TIDMAVI
RNS Number : 0101R
Avisen PLC
28 October 2011
28 October 2011
Avisen plc (AIM: AVI)
("Avisen", the "the Group" or "Company")
Interim Results for the six month period ended 31 July 2011
The directors of Avisen (the "Board")(AIM:AVI), the business
technology and profit improvement specialist, is pleased to
announce the Company's unaudited interim results for the six month
period ended 31 July 2011.
Highlights
Current year
Financial highlights
-- Turnover from continuing operations increased by 53 per cent
to GBP2.6m (6 months 2010: GBP1.7m)
-- Adjusted* EBITDA from continuing operations of GBP0.6m (6 months 2010: loss of GBP0.5m)
-- Overall profit for the period after tax of GBP0.8m, (6 months
2010: loss of GBP6.6m after impairment of GBP4.5m in relation to
the acquisition of Xploite plc)
-- Strong balance sheet at 31 July 2011 with GBP2.9m of cash and
no debt (31 January 2011 net cash of GBP0.2m)
-- The Avisen trading business generated revenues of GBP2.5m and adjusted* EBITDA of GBP1m
-- The Storage Fusion trading business generated revenues of
GBP0.2m and broke even at an adjusted* EBITDA level
-- Disposed of Inca Software Limited ("Inca") for GBP7.3m of
cash resulting in an accounting profit on disposal of GBP0.4m,
following the write-off of goodwill and intangible assets of
GBP7.6m
*Adjusted for strategic, integration and other one off items
Operational highlights
-- In July, a contract was signed with Unilever plc ("Unilever")
to supply a global cost to serve solution, demonstrating Avisen's
ability in the 'Big Data' market
-- Storage Fusion finalised the development of the Portal
enabled Storage Resource Analysis ("SRA") product, which will
enable it to be sold as 'Software as a Service" ("SaaS")
-- In June, Storage Fusion signed a sales contract with a global
information technology company for its SRA Software product
Post Balance Sheet Highlights
-- On 7 October 2011, the Company announced a transaction to
acquire the entire issued share capital of 1Spatial Holdings plc
("1Spatial") for a consideration GBP4.7m to be satisfied by the
issue of shares in Avisen ("the Transaction"). Subject to, inter
alia, various shareholder approvals, the scheme is expected to
become effective on 25 November 2011
-- In September, Storage Fusion signed a further two contracts,
with a US Storage Consultant and another global technology
company
Commenting on the results, Marcus Hanke, CEO of Avisen,
says:
"We have demonstrated successful trading performance during the
period as well as securing a number of key contracts. This gives us
a strong platform for growth going forward. We are excited for the
future and feel confident that, subject to completion of the
1Spatial Transaction, the enlarged group will be well positioned
for growth and the generation of increased shareholder value"
For further information, please contact:
Avisen plc
Marcus Hanke (CEO)/Claire Milverton (CFO) Tel: +44 (0)20
3527 5004
Strand Hanson Limited Tel: +44 (0)20
74093 494
James Harris / Paul Cocker
Bishopsgate Communications Tel: +44 (0)20
7562 3350
Deepali Schneider/Natalie Quinn
avisen@bishopsgatecommunications.com
Chairman's statement
I am pleased to present the results of the group for the six
month period ended 31 July 2011. We have had a successful first
half of the year both from a results perspective and from a
strategic perspective. Comparing the 6 months for July 2010 to the
6 months to July 2011, all of our performance measures have
improved. Most notably, our overall profit after tax from total
operations has improved from a GBP6.6m loss in 2010 to a GBP0.8m
profit in 2011.
In my July 2011 Chairman's statement I commented on our future,
which would be to invest in our current businesses and actively
pursue acquisition opportunities. I am pleased to report that we
have been taking great steps in the right direction to achieve
this, with investment in both the Avisen trading business and
Storage Fusion, giving rise to success and more recently the
announcement of the proposed Transaction with 1Spatial.
We are very excited about the Transaction. Avisen had secured a
strong financial position following the disposal of Inca and
signing the Unilever contract. We needed to add scale to our
business but also wanted a business which had significant
Intellectual Property Rights in its own right and combined with
Avisen would provide a leveraged opportunity. We considered a
number of opportunities before deciding that 1Spatial was a
prospect where we felt that there would be the greatest ability to
extract value across the new combined group. Subject to certain
conditions and various shareholder approvals, the Transaction is
due to complete on 25 November 2011 and, should it do so, we will
able to include two months trading results of 1Spatial in our year
end results to 31 January 2012.
Overall results for the six months to July 2011 (with comparison
to July 2010)
Results from continuing operations for the six month period
ended 31 July 2011 include turnover of GBP2.6m (6 months 2010:
GBP1.7m), adjusted EBITDA of GBP0.6m (6 months 2010: loss of
GBP0.5m) and a profit for the period after tax of GBP0.4m (6 months
2010: loss of GBP6.5m following a one off impairment charge of
GBP4.5m on the acquisition of Xploite plc).
