as defined by the Companies Act 2006. The accounts for the 12 months ended 31 December 2009 received an unmodified auditor's report and have been filed with the Registrar of Companies.

 

In order to assist with comparability, we have restated the 2009 interim results to reflect the 2009 year end treatment, as debt, of the convertible A and B shares, which were previously treated as equity. Further information is set out in note 3 below.

 

The Group has estimated an annualised effective tax rate of 18%. The effective rate is significantly lower than prevailing corporation tax rates in the UK because of the availability of accumulated tax losses in certain Group companies.

 

Copies of this statement will be available to members of the public at the Company's registered office: York House, 74-82 Queen Victoria Street, London, EC4N 4SJ and on its website www.volvere.co.uk.

 

2 Segment information

 

All revenue arose through services rendered in the principal activities of online marketing and data services, security solutions and investing and management services. The Certification Services segment was sold on 3 July 2009 and treated as discontinued for the period ending on that date.

 

The Group's primary reporting format for reporting segment information is business segments.

 

6 months ended 30 June 2010
	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000	Discontinued activities £'000
Revenue
External	4,265	-	287	29	-	4,581	-
Inter-segment	-	-	-	86	(86)	-	-
Total	4,265	-	287	115	(86)	4,581	-
Segment result (note (a))	633	-	52	(708)	-	(23)	-
Loss from operations before goodwill and amortisation of intangible assets						(23)	-
Amortisation of intangible assets						-	-
Investment revenues						350	-
Other gains and losses						104	-
Negative goodwill released to income						-	-
Net finance expense						(286)	-
Profit on ordinary activities before tax						145	-
Gain on disposal of discontinued operation (note 4)						-	100
Profit for the period before tax						145	100
Income tax expense						(26)	-
Profit for the period						119	100

 

2 Segment information (continued)

 

	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000
Statement of financial position (note (b))
Assets	2,243	-	189	20,284	-	22,716
Liabilities	(1,657)	-	(143)	(2,487)	-	(4,287)
Net assets	586	-	46	17,797	-	18,429
Other
Capital expenditure	54	-	1	-	-	55
Depreciation	100	-	3	7		110

 

Period ended 3 July 2009 (restated)
	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000	Discontinued activities £'000
Revenue
External	5,193	-	192	25	-	5,410	2,635
Inter-segment	-	-	-	229	(229)	-	-
Total	5,193	-	192	254	(229)	5,410	2,635
Segment result (note (a))	1,021	-	(9)	(574)	-	438	604
Profit from operations before goodwill and amortisation of intangible assets						438	604
Amortisation of intangible assets						-	(120)
Investment revenues						-	-
Other gains and losses						108	-
Negative goodwill released to income						-	-
Net finance income/(expense)						(934)	(3)
(Loss)/profit on ordinary activities before tax						(388)	481
Gain on disposal of discontinued operation (note 4)						-	6,378
(Loss)/profit for the period before tax						(388)	6,859
Income tax expense						(63)	-
(Loss)/profit for the period						(451)	6,859

 

	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000
Statement of financial position (note (b))
Assets	3,837	-	69	19,788	-	23,694
Liabilities	(2,116)	-	(130)	(3,085)	-	(5,331)
Net assets	1,721	-	(61)	16,703	-	18,363
Other
Capital expenditure	165	-	1	21	-	187
Depreciation	108	-	3	9	-	120

 

2 Segment information (continued)

 

Year ended 31 December 2009
	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000	Discontinued activities £'000
Revenue
External	10,404	-	374	112	-	10,890	2,635
Inter-segment	-	-	-	338	(338)	-	-
Total	10,404	-	374	450	(338)	10,890	2,635
Segment result (note (a))	1,685	-	(42)	(1,130)	-	513	606
Profit from operations before goodwill and amortisation of intangible assets						513	606
Amortisation of intangible assets						-	(120)
Investment revenues						299	-
Other gains and losses						591	-
Negative goodwill released to income						67	-
Net finance expense						(945)	(3)
Profit on ordinary activities before tax						525	483
Gain on disposal of discontinued operation (note 4)						-	6,379
Profit for the year before tax						525	6,862
Income tax expense						(128)	-
Profit for the year						397	6,862

 

	Online marketing & data services £'000	Certification services £'000	Security solutions £'000	Investing and management services £'000	Eliminations £'000	Total £'000
Statement of financial position (note (b))
Assets	3,122	-	117	19,453	-	22,692
Liabilities	(2,443)	-	(83)	(1,934)	-	(4,460)
Net assets	679	-	34	17,519	-	18,232
Other
Capital expenditure	265	-	2	26	-	293
Depreciation	226	-	7	17	-	250
Realisation of negative goodwill	-	-	-	67	-	67

 

Note (a): The segment result has been stated before tax, interest, amortisation of intangible assets and Group management charges.

