Last checked at 25 Sep 2009 07:00
| Press Release | 25 September 2009 |
Volvere plc
("Volvere" or the "Group")
Interim Results for the period ended 3 July 2009
Volvere plc (AIM:VLE) the turnaround investment company, announces its interim results for the period ended 3 July 2009.
Highlights
| ·; | Cash and marketable securities: £21.1 million (30 June 2008: £11.6 million, 31 December 2008: £12.5 million) |
| ·; | Group net assets: £19.4 million (30 June 2008: £10.8 million, 31 December 2008: £11.6 million) |
| ·; | Consolidated net assets and cash (including marketable securities) per share of £3.41 and £3.71 respectively (30 June 2008: £1.91 and £2.05, 31 December 2008: £2.05 and £2.20) |
| ·; | Group revenue from continuing businesses: £5.4 million (30 June 2008: £0.25 million, 12 months to 31 December 2008: £3.0 million) |
| ·; | Group profit for the period from continuing businesses: £0.5 million (30 June 2008: loss £0.2 million, 12 months to 31 December 2008: loss £0.2 million) |
| ·; | Total basic earnings per share 121.85p (30 June 2008: 0.18p, 31 December 2008: 5.69p); diluted earnings per share 113.56p (30 June 2008: 0.18p, 31 December 2008: 5.69p) |
| ·; | Sira Certification disposed of on 3 July 2009 for an initial cash consideration of £8.1 million, with a further £0.6 million contingent on future performance |
| ·; | Interactive Prospect Targeting, which was acquired on 29 September 2008, continued to perform strongly with revenue and operating profit for the period of £5.2 million and £1.0 million respectively (3 months to 31 December 2008 £2.7 million and £0.4 million). The Group has consolidated this company as a subsidiary as it has control over it, but its equity ownership is 50% |
| ·; | Continually improving environment for turnaround investing opportunities. |
For further information:
| Volvere plc | |
| Jonathan Lander, CEO | Tel: +44 (0) 20 7979 7596 |
|
| www.volvere.co.uk |
| Arbuthnot Securities Limited | |
| Ed Gay, Corporate Finance | Tel: +44 (0) 20 7012 2000 |
| edwardgay@arbuthnot.co.uk | www.arbuthnot.co.uk |
Media enquiries:
| Abchurch | |
| Henry Harrison-Topham / Charlie Jack | Tel: +44 (0) 20 7398 7706 |
| charlie.jack@abchurch-group.com | www.abchurch-group.com |
Chairman's Statement
I am pleased to report on the results for the period ended 3 July 2009.
The Group has achieved significant progress in the first half of 2009. The disposal of Sira Certification on 3 July for an initial £8.1m was particularly pleasing as this has increased the Group's cash reserves significantly at a time when cash is valuable.
Our trading operations are now principally those of Interactive Prospect Targeting Limited ("IPT"), which is owned 50% by the Group. IPT's trading performance in the period was excellent, both in absolute terms and relative to the prior period.
Outlook
We continue to review potential acquisitions and investments. Our strong balance sheet, which is principally cash, gives the Group the financial strength to take on the increasing challenges of the present economic climate.
Lord Kalms
Chairman
25 September 2009
Chief Executive's Statement
The Group achieved a number of successes in the first half of 2009.
Disposal of Sira Certification
Of these, the disposal of the Group's certification business on 3 July following a period of profitable growth, was perhaps the most significant. This business had been acquired by Volvere in late 2005/early 2006 for a total consideration of £1.4 million. Having already recouped the Group's cash outlay prior to the sale, we achieved a respectable price of a minimum of £8.1 million - at a time of a severe economic downturn. This was Volvere's second substantial turnaround and we are proud that it has proven to be so successful for the Group, Sira's staff and other stakeholders.
Online marketing and data services
The Group's largest business is now Interactive Prospect Targeting Limited ("IPT"), an online marketing and data services company. In the first half of 2009, revenue and pre-tax profits were £5.2 million and £1.0 million respectively. Since the period end, in August, IPT paid a dividend of £1 million (of which Volvere plc received £0.5 million). As a result the Group has now recouped all of its initial investment plus a further £0.3 million in less than one year. This outstanding result is a credit to the talents and hard work of the management and staff of the company.