Overall net profits for the period including both continuing and
discontinued operations were GBP0.8m (6 months 2010: loss of
GBP6.6m). Adjusted profit per share was 0.26 pence (6 months 2010:
loss was 0.13 pence) and basic profit per share from continuing
operations was 0.18 pence, (6 months 2010: loss was 3.45
pence).
Avisen UK
During the first half of this year we invested heavily in
securing the Unilever 'Global Cost to Serve' contract for its
global supply chain and customer service function. This was a
pivotal contract which demonstrated that we could deliver a 'Cost
to Serve' solution to a world leading company. The increasing focus
on 'Big Data', analysing large data sets, is set to become a key
basis of competition, underpinning new waves of productivity
growth, innovation, and consumer surplus going forward. It was
therefore imperative that we secured this contract which provides
the blueprint for future sales in this area. The contract will
provide a number of revenue streams including licence fees, support
and maintenance fees, managed service fees and consultancy fees for
an initial period of three years. During the period we have also
worked with a number of blue chip clients developing proof of
concept 'Cost to Serve' solutions. As well as delivering these
'Cost to Serve' solutions, we have also been working with our other
key customers during the period including Atkins and Tesco
Direct.
The un-predictable nature of revenue and the significant lead
time from initial customer interest to fulfilment is an unavoidable
factor of our business. However, the Board has a strong belief in
the management team's ability to secure and fulfil new contracts,
particularly following the success of the Unilever contract and I
am pleased that we can see a pipeline of opportunities arising for
the future.
Avisen's revenue in the period improved by 49% compared with the
previous period to GBP2.5m (6 months 2010: GBP1.7m). The primary
driver for the increase was the recognition of the Unilever licence
revenues. Improved gross margins and cost control gives an Adjusted
EBITDA profit of GBP1.0m for the 6 month period (6 months 2010:
GBP0.3m). This is an increase of 233% on the prior period at the
adjusted EBITDA performance level.
Storage Fusion
We have also invested heavily in our Storage Fusion business to
extend the vendor storage arrays we support, and to develop a
portal to enable our SRA product to be delivered as a true
"software as a service" solution. This is the first portal enabled
storage assessment service in the market place. The product is now
starting to generate genuine traction in the market place; which is
demonstrated by the significant amount of interest from a number of
global storage vendors and the signing of three major contracts in
the last four months (June to September). The sales pipeline is
very strong, however we have been limited by resources and have
therefore taken steps to recruit additional staff to meet the
demand.
Storage Fusions' revenue in the period was GBP0.2m, as compared
with GBP0.1m in the corresponding period last year (Storage Fusion
was acquired on 27 April 2010). There is therefore low revenue
growth year on year, however as noted above, there were some key
contracts signed very recently, the impact of which is not fully
reflected in these results.
Storage Fusion made a small adjusted EBITDA loss in the period
of GBP0.1m (2010: adjusted EBITDA profit of GBP0.1m). The overhead
cost amounting to GBP0.2m was slightly increased on the prior year;
One key aspect of the Storage Fusion business is that any new sales
contracts won have a significant effect on profitability as there
is no direct cost of sale associated with the transaction.
Head office costs
Total head office costs in the period have reduced to GBP0.3m
from GBP0.8m in the previous comparative period. This is as a
result of closely monitoring, reviewing and cutting head office
costs. In addition, in 2010, there were a number of Directors on
the Board, following the Xploite transaction, who left at the end
of July 2010.
Inca software
Avisen disposed of Inca Software on 1 April 2011. The Inca
business comprised two acquisitions made in 2009 for a total
consideration of GBP4m in Avisen plc shares. Avisen plc was
approached in December 2010 with a cash offer for the business of
GBP7.3m (GBP6m on completion and GBP1.3m on 1 April 2012). The
overall gain on disposal following the write off of goodwill and
intangible assets of GBP7.6m was GBP0.4m.
The Board believed that it was in the best interests of the
shareholders to accept this offer. Our decision to accept the offer
was influenced by the constant margin pressure the division faced
and our concerns surrounding our ability to scale the business and
be up to date with the latest SaaS technologies without further
significant investment. We have used the cash to invest in both
Avisen and Storage Fusion and going forward will use it to invest
in 1Spatial, subject to the successful completion of the
Transaction.
In the two month period prior to disposal, Inca was break even
at a post-tax position.
Consolidated statement of financial position
The assets and liabilities of Inca are classified as 'Held for
sale' in the January 2011 numbers. Following the disposal of Inca
in April 2011, these assets and liabilities do not form part of the
Avisen group balance sheet as at 31 July 2011.
Non-current assets GBP3.1m at 31 July 2011 (GBP3.0m at 31
January 2011)
The main component of non-current assets is goodwill and
intangible assets in relation to the Storage Fusion business. The
main movements on the balance are capitalisation of research &
development costs of GBP0.2m and amortisation of GBP0.2m.
Current assets (including cash) of GBP8.2m (GBP1.6m at 31
January 2011)
Total current assets comprise trade and other receivables of
GBP5.3m (January 2011: GBP1.2m) and cash of GBP2.9m (January 2011:
GBP0.4m). The increase in trade and other receivables of GBP4.1m is
predominately due to an increase in trade receivables (mainly in
respect of the Unilever contract) and GBP1.3m of deferred
consideration receivable from the disposal of Inca.