 

Note (b): Segment assets and liabilities have been stated excluding inter-segment balances.

 

	External revenue by location of customers			Non-current assets (excluding deferred tax) by location of assets
	6 months to 30 June 2010	Restated Period to 3 July 2009	Year ended 31 December 2009	30 June 2010	Restated 3 July  2009	31 December 2009
	£'000	£'000	£'000	£'000	£'000	£'000
UK	4,241	5,161	9,918	581	817	636
Rest of Europe	264	193	716	-	-	-
USA	26	40	120	-	-	-
Other	50	16	136	-	-	-
	4,581	5,410	10,890	581	817	636

 

3 Finance expense

 

The finance expense of £307,000 relates to the movement in the fair value of the Company's A and B shares. The Group has in issue A and B shares which are convertible into ordinary shares at the option of the shareholder based upon a formula contained in the Company's Articles of Association. The A and B shares do not have a cash alternative. However, because the shares convert into a variable number of ordinary shares, dependent inter alia on the share price of the ordinary shares in issue, the terms of IAS 32 require them to be classified as debt. Accordingly, the fair value has been included under current liabilities. The corresponding (non-cash) cumulative liability of £1.38 million is included in other financial liabilities (3 July 2009 restated: £1.02 million, 31 December 2009: £1.07 million).

 

4 Discontinued operations

 

Discontinued operations relate to the activities of Sira Certification, which were sold on 3 July 2009.

 

5 Earnings per share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

	6 months to 30 June 2010 £'000	Period to 3 July 2009 £'000	Year ended 31 December 2009 £'000
Including discontinued operations
Earnings
Net (loss)/profit for the period attributable to equity holders of the parent	(99)	5,940	6,459
	No.	No.	No.
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share	5,701,234	5,675,232	5,687,457
Effects of:
- employee incentive share schemes	-	414,029	-
- employee incentive share scheme reclassified as debt	-	(414,029)	-
	5,701,234	5,675,232	5,687,457

 

From continuing operations	6 months to 30 June 2010 £'000	Restated Period to 3 July 2009 £'000	Year ended 31 December 2009 £'000
Net (loss)/profit for the period attributable to equity holders of the parent	(99)	5,940	6,459
Adjustment to exclude profit for the period from discontinued operations	(100)	(6,859)	(6,862)
Loss from continuing operations for the purposes of basic and diluted earnings per share excluding discontinued operations	(199)	(919)	(403)

 

There is no dilutive effect from share options in issue in view of the loss from continuing operations.

 

The following options have been excluded:

	30 June 2010 No.	3 July 2009 No.	31 December 2009 No.
Employee share options	35,166	99,920	35,166

 

6 Goodwill

 

	30 June 2010 £'000	3 July 2009 £'000	31 December 2009 £'000
Cost
At 1 January	305	532	532
Revisions to fair value	-	(76)	(227)
At period end	305	456	305
Accumulated impairment losses
At 1 January	-	-	-
Impairment losses for period	-	-	-
At period end	-	-	-
Carrying amount	305	456	305

 

Goodwill represents that arising from the acquisition of Interactive Prospect Targeting Limited, being the difference between the fair value of the consideration paid and the fair value of the net assets acquired.

 

7 Non-controlling interest

 

The non-controlling interest of £442,000 relates to the net assets attributable to the shares not held by the Group at 30 June 2010 in the following subsidiary undertakings:

 

	30 June 2010 £'000	3 July 2009 £'000	31 December 2009 £'000
NMT Group Limited	123	278	127
Interactive Prospect Targeting Limited	319	860	336
	442	1,138	463

 

8 Share capital

 

Pursuant to the authority granted by shareholders in February 2010 for the Company to make market purchases of its own shares, the Company purchased a further 20,000 ordinary shares of £0.0000001 at a price of £2.90 per share after the period end. This brought total shares purchased to 70,000, which are being held in treasury (666 have since been used to satisfy the exercise of share options).

 

9 Dividend

 

The Board is not recommending the payment of an interim dividend for the period ended 30 June 2010.

 

- Ends -