The Board believes that the online marketing and data services sector remains attractive with marketers increasingly appreciating the value of targeted customer prospect databases built online. However, the economic environment remains challenging as there is little spending by more traditional direct marketers such as financial services clients. We are, therefore, keeping a tight control on costs until there is clear evidence of a more normal economic environment. At that point, however, we would expect IPT to perform even better.
Security solutions
The security solutions business continued to make progress during the period and achieved increased penetration of the judicial services sector with the SiraView digital CCTV viewer. The pipeline for surveillance solutions for clients continues to offer attractive opportunities for follow-on work.
Distressed securities
In March and April 2009 Volvere invested approximately £1 million in certain UK bank securities. I am pleased to report that those investments have performed extremely well. At the period end, these investments were valued at £1.47 million. Since that time they have increased further in value such that, together with accrued interest, their value is over £1.8 million. The Board believes that, whilst these investments remain speculative, they represent a good investment, particularly if the economic recovery is slow.
The financial performance of each of the Group's businesses is set out in detail in the Financial Review below.
Acquisitions and future strategy
Distressed deal flow has increased as would be expected. However, we believe that some banks are adopting a more lenient approach to covenant breaches than they have done in the past. As a result some restructuring opportunities that would involve third party capital are being postponed. We believe, however, that the need for restructurings is inevitable and this will present excellent opportunities for the Group's capital and skills in the coming twelve months.
With cash and marketable securities totalling approximately £21 million and no debt, the Group is well positioned to benefit from the current climate and we are working to identify opportunities to further enhance shareholder value.
Jonathan LanderChief Executive
25 September 2009
Financial Review
This Financial Review covers the Group's performance during the period ended 3 July 2009. It should be read in conjunction with the Chairman's and Chief Executive's Statements.
Disposal
On 3 July 2009 the Group disposed of Sira Certification, which represented the Group's Certification segment. The consideration was an initial cash payment of £8.1 million (following agreement of the net assets subject to the disposal), with up to an additional £0.6 million dependent upon the performance of Sira Certification for the years ended 31 December 2009 and 2010. The Group has assumed, at this stage, that the fair value of the total consideration receivable will be the initial consideration of £8.1 million. When the Group has better visibility of the relevant periods' results, the fair value will be reassessed.
For the period, the Certification segment performed strongly, with revenue and pre-tax profit (before group management charges) of £2.6 million (2008: £2.1 million) and £0.5 million (2008: £0.2 million) respectively. The consolidated net assets disposed of were £0.08 million. The Certification activities had been acquired in September 2005 and March 2006 for approximately £1.4 million and had subsequently repaid their initial consideration to the Group from operating cash flow. After costs (including performance incentives relating to the disposal) the gain on sale was approximately £6.4 million. Detailed information about the disposal is included in note 3 to the interim results.
Since the disposal the Group has undertaken a review of its central costs to ensure that the central services team is appropriately sized for the remaining operations.
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. As noted above, at the end of the period the Group disposed of its Certification services businesses and these have been classified as discontinued.
Online marketing and data services
The Group's principal trading subsidiary is Interactive Prospect Targeting Limited ("IPT"), which forms the online marketing and data services segment. IPT was acquired on 29 September 2008 for approximately £1.4 million, with the consideration being provided by Volvere plc through a mixture of debt (£1.2 million) and equity (£0.2 million). Following the acquisition, IPT issued shares to (and received loans from) certain of its management and staff for a total consideration of £0.8 million. The effect of this was to dilute the Group's shareholding to 50%; IPT has been consolidated as a subsidiary in line with the prior year. During the period, IPT repaid shareholder loans to Volvere plc of £0.8 million and to its management and staff totalling £0.6 million. In August 2009, IPT paid a dividend totalling £1.0 million of which £0.5 million was paid to Volvere plc and the balance to IPT's third party shareholders.