The increase in the cash balance is due to the net proceeds
received on the sale of Inca less costs resulting from investment
in Avisen and Storage Fusion over the last few months. More details
on the cash flow are given below.
Current liabilities of GBP3.2m (GBP3.3m at 31 January 2011)
Following the receipt of the cash from the disposal of Inca,
trade and other payables have reduced by GBP0.1m. The group does
not have any current tax liabilities or borrowings at 31 July
2011.
Non-current liabilities of GBP0.3m (GBP0.3m at 31 January
2011)
At 31 July 2011, this balance relates to a deferred tax
liability of GBP0.3m. At 31 January 2011 this balance comprised
0.2m of deferred tax and GBP0.1m of borrowings (now repaid).
Share capital and reserves of GBP7.8m (GBP7.0m at 31 January
2011)
The only movement within share capital and reserves from January
2011 is the profit made by the group of GBP0.8m.
Statement of cashflows
The group had cash of GBP2.9m and no debt as at 31 July 2011 (31
January 2011: Net cash of GBP0.2m). The most significant inflow in
the period was the cash inflow from the sale of Inca of GBP5.4m
(after costs and net of cash balance transferred with Inca). The
main cash outflow in the period is with respect to operations, of
GBP2.9m. Following the receipt of the Inca cash we paid off certain
long-standing liabilities and used the remainder of the cash to
invest in securing the Unilever contract. The nature of our
business is that we have significant upfront costs in securing
contracts in terms of salary and wages costs of our consultants,
who will deliver the 'Proof of concept' to the client. In addition,
we encounter long credit terms with the majority of our customers,
which has a negative effect on working capital as the majority of
our costs are payable immediately. We also invested GBP0.2m in
research and development to continue our development of our SRA
software and portal in our Storage Fusion business.
Conclusion and outlook
We have had a successful trading performance during the period,
secured a number of key contracts and agreed the terms of an
exciting acquisition opportunity, which gives us a platform for
growth. We look forward to the future with confidence and, subject
to successful completion of the Transaction, we are excited about
the opportunity for the growth of the enlarged group as a combined
entity with 1Spatial, where there should be an ample opportunity
for mutual growth and increased shareholder value.
M Battles
Chairman
28 October 2011
Consolidated statement of comprehensive
income
6 months ended 31 July 2011 Unaudited Audited Unaudited
Six months Year
ended ended 31 Six months
31 July January ended
2011 2011 31 July 2010
Notes GBP'000 GBP'000 GBP'000
------------------------------------------ ------ ----------- ---------- --------------
Continuing operations
Revenue 2,628 2,631 1,736
Cost of sales (1,324) (1,940) (1,123)
------------------------------------------ ------ ----------- ---------- --------------
Gross profit 1,304 691 613
Administrative expenses (882) (8,465) (7,133)
------------------------------------------ ------ ----------- ---------- --------------
422 (7,774) (6,520)
Other operating income 8 - 2
Adjusted* EBITDA 615 (1,481) (452)
Less: depreciation (7) (5) -
----------- ---------- --------------
Adjusted* EBITA 608 (1,486) (452)
Less: amortisation and impairment of
intangible assets (178) (4,788) (4,765)
Less: strategic, integration and
other one off items 8 - (1,500) (1,301)
------------------------------------------ ------ ----------- ---------- --------------
Operating profit/(loss) 430 (7,774) (6,518)
Finance income - - -
Finance costs (8) (27) (9)
------------------------------------------ ------ ----------- ---------- --------------
Net finance costs (8) (27) (9)
Profit/(Loss) before tax 422 (7,801) (6,527)
Tax (charge)/credit (12) 159 74
------------------------------------------ ------ ----------- ---------- --------------
Profit/(Loss) from continuing operations 410 (7,642) (6,453)
========================================== ====== =========== ========== ==============
Discontinued operations
Profit/(Loss) from discontinued
operations 6 433 458 (124)
------------------------------------------ ------ ----------- ---------- --------------
Profit/(Loss) for the period 843 (7,184) (6,577)
========================================== ====== =========== ========== ==============
Other comprehensive income
Exchange differences on translating
foreign operations - (61) (46)
Gain on disposal of subsidiary
undertaking - 142 381
------------------------------------------ ------ ----------- ---------- --------------
Other comprehensive income for the period,
net of tax - 81 335
================================================== =========== ========== ==============
Total comprehensive income/(expense)
attributable to equity shareholders
of the company 843 (7,103) (6,242)
========================================== ====== =========== ========== ==============
* Adjusted for strategic, integration and other one off
items (note 8).
Earnings/(Loss) per ordinary share expressed in pence per
ordinary share from continuing operations:
Basic 3 0.18 (3.69) (3.45)
========================================== ====== =========== ========== ==============
Diluted 3 0.18 (3.69) (3.45)
========================================== ====== =========== ========== ==============
Earnings/(Loss) per ordinary share expressed in pence per
ordinary share from total operations:
Basic 3 0.41 (3.47) (3.52)
========================================== ====== =========== ========== ==============
Diluted 3 0.41 (3.47) (3.52)
========================================== ====== =========== ========== ==============
Adjusted Earnings/(Loss) per ordinary share expressed in pence per
ordinary share from continuing operations:
Basic 3 0.26 (0.65) (0.13)
========================================== ====== =========== ========== ==============
Diluted 3 0.26 (0.65) (0.13)
========================================== ====== =========== ========== ==============
Consolidated statement
of financial position
As at 31 July 2011 Unaudited Audited Unaudited
As at As at
As at 31 January 31 July
31 July 2011 2011 2010
Notes GBP'000 GBP'000 GBP'000
-------------------------------- ------ -------------------------------- ------------ --------------------------
Assets
Non-current assets
Intangible assets 9 869 858 2,606
Goodwill 9 2,156 2,156 8,149
Property, plant and
equipment 35 19 71
Total non-current assets 3,060 3,033 10,826
-------------------------------- ------ -------------------------------- ------------ --------------------------
Current assets
Trade and other receivables 5,325 1,179 6,505
Cash and cash equivalents 2,898 419 689
-------------------------------- ------ -------------------------------- ------------ --------------------------
Total current assets (excluding
assets of disposal group classified
as held for sale) 8,223 1,598 7,194
---------------------------------------- -------------------------------- ------------ --------------------------
Assets of disposal group classified
as held for sale - 10,242 -
---------------------------------------- -------------------------------- ------------ --------------------------
Total current assets 8,223 11,840 7,194
-------------------------------- ------ -------------------------------- ------------ --------------------------
Total Assets 11,283 14,873 18,020
-------------------------------- ------ -------------------------------- ------------ --------------------------
Liabilities
Current liabilities
Trade and other payables (3,175) (3,271) (8,164)
Current tax liabilities - - (431)
Borrowings - (44) (768)
Total current liabilities (excluding
liabilities of disposal group
classified as held for sale) (3,175) (3,315) (9,363)
---------------------------------------- -------------------------------- ------------ --------------------------
Liabilities of disposal group
classified as held for sale - (4,257) -
---------------------------------------- -------------------------------- ------------ --------------------------
Total current liabilities (3,175) (7,572) (9,363)
-------------------------------- ------ -------------------------------- ------------ --------------------------
Non-current liabilities
Borrowings - (62) (69)
Deferred tax (258) (232) (720)
Total non-current liabilities (258) (294) (789)
-------------------------------- ------ -------------------------------- ------------ --------------------------
Total liabilities (3,433) (7,866) (10,152)
Net assets 7,850 7,007 7,868
================================ ====== ================================ ============ ==========================
Share capital and reserves
Share capital 10 11,335 11,335 11,160
Share premium account 6,455 6,455 6,324
Own shares held (306) (306) -
Share based payment
reserve 387 387 904
Merger reserve 10,006 10,006 10,006
Reverse acquisition
reserve (11,584) (11,584) (11,584)
Currency translation
reserve (39) (39) (24)
Accumulated losses (8,404) (9,247) (8,918)
Total equity attributable to
shareholders of the parent 7,850 7,007 7,868
======================================== ================================ ============ ==========================
Consolidated statement of changes in equity
Period ended 31 July 2011 Share
Share Own based Reverse Currency
Share premium shares payments Merger acquisition translation Accumulated
GBP'000 capital account held reserve reserve reserve reserve losses Total
Balance at 1 February 2010 7,162 6,463 - 951 4,830 11,584 22 (2,722) 5,122
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Comprehensive income
Loss for the year - - - - - - - (7,184) (7,184)
Other comprehensive income/(expense)
Gain on disposal of subsidiary - - - (122) - - - 142 20
Exchange differences on translating foreign
operations - - - - - - (61) - (61)
Total other comprehensive income/(expense) - - - (122) - - (61) 142 (41)
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Total comprehensive expense - - - (122) - - (61) (7,042) (7,225)
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Transactions with owners
Shares issued in the year 4,173 (8) - 75 - - - - 4,240
Premium on issuance of share to acquire
subsidiary - - - - 5,176 - - - 5,176
Transfer on lapse of share based payment - - - (517) - - - 517 -
Shares held in treasury resulting from
disposal of subsidiary - - (306) - - - - - (306)
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
4,173 (8) (306) (442) 5,176 - - 517 9,110
----------------------------------------------- -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Balance at 31 January 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (9,247) 7,007
================================================ ======== ======== ======= ========= ======== ============ ============ ============ ========
Balance at 1 February 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (9,247) 7,007
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Comprehensive income
Profit for the year - - - - - - - 843 843
Total comprehensive income - - - - - - - 843 843
------------------------------------------------ -------- -------- ------- --------- -------- ------------ ------------ ------------ --------