IPT's revenue and pre-tax profit (before group management charges) in the period were £5.2 million (3 months to 31 December 2008: £2.7 million) and £1.0 million (3 months to 31 December 2008: £0.4 million). The company has continued to focus on identifying margin-enhancing revenue streams whilst maintaining strict cost control.
Security solutions
Security solutions revenue was £0.19 million in the period (30 June 2008: £0.22 million; 31 December 2008: £0.36 million). There was a small loss (before group charges) of £9,000 (30 June 2008: profit £17,000; 31 December 2008: loss £13,000). Although revenue was slightly below the corresponding period in 2008, the first half of 2009 was up 37% when compared to the second half of 2008, resulting in a corresponding improvement in profitability. Sales of the digital CCTV-viewer, SiraView, continue to make progress, although the funding restrictions of central government are inevitably impacting on some customers. Surveillance equipment development work for the security services continues to present interesting opportunities and we expect that further projects in this area will be won in 2009.
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 segments. 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.
Earnings per share
The basic and diluted earnings per ordinary share were respectively 121.85p and 113.56p (30 June 2008: 0.18p and 0.18p, 31 December 2008: 5.69p and 5.69p). During the period the Group continued the operation of a share option scheme in which all staff are entitled to participate, subject to certain conditions. Following the disposal of Sira Certification, the Group issued 29,238 new ordinary shares for a total consideration of £42,500 pursuant to the rules of the scheme.
Cash management
Cash balances and marketable securities at the period end totalled £21.1 million (30 June 2008: £11.6 million; 31 December 2008: £12.5 million). The increase compared to the prior periods reflects principally the sale on 3 July of Sira Certification for £8.1 million in cash (before expenses).
The Group has continued to adopt an active treasury management strategy. Investments totalling £1.0 million in certain UK bank securities were made in March and April 2009, which have been revalued to their market value at the period end of £1.47 million. Since the period end the Group has invested £7.45 million in UK government bonds and a further £2.0 million in an exchange-traded fund that invests in corporate bonds. The balance of the Group's cash is deposited with UK clearing banks.
During the period the Group's 50% owned subsidiary, Interactive Prospect Targeting Limited, repaid third party shareholder loans totalling £0.6 million and prior to disposal, Sira Certification repaid bank debt of £0.3 million.
Hedging
It is not the Group's policy to enter into derivative instruments to hedge interest rate risk.
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 LanderChief Financial & Operating Officer
25 September 2009
Consolidated income statement
| Note | Period to 3 July 2009 | 6 months to 30 June 2008 | 12 months to 31 December 2008 | |
| £'000 | £'000 | £'000 | ||
| Continuing operations | ||||
| Revenue | 5,410 | 246 | 3,045 | |
| Cost of sales | (1,820) | (59) | (978) | |
| Gross profit | 3,590 | 187 | 2,067 | |
| Administrative expenses | (3,152) | (694) | (2,702) | |
| Operating profit/(loss) | 438 | (507) | (635) | |
| Investment revenues | - | - | 1 | |
| Other gains and losses | 108 | 8 | 8 | |
| Finance expense | (2) | - | (9) | |
| Finance income | 43 | 280 | 457 | |
| Profit/(loss) before tax | 587 | (219) | (178) | |
| Tax | (63) | - | (4) | |
| Profit/(loss) for the period from continuing operations | 524 | (219) | (182) | |
| Discontinued operations | ||||
| Profit for the period from discontinued operations | 3 | 6,859 | 230 | 691 |
| Profit for the period | 7,383 | 11 | 509 | |
| Attributable to: | ||||
| - Equity holders of the parent | 6,915 | 10 | 323 | |
| - Minority interest | 468 | 1 | 186 | |
| 7,383 | 11 | 509 | ||