Balance at 31 July 2011 11,335 6,455 (306) 387 10,006 (11,584) (39) (8,404) 7,850
================================================ ======== ======== ======= ========= ======== ============ ============ ============ ========
Consolidated statement of
cashflows
Period ended 31 July 2011 Unaudited Audited Unaudited
31 July 31 January 31 July
2011 2011 2010
Notes GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ---------- ----------- ----------
Cash flows from operating
activities
Cash used in from operations a) (2,933) (604) (1,217)
Interest paid (25) (142) (69)
Tax received/(paid) 151 (77) -
Net cash used in operating
activities (2,807) (823) (1,286)
------------------------------------------------- ---------- ----------- ----------
Cash flows from investing
activities
Acquisition of subsidiaries - 2,291 2,134
Disposal of subsidiaries - (405) (533)
Cash received on disposal
of subsidiary* 5,404 - -
Purchase of intangible assets (3) - -
Purchase of property, plant and
equipment (23) (175) (28)
Expenditure on product development (185) (185) -
Proceeds from sale of property,
plant and equipment 4 - 66
Net cash generated from investing
activities 5,197 1,526 1,639
------------------------------------------------- ---------- ----------- ----------
Cash flows from financing
activities
Increase in overdraft - - (19)
Decrease/(Increase) in factoring
account 121 (144) 330
Finance lease principal payments - (7) -
Repayment of borrowings (106) (250) (158)
Net cash generated from/(used
in) financing activities 15 (401) 153
------------------------------------------------- ---------- ----------- ----------
Net increase in cash and cash equivalents 2,405 302 506
Cash and cash equivalents
at start of period 493 183 183
Effects of foreign exchange - 8 -
Cash and cash equivalents
at end of period 2,898 493 689
------------------------------------------------- ---------- ----------- ----------
Classified as:
Current assets 2,898 419 689
Assets held for sale - 74 -
------------------------------------------------- ---------- ----------- ----------
*Net of disposal costs and cash balance disposed.
Cash flows from discontinued operations can be summarised for
each of the main cash flow headings as follows:
31 July 31 January 31 July
2011 2011 2010
GBP'000 GBP'000 GBP'000
-------------------------------------- -------- ----------- --------
Cash flows from operating activities
Net cash generated from/(used in)
operating activities (143) 380 172
-------------------------------------- -------- ----------- --------
Cash flows from investing activities
Net cash generated from/(used in)
investing activities 5,381 (571) (556)
-------------------------------------- -------- ----------- --------
Cash flows from financing activities
Net cash generated from/(used in)
financing activities 121 (244) 330
-------------------------------------- -------- ----------- --------
Unaudited Audited Unaudited
As at 31 As at 31 As at 31
a) Cash used in operations July 2011 January 2011 July 2010
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------- -------------- -----------
Continuing operations
Profit/(loss) before tax 422 (7,801) (6,527)
Adjustments for:
Finance cost - net 8 27 9
Depreciation charge 7 5 -
Amortisation and impairment 178 4,788 4,767
(Increase)/Decrease in trade and other
receivables (2,983) 3,123 (1,053)
(Decrease )/Increase in trade and other
payables (439) (1,268) 1,346
Cash used in continuing operations (2,807) (1,126) (1,458)
--------------------------------------------- ----------- -------------- -----------
Discontinued operations
Net (loss)/profit before tax (12) 348 (124)
Adjustments for:
Finance cost - net 17 115 60
Depreciation charge 19 64 21
Amortisation and impairment 68 406 -
(Decrease)/Increase in trade and other
receivables (137) (489) 326
(Decrease)/increase in trade and other
payables (81) 78 4
Foreign currency adjustment - - (46)
--------------------------------------------- ----------- -------------- -----------
Cash generated from discontinued operations (126) 522 241
--------------------------------------------- ----------- -------------- -----------
Cash used in operations (2,933) (604) (1,217)
--------------------------------------------- ----------- -------------- -----------
b) Reconciliation of net cash flow to movement in net funds
Audited Unaudited
Unaudited As at As at
As at 31 January 31 July
31 July 2011 2011 2010
GBP'000 GBP'000 GBP'000
------------------------------------------------ -------- ------------ ------------
Increase in cash in the year 2,405 302 506
Net cash inflow from increase in bank
loans and overdrafts including factoring 106 250 130
Net cash outflow in respect of overdraft - - 20
Net cash inflow in respect of factoring (121) 144 (330)
Cash outflow in respect of finance
leases - 7 27
------------------------------------------------ -------- ------------ ------------
Changes resulting from cash flows 2,390 703 353
Loans and finance leases acquired with
subsidiary - - (21)
Factoring disposed with Inca 277 - -
Effect of foreign exchange - 8 -
------------------------------------------------ -------- ------------ ------------
Change in net funds 2,667 711 332
Net funds/(debt) at beginning of period 231 (480) (480)
------------------------------------------------
Net funds at end of period 2,898 231 (148)
------------------------------------------------ -------- ------------ ------------
Analysis of net funds/(debt)
Cash and cash equivalents
- Current assets 2,898 419 689
- Assets held for sale - 74 -
Hire purchase and finance lease obligations - - (2)
Factoring account - (156) (630)
Bank loans and overdraft - (106) (205)
Net funds/(debt) at end of period 2,898 231 (148)
------------------------------------------------ -------- ------------ ------------
1 Principal activity
Avisen plc is a public limited company which is listed on the
AIM London Stock Exchange and is incorporated and domiciled in the
UK. The address of the registered office is 20 Station Road,
Gerrards Cross, Buckinghamshire, SL9 8EL. The registered number of
the company is 5429800.
The principal activity of the group is a management consultancy
and software business that provides companies with advice and
solution in order to enhance overall profitability.
2 Basis of preparation
The interim results for the six months ended 31 July 2011, have
been prepared on the going concern basis, which assumes that the
Group will continue in operational existence for the foreseeable
future.
The accounting policies applied in the interim consolidated
financial information are consistent with those of the annual
financial statements for the year ended 31 January 2011 as
described in those financial statements except for the impact of
the standards applicable for the current financial position
described below:
New and amended standards adopted by the Group
The following new standards and amendments to standards are
mandatory for the first time for the financial year The accounting
policies applied in the interim consolidated financial information
are consistent with those of the annual financial statements for
the year ended 31 January 2011 as described in those financial
statements except for the impact of the standards applicable for
the current financial position described below:
-- Taxes on income in the interim periods are accrued using the
tax rate that would be applicable to expected total annual profit
or loss.
The following amendments to existing standards and new
interpretations became effective during the current period, but
have no significant impact on the Group's financial statements: --
'Improvements to International Financial Reporting Standards 2010';
-- IAS 24 (Revised), 'Related party disclosures'; -- IAS 32
(Amendment), 'Financial instruments: Presentation on classification
of rights issues'; -- IFRIC 14 (Amendment), 'IAS 19 - Prepayments
of a minimum funding requirement'; -- IFRIC 19, 'Extinguishing
financial liabilities with equity instruments'.
3 Earnings/Loss per share
Basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to equity holders of the company by the
weighted average number of ordinary shares in issue during the
period.
Unaudited Audited Unaudited
Six months ended Year ended 31 January Six months ended 31
31 July 2011 2011 July 2010
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Earnings/(Loss)
attributable
to equity
holders 410 433 843 (7,642) 458 (7,184) (6,453) (124) (6,577)
Adjustments:
Amortisation
of intangible
assets 178 68 246 4,788 - 4,788 4,765 - 4,765
Integration,
strategic and
one off costs - - - 1,500 232 1,732 1,453 322 1,775
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Adjusted
earnings/(loss) 588 501 1,089 (1,354) 690 (664) (235) 198 (37)
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Basic
earnings/(loss)
per share 0.18 0.19 0.37 (3.69) 0.22 (3.47) (3.45) (0.07) (3.52)
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Diluted
earnings/(loss)
per share 0.18 0.19 0.37 (3.69) 0.22 (3.47) (3.45) (0.07) (3.52)
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Adjusted basic
earnings/(loss)
per share 0.26 0.22 0.48 (0.65) 0.33 (0.32) (0.13) 0.11 (0.02)
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Adjusted diluted
earnings/(loss)
per share 0.26 0.22 0.48 (0.65) 0.33 (0.32) (0.13) 0.11 (0.02)
----------------- ----------- ------------- -------- ----------- ------------- -------- ----------- ------------- --------
Number Number Number
000's 000's 000's
Basic weighted average number
of shares 226,700 206,977 186,928
Impact of share options and - 689 -
warrants
--------------------------------------------- -------- ----------- ------------- -------- ----------- ------------- --------
Diluted weighted average number
of shares 226,700 207,666 186,928
--------------------------------------------- -------- ----------- ------------- -------- ----------- ------------- --------
4 Nature of financial information
The interim information set out above is neither audited nor
reviewed and does not represent the statutory financial statements
within the meaning of section 435 of the Companies Act 2006 for
Avisen plc or for any of the entities comprising the Avisen Group
for the period ended 31 July 2011.
The statutory financial statements for the preceding financial
year ended 31 January 2011 were filed with the Registrar and
included an unqualified auditors' report.
5 Dividends
No dividend is proposed for the six months ended 31 July 2011
(31 January 2011: nil; 31 July 2010: nil).