| Earnings/(loss) per share | 4 | |||
| Continuing operations | ||||
| - Basic (pence) | 0.99p | (3.88)p | (6.48)p | |
| - Diluted (pence) | 0.92p | (3.86)p | (6.48)p | |
| Discontinued operations | ||||
| - Basic (pence) | 120.86p | 4.05p | 12.17p | |
| - Diluted (pence) | 112.64p | 4.05p | 12.17p | |
| Total | ||||
| - Basic (pence) | 121.85p | 0.18p | 5.69p | |
| - Diluted (pence) | 113.56p | 0.18p | 5.69p |
Consolidated statement of comprehensive income
| Period to 3 July 2009 | 6 months to 30 June 2008 | 12 months to 31 December 2008 | ||
| £'000 | £'000 | £'000 | ||
| Profit for the period | 7,383 | 11 | 509 | |
| Other comprehensive income | ||||
| Available-for-sale investments | ||||
| - current period gains | 465 | - | 97 | |
| - reclassification to profit | (97) | - | - | |
| Other comprehensive income, net of tax | 368 | - | 97 | |
| Total comprehensive income for the period | 7,751 | 11 | 606 | |
| Attributable to: | ||||
| Equity holders of the parent | 7,283 | 10 | 420 | |
| Minority interests | 468 | 1 | 186 | |
| 7,751 | 11 | 606 |
Consolidated statement of changes in equity
| Share capital £'000 | Share premium £'000 | Revaluation reserve £'000 | Share option reserve £'000 | Retained earnings £'000 | Total £'000 | Minority interest £'000 | Total equity £'000 | |
| Balance at 1 January 2009 | 50 | 3,586 | 97 | 16 | 7,218 | 10,967 | 670 | 11,637 |
| Equity share options issued/cancelled | - | - | - | - | - | - | - | - |
| Minority interest | - | - | - | - | - | - | - | - |
| Transactions with owners | - | - | - | - | - | - | - | - |
| Profit for the period | - | - | - | - | 6,915 | 6,915 | 468 | 7,383 |
| Other comprehensive income | ||||||||
| Available-for-sale financial assets | ||||||||
| - current period gains | - | - | 465 | - | - | 465 | - | 465 |
| - reclassification to profit | - | - | (97) | - | - | (97) | - | (97) |
| Total comprehensive income for the period | - | - | 368 | - | 6,915 | 7,283 | 468 | 7,751 |
| Balance at 3 July 2009 | 50 | 3,586 | 465 | 16 | 14,133 | 18,250 | 1,138 | 19,388 |
| Balance at 1 January 2008 | 50 | 3,586 | - | 15 | 6,887 | 10,538 | 283 | 10,821 |
| Equity share options issued/cancelled | - | - | - | 4 | 3 | 7 | - | 7 |
| Minority interest | - | - | - | - | - | - | (2) | (2) |
| Transactions with owners | - | - | - | 4 | 3 | 7 | (2) | 5 |
| Profit for the period | - | - | - | - | 10 | 10 | 1 | 11 |
| Other comprehensive income | ||||||||
| Available-for-sale financial assets | ||||||||
| - current period gains | - | - | - | - | - | - | - | - |
| Total comprehensive income for the period | - | - | - | - | 10 | 10 | 1 | 11 |
| Balance at 30 June 2008 | 50 | 3,586 | - | 19 | 6,900 | 10,555 | 282 | 10,837 |
| Share capital £'000 | Share premium £'000 | Revaluation reserve £'000 | Share option reserve £'000 | Retained earnings £'000 | Total £'000 | Minority interest £'000 | Total equity £'000 | |
| Balance at 1 January 2008 | 50 | 3,586 | - | 15 | 6,887 | 10,538 | 283 | 10,821 |
| Equity share options issued/cancelled | - | - | - | 1 | 8 | 9 | - | 9 |
| Minority interest | - | - | - | - | - | - | 201 | 201 |
| Transactions with owners | - | - | - | 1 | 8 | 9 | 201 | 210 |
| Profit for the period | - | - | - | - | 323 | 323 | 186 | 509 |
| Other comprehensive income | ||||||||
| Available-for-sale financial assets | ||||||||
| - current period gains | - | - | 97 | - | - | 97 | - | 97 |
| Total comprehensive income for the period | - | - | 97 | - | 323 | 420 | 186 | 606 |
| Balance at 31 December 2008 | 50 | 3,586 | 97 | 16 | 7,218 | 10,967 | 670 | 11,637 |
Consolidated statement of financial position
| Note | 3 July 2009 | 30 June 2008 | 31 December 2008 | |
| £'000 | £'000 | £'000 | ||
| Assets | ||||
| Non-current assets | ||||
| Property, plant & equipment | 361 | 225 | 495 | |
| Goodwill | 5 | 456 | - | 532 |
| Other intangible assets | - | 597 | 476 | |
| Total non-current assets | 817 | 822 | 1,503 | |
| Current assets | ||||
| Trade and other receivables | 1,787 | 1,365 | 3,264 | |
| Cash and cash equivalents | 19,620 | 11,632 | 2,999 | |