6 Segmental information
6 months ended 31 July 2011 Head office Avisen Storage Fusion Total
GBP'000 GBP'000 GBP'000 GBP'000
Continuing operations
Revenue - 2,452 176 2,628
Less: intersegment sales - - - -
------------------------------------- --------------- -------------- ------------- ------------------ -----------
Total revenue from third parties - 2,452 176 2,628
Cost of sales - (1,313) (11) (1,324)
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Gross profit - 1,139 165 1,304
Total administrative expenses (350) (135) (397) (882)
Other operating income 8 - - 8
Adjusted EBITDA (341) 1,011 (55) 615
Less: depreciation (1) (3) (3) (7)
-------------- ------------- ------------------ -----------
Adjusted EBITA (342) 1,008 (58) 608
Less: amortisation and impairment of
intangible assets - (4) (174) (178)
Less: strategic, integration and
other one off items - - - -
------------------------------------- --------------- -------------- ------------- ------------------ -----------
Total operating profit/(loss) (342) 1,004 (232) 430
Finance income - - - -
Finance cost (3) (5) - (8)
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Finance cost - net (3) (5) - (8)
Profit/(Loss) before income tax
credit/(charge) (345) 999 (232) 422
Tax credit/(charge) - 14 (26) (12)
Profit/(Loss) for the period from
continuing operations (345) 1,013 (258) 410
Loss for the period from discontinued
operations - - - 433
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Total profit/(loss) for the period (345) 1,013 (258) 843
========================================= =========== ============== ============= ================== ===========
Inca
GBP'000
Discontinued operations
Revenue 1,145
Less: intersegment sales (3)
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Total revenue from third parties 1,142
Cost of sales (722)
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Gross profit 420
Total administrative expenses (415)
Adjusted EBITDA 92
Less: depreciation (19)
-----------
Adjusted EBITA 73
Less: amortisation and impairment of intangible
assets (68)
Less: strategic, integration and -
other one off items
------------------------------------- --------------- -------------- ------------- ------------------ -----------
Total operating profit 5
Finance cost - net (17)
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Loss before tax (12)
Tax credit -
------------------------------------- --------------- -------------- ------------- ------------------ -----------
Loss from discontinued activities (12)
Gain on disposal (see note 7) 445
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
Profit for the period 433
----------------------------------------- ----------- -------------- ------------- ------------------ -----------
12 months ended 31 January 2011 Head office Avisen Storage Fusion Total
GBP'000 GBP'000 GBP'000 GBP'000
Continuing operations
Revenue - 2,597 230 2,827
Less: intersegment sales - (196) - (196)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Total revenue from third parties - 2,401 230 2,631
Cost of sales - (1,940) - (1,940)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Gross profit - 461 230 691
Total administrative expenses (7,221) (559) (685) (8,465)
Adjusted EBITDA (1,293) (61) (127) (1,481)
Less: depreciation - - (5) (5)
Adjusted EBITA (1,293) (61) (132) (1,486)
Less: amortisation and impairment of
intangible assets (4,500) (25) (263) (4,788)
Less: strategic, integration and other
one off items (1,428) (12) (60) (1,500)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Total operating loss (7,221) (98) (455) (7,774)
Finance income - - - -
Finance cost (7) (20) - (27)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Finance cost - net (7) (20) - (27)
Loss before income tax credit (7,228) (118) (455) (7,801)
Tax credit - 137 22 159
----------------------------------------- ---------------- -------------- --------------------- ---------------
(Loss)/profit for the year from
continuing operations (7,228) 19 (433) (7,642)
Loss for the period from discontinued
operations - - - 458
----------------------------------------- ---------------- -------------- --------------------- ---------------
Total (loss)/profit for the period (7,228) 19 (433) (7,184)
========================================= ================ ============== ===================== ===============
Inca South Africa Total
GBP'000 GBP'000 GBP'000
Discontinued operations
Revenue 9.095 643 9,738
Less: intersegment sales (19) (9) (28)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Total revenue from third parties 9,076 634 9,710
Cost of sales (5,551) (664) (6,215)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Gross profit/(loss) 3,525 (30) 3,495
Total administrative expenses (2,858) (179) (3,037)
Other operating income 4 1 5
Adjusted EBITDA 1,373 (208) 1,165
Less: depreciation (64) - (64)
Adjusted EBITA 1,309 (208) 1,101
Less: amortisation and impairment of
intangible assets (406) - (406)
Less: strategic, integration and other
one off items (232) - (232)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Total operating profit/(loss) 671 (208) 463
Finance income - - -
Finance cost (115) - (115)
----------------------------------------- ---------------- -------------- --------------------- ---------------
Finance cost - net (115) - (115)
Profit/(Loss) before tax 556 (208) 348
Tax credit 110 - 110
----------------------------------------- ---------------- -------------- --------------------- ---------------
Profit/(loss) from discontinued
activities 666 (208) 458
----------------------------------------- ---------------- -------------- --------------------- ---------------
6 months ended 31 July 2010 Head office Avisen Storage Fusion Total
GBP'000 GBP'000 GBP'000 GBP'000
Continuing operations
Revenue - 1,822 92 1,914
Less: intersegment sales - 178 - 178
----------------------------------- ------------ --------- --------------- ---------
Total revenue from third parties - 1,644 92 1,736
Cost of sales - (1,055) (68) (1,123)
----------------------------------- ------------ --------- --------------- ---------
Gross profit - 589 24 613
Total administrative expenses (6,616) (327) (190) (7,133)
Other operating income - 2 - 2
Adjusted EBITDA (815) 284 79 (452)
Less: depreciation - - - -