| Available for sale investments | 1,470 | - | 9,497 | |
| Deferred tax asset | - | - | 88 | |
| Total current assets | 22,877 | 12,997 | 15,848 | |
| Total assets | 23,694 | 13,819 | 17,351 | |
| Liabilities | ||||
| Current liabilities | ||||
| Trade and other payables | (4,214) | (2,592) | (4,758) | |
| Taxation | (67) | - | (21) | |
| Other financial liabilities | - | (120) | (720) | |
| Total current liabilities | (4,281) | (2,712) | (5,499) | |
| Non-current liabilities | ||||
| Financial liabilities | (25) | (270) | (215) | |
| Total non-current liabilities | (25) | (270) | (215) | |
| Total liabilities | (4,306) | (2,982) | (5,714) | |
| NET ASSETS | 19,388 | 10,837 | 11,637 | |
| Equity | ||||
| Share capital | 50 | 50 | 50 | |
| Share premium account | 3,586 | 3,586 | 3,586 | |
| Revaluation reserve | 465 | - | 97 | |
| Share option reserve | 16 | 19 | 16 | |
| Retained earnings | 14,133 | 6,900 | 7,218 | |
| Capital and reserves attributable to equity holders of the Company | 18,250 | 10,555 | 10,967 | |
| Minority interest | 1,138 | 282 | 670 | |
| TOTAL EQUITY | 19,388 | 10,837 | 11,637 | |
Consolidated statement of cash flows
| Period to 3 July 2009 | Period to 3 July 2009 | 6 months to 30 June 2008 | 6 months to 30 June 2008 | 12 months to 31 December 2008 | 12 months to 31 December 2008 | ||
| Note | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Profit/(loss) for the period | 7,383 | 11 | 509 | ||||
| Adjustments for: | |||||||
| Investment revenues | - | - | (1) | ||||
| Other gains and losses | (108) | (8) | (8) | ||||
| Finance expense | 2 | 8 | 35 | ||||
| Finance income | (43) | (289) | (475) | ||||
| Gain on disposal of discontinued operations | (6,859) | - | - | ||||
| Tax charge/(credit) | 63 | - | (67) | ||||
| Depreciation | 120 | 37 | 137 | ||||
| Amortisation of intangible assets | - | 120 | 240 | ||||
| Share based payment expenses | - | 7 | 9 | ||||
| (6,825) | (125) | (130) | |||||
| Operating cash flows before movements in working capital | 558 | (114) | 379 | ||||
| Decrease in trade and other receivables | 268 | 148 | 307 | ||||
| Increase/(decrease) in trade and other payables | 298 | (350) | 343 | ||||
| Cash generated by operations | 1,124 | (316) | 1,029 | ||||
| Interest paid | (2) | (8) | (32) | ||||
| Net cash from operating activities | 1,122 | (324) | 997 | ||||
| Investing activities | |||||||
| Acquisition of subsidiary undertaking including associated costs, net of cash acquired | - | - | (1,373) | ||||
| Increase in investment in subsidiary undertaking | - | - | (2) | ||||
| Disposal of subsidiary | 8,000 | - | - | ||||
| Purchases of property, plant and equipment | (200) | (60) | (175) | ||||
| Disposal of available for sale investments | 9,508 | 57 | 57 | ||||
| Shares issued to minority interest | - | - | 200 | ||||
| Interest received | 43 | 251 | 476 | ||||
| Income from available for sale investments | - | - | 1 | ||||
| Purchase of available for sale investments | (1,005) | - | (9,400) | ||||
| Fair value of additional consideration received from assets acquired | 56 | - | - | ||||
| Net cash generated from/(used in) investing activities | 16,402 | 248 | (10,216) | ||||
| Financing activities | |||||||
| Loan advances | - | - | 600 | ||||
| Repayment of bank borrowings | (903) | (30) | (120) | ||||
| Net cash (used in)/generated from financing activities | (903) | (30) | 480 | ||||
| Net increase/(decrease) in cash and cash equivalents | 16,621 | (106) | (8,739) | ||||
| Cash and cash equivalents at beginning of period | 2,999 | 11,738 | 11,738 | ||||
| Cash and cash equivalents at end of period | 19,620 | 11,632 | 2,999 |
Notes forming part of the unaudited interim results for the period ended 3 July 2009
1 Financial information
The financial information for the period ended 3 July 2009 and the comparative figures for the six months ended 30 June 2008 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 8 May 2009 in its annual financial statements, which are available on the Company's website at www.volvere.co.uk.
The comparative figures for the 12 months to 31 December 2008 have been prepared under IFRS (and have been restated to show as discontinued businesses the businesses sold on 3 July 2009). They do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The accounts for the 12 months ended 31 December 2008 received an unmodified auditor's report and have been filed with the Registrar of Companies and did not contain statements under section 237(2) or (3) of the Companies Act 1985.
The Group has estimated an annualised effective tax rate of 11%. 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 disposed of at the end of the period.
The Group's primary reporting format for reporting segment information is business segments.
| Period ended 3 July 2009 | |||||
| Business Segments | |||||
| Online marketing & data services £'000 | Security solutions £'000 | Investing and management Services £'000 | Eliminations £'000 | Total £'000 | |
| Revenue | |||||
| External | 5,193 | 192 | 25 | - | 5,410 |
| Inter-segment | - | - | 229 | (229) | - |
| Total | 5,193 | 192 | 254 | (229) | 5,410 |
| Segment result (note (a)) | 1,021 | (9) | (574) | - | 438 |
| Profit from operations before goodwill and amortisation of intangible assets | 438 | ||||
| Amortisation of intangible assets | - | ||||
| Other gains and losses | 108 | ||||
| Net finance income | 41 | ||||
| Profit on ordinary activities before tax | 587 | ||||
| Tax | (63) | ||||
| Profit for the period from discontinued operations (note 2) | 6,859 | ||||
| Profit for the period | 7,383 | ||||
2 Segment information (continued)
| Period ended 3 July 2009 | |||||
| Business Segments | |||||
| Online marketing & data 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) | (2,060) | - | (4,306) |
| Net assets/(liabilities) | 1,721 | (61) | 17,728 | - | 19,388 |
| Other | |||||
| Capital expenditure | 165 | 1 | 21 | - | 187 |
| Depreciation | 108 | 3 | 9 | - | 120 |
| Amortisation | - | - | - | - | - |
| 6 months ended 30 June 2008 | |||||||
| Business Segments | |||||||
| Online marketing & data services £'000 | Security solutions £'000 | Investing and management services £'000 | Eliminations £'000 | Total £'000 | |||
| Revenue | |||||||
| External | - | 216 | 30 | - | 246 | ||
| Inter-segment | - | - | 184 | (184) | - | ||
| Total | - | 216 | 214 | (184) | 246 | ||
| Segment result (note (a)) | - | 17 | (524) | - | (507) | ||
| (Loss)/profit from operations before goodwill and amortisation of intangible assets | (507) | ||||||
| Amortisation of intangible assets | - | ||||||
| Other gains and losses | 8 | ||||||
| Net finance income | 280 | ||||||
| (Loss)/profit on ordinary activities before tax | (219) | ||||||
| Tax | - | ||||||
| Profit for the period from discontinued operations (note 2) | 230 | ||||||
| Profit for the period | 11 | ||||||
2 Segment information (continued)
| 6 months ended 30 June 2008 | ||||||
| Business Segments | ||||||
| Online marketing & data services £'000 | Security solutions £'000 | Investing and management services £'000 | Eliminations £'000 | Discontinued activities £'000 | Total £'000 | |
| Statement of financial position (note (b)) | ||||||
| Assets | - | 147 | 11,509 | - | 2,163 | 13,819 |
| Liabilities | - | (132) | (677) | - | (2,173) | (2,982) |
| Net assets/(liabilities) | - | 15 | 10,832 | - | (10) | 10,837 |
| Other | ||||||
| Capital expenditure | - | 10 | 19 | - | 31 | 60 |
| Depreciation | - | 3 | 5 | - | 29 | 37 |
| Amortisation | - | - | - | - | 120 | 120 |
| 12 months ended 31 December 2008 | ||||||
| Business Segments | ||||||
| Online marketing & data services £'000 | Security solutions £'000 | Investing and management services £'000 | Eliminations £'000 | Total £'000 | ||
| Revenue | ||||||
| External | 2,658 | 356 | 31 | - | 3,045 | |
| Inter-segment | - | - | 713 | (713) | - | |
| Total | 2,658 | 356 | 744 | (713) | 3,045 | |
| Segment result (note (a)) | 406 | (13) | (1,028) | - | (635) | |
| (Loss)/profit from operations before goodwill and amortisation of intangible assets | (635) | |||||
| Amortisation of intangible assets | - | |||||
| Investment revenues | 1 | |||||
| Other gains and losses | 8 | |||||
| Net finance income/(expense) | 448 | |||||
| (Loss)/profit on ordinary activities before tax | (178) | |||||
| Tax | (4) | |||||
| Profit for the period from discontinued operations (note 2) | 691 | |||||
| Profit for the period | 509 | |||||
2 Segment information (continued)
| 12 months ended 31 December 2008 | ||||||
| Business Segments | ||||||
| Online marketing & data services £'000 | Security solutions £'000 | Investing and management services £'000 | Eliminations £'000 | Discontinued activities £'000 | Total £'000 | |
| Statement of financial position (note (b)) | ||||||
| Assets | 4,117 | 119 | 10,822 | - | 2,293 | 17,351 |
| Liabilities | (2,539) | (73) | (570) | - | (2,532) | (5,714) |
| Net assets/(liabilities) | 1,578 | 46 | 10,252 | - | (239) | 11,637 |
| Other | ||||||
| Capital expenditure | 48 | 11 | 24 | - | 92 | 175 |
| Depreciation | 50 | 7 | 11 | - | 69 | 137 |
| Amortisation | - | - | - | - | 240 | 240 |
Note (a): The segment result has been stated before tax, interest, amortisation of intangible assets and Group management charges. Comparative results have been stated as discontinued where the segment activities have been classified as such in the period ended 3 July 2009.
Note (b): Segment assets and liabilities have been stated excluding inter-segment balances.
The Group's secondary reporting format for reporting segment information is geographic segments.
| External revenue by location of customers | Total assets by location of assets | |||||
| Period to 3 July 2009 | 6 months to 30 June 2008 | 12 months ended 31 December 2008 | 3 July 2009 | 30 June 2008 | 31 December 2008 | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| UK | 5,161 | 246 | 2,751 | 23,634 | 11,656 | 15,058 |
| Rest of Europe | 193 | - | 240 | - | - | - |
| USA | 40 | - | - | - | - | - |
| Other | 16 | - | 54 | - | - | - |
| 5,410 | 246 | 3,045 | 23,634 | 11,656 | 15,058 | |
| Capital expenditure by location of assets | |||
| Period to 3 July 2009 | 6 months to 30 June 2008 | Year ended 31 December 2008 | |
| £'000 | £'000 | £'000 | |
| UK | 23 | 29 | 83 |
| Rest of Europe | - | - | - |
| USA | - | - | - |
| Other | - | - | - |
| 23 | 29 | 83 | |
The above information is in respect of continuing businesses at the interim reporting date. Information on discontinued operations is contained in note 3.
3 Discontinued operations
On 3 July 2009 the Group sold Sira Test and Certification Limited, Sira Environmental Limited and Sira Certification Service, which together represented the Group's certification services segment.
The profit for the period from discontinued operations is as follows:
| £'000 | ||
| Profit for period after tax (before group management and other charges) | 481 | |
| Gain on discontinued operations after tax (see below) | 6,378 | |
| 6,859 |
The gain from discontinued operations is as follows:
| £'000 | £'000 | |
| Consideration: | ||
| Cash receivable | 8,117 | |
| Less: disposal costs | (1,657) | |
| 6,460 | ||
| Less: net assets disposed of | ||
| Property, plant and equipment | 530 | |
| Trade and other receivables | 1,328 | |
| Other financial assets | 88 | |
| Cash | 640 | |
| Trade and other payables | (2,504) | |
| 82 | ||
| Pre-tax gain on disposal of discontinued operation | 6,378 | |
| Related tax expense | - | |
| Post tax gain on disposal of discontinued operation | 6,378 | |
| The net cash inflow comprises: | ||
| Cash received | 8,000 |
The consideration has been determined by reference to the fair value of the expected consideration receivable. There are additional elements of deferred consideration which are receivable upon certain milestones being achieved by the discontinued businesses for the years ending 31 December 2009 and 2010, with a total maximum payable of £0.6 million over two years. Until such time as the achievement of those milestones has been determined, the Group has assumed that the amount of consideration receivable will be that received to date (namely £8.1 million).
The statement of cash flows includes the following amounts relating to discontinued operations:
| 2009 £'000 | ||
| Operating activities | 748 | |
| Investing activities | (2) | |
| Financing activities | (300) | |
| 446 |
4 Earnings per share
| Period to 3 July 2009 £'000 | 6 months to 30 June 2008 £'000 | Year ended 31 December 2008 £'000 | |
| Numerator | |||
| Profit for the year attributable to equity holders | 6,915 | 10 | 323 |
| Earnings used in basic EPS and diluted EPS | 6,915 | 10 | 323 |
| Denominator | |||
| Weighted average number of shares used in basic EPS | 5,675,232 | 5,675,232 | 5,675,232 |
| Effects of: | |||
| - employee share incentive schemes | 414,029 | 22,896 | - |
| Weighted average number of shares used in diluted EPS | 6,089,261 | 5,698,128 | 5,675,232 |
Certain employee share options have been excluded from the calculation above as their exercise price is greater than the weighted average share price during the period and therefore it would not be advantageous for the holders to exercise them.
The following options have been excluded:
| 3 July 2009 No. | 30 June 2008 No. | 31 December 2008 No. | |
| Employee share options | 99,920 | 99,920 | 99,920 |
5 Goodwill
| 3 July 2009 £'000 | 30 June 2008 £'000 | 31 December 2008 £'000 | |
| Cost | |||
| At 1 January | 532 | - | - |
| Business combination | - | - | 532 |
| Revisions to fair value | (76) | - | - |
| At period end | 456 | - | 532 |
| Accumulated impairment losses | |||
| At 1 January | - | - | - |
| Impairment losses for period | - | - | - |
| At period end | - | - | - |
| Carrying amount | 456 | - | 532 |
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.
6 Minority interest
The minority interest of £1,138,000 relates to the net assets attributable to the shares not held by the Group at 3 July 2009 in the following subsidiary undertakings:
| 3 July 2009 £'000 | 30 June 2008 £'000 | 31 December 2008 £'000 | |
| NMT Group PLC | 278 | 282 | 284 |
| Interactive Prospect Targeting Limited | 860 | - | 386 |
| 1,138 | 282 | 670 |
7 Events after the balance sheet date
Further to the investments (totalling £1,005,000) in certain UK bank securities in March and April 2009, the Group invested £7,453,000 in July 2009 in UK government bonds and a further £2,011,000 in an exchange traded fund that invests in corporate bonds. The balance of the Group's cash was deposited with UK clearing banks.
In July 2009 Volvere plc increased its holding in NMT Group PLC to 97.75% for a consideration of £90,000.
The Group's 50% owned subsidiary, Interactive Prospect Targeting Limited, declared a dividend in July 2009 of £1 million, of which £0.5 million was paid to Volvere plc and £0.5 million to IPT's other shareholders.
8 Dividend
The Board is not recommending the payment of an interim dividend for the period ended 3 July 2009.
- Ends -