------------ --------- --------------- ---------
Adjusted EBITA (815) 284 79 (452)
Less: amortisation and impairment
of intangible assets (4,500) (20) (245) (4,765)
Less: strategic, integration
and other one off items (1,301) - - (1,301)
----------------------------------- ------------ --------- --------------- ---------
Total operating (loss)/profit (6,616) 264 (166) (6,518)
- -
Finance income - - - -
Finance cost (1) (8) - (9)
----------------------------------- ------------ --------- --------------- ---------
Finance cost - net (1) (8) - (9)
(Loss)/Profit before income
tax credit (6,617) 256 (166) (6,527)
Tax credit 74 - - 74
----------------------------------- ------------ --------- --------------- ---------
(Loss)/Profit for the period
from continuing operations (6,543) 256 (166) (6,453)
(Loss)/Profit for the period
from discontinued operations 254 (378) - (124)
----------------------------------- ------------ --------- --------------- ---------
Total loss for the period (6,289) (122) (166) (6,577)
=================================== ============ ========= =============== =========
Inca South Africa Total
GBP'000 GBP'000 GBP'000
Discontinued operations
Revenue 4,359 634 4,993
Less: intersegment sales (41) - (41)
----------------------------------- ------------ --------- --------------- ---------
Total revenue from third parties 4,318 634 4,952
Cost of sales (2,876) (664) (3,540)
----------------------------------- ------------ --------- --------------- ---------
Gross profit/(loss) 1,442 (30) 1,412
Total administrative expenses (1,128) (349) (1,477)
Other operating income - 1 1
Adjusted EBITDA 487 (208) 279
Less: depreciation (21) - (21)
--------- --------------- ---------
Adjusted EBITA 466 (208) 258
Less: amortisation and impairment
of intangible assets - - -
Less: strategic, integration
and other one off items (152) (170) (322)
----------------------------------- ------------ --------- --------------- ---------
Total operating (loss)/profit 314 (378) (64)
Finance income - - -
Finance cost (60) - (60)
----------------------------------- ------------ --------- --------------- ---------
Finance cost - net (60) - ((60)
(Loss)/Profit before tax 254 (378) (124)
Tax credit - - -
----------------------------------- ------------ --------- --------------- ---------
(Loss)/profit from discontinued
activities 254 (378) (124)
----------------------------------- ------------ --------- --------------- ---------
7 Discontinued operations
On 1 April 2011 the group transferred its entire interest in Ina
Software Limited (Inca), to Logicalis UK Limited for GBP7.3m GBP6m
was received in cash on completion and GBP1.3m is due to be
received on 1 April 2012. There are no conditions attached to the
receipt of the GBP1.3m.
The results of Inca were reported in the financial statements
for the year ended 31 January 2011 as discontinued following their
agree disposal in January 2011. Details of the financial
performance are set out within the discontinued segmental analysis
in note 6.
The assets and liabilities disposed were:
GBP'000
Goodwill and intangibles 7,630
Property, plant and equipment 125
-------------------------------------- --------
Total non-current assets 7,755
Trade and other receivables 2,458
Cash and cash equivalents 50
-------------------------------------- --------
Total current assets 2,508
Total assets 10,263
-------------------------------------- --------
Trade and other payables (3,599)
Current and deferred tax liabilities (421)
-------------------------------------- --------
Total current liabilities (4,020)
-------------------------------------- --------
Non-current liabilities
Borrowings (277)
-------------------------------------- --------
Total non-current liabilities (277)
-------------------------------------- --------
Total liabilities (4,297)
-------------------------------------- --------
Net assets 5,966
-------------------------------------- --------
The gain on disposal as shown within equity is as follows:
GBP'000
Consideration received or receivable:
Cash consideration 6,000
Deferred consideration 1,300
---------------------------------------- --------
Total consideration 7,300
Disposal costs (889)
---------------------------------------- --------
Net consideration received 6,411
Carrying amount of net assets disposed (5,966)
---------------------------------------- --------
Gain on sale before income tax 445
Income tax expense* -
---------------------------------------- --------
Gain on disposal after income tax 445
---------------------------------------- --------
*No income tax is due, as gain is subject to Substantial
Shareholder Exemption (SSE).
8 Strategic, integration and other one off items
In accordance with the group's policy for strategic, integration
and other one off items, the following charges were included in
this category for the period:
Six months Year ended Six months
ended 31 31 January ended 31
July 2011 2011 July 2010
Continuing operations GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ ------------ -----------
Strategic costs - 496 410
Costs of duplication and integration - 1,004 891
-------------------------------------- ------------ ------------
Total - continuing operations - 1,500 1,301
-------------------------------------- ------------ ------------ -----------
Discontinued operations
Costs of duplication and integration - 232 322
Total - discontinued operations - 232 322
-------------------------------------- ------------ ------------ -----------
Total - 3,232 2,924
-------------------------------------- ------------ ------------ -----------
9 Intangible assets including goodwill
At 31 July 2011 Customer
and related Development
Goodwill Brands contracts Software costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- -------- ------------- ---------- ------------- --------
Cost
At 1 February 2011 12,849 252 1,852 944 595 16,492
Additions - - - 3 185 188
Disposals (6,193) (252) (1,852) - - (8,297)
At 31 July 2011 6,656 - - 947 780 8,383
------------------------ ---------- -------- ------------- ---------- ------------- --------
Accumulated impairment
and amortisation
At 1 February 2011 4,500 53 545 243 438 5,779
Amortisation - 7 62 154 238 246
Disposals - (60) (607) - - (667)
At 31 July 2011 4,500 - - 397 461 5,358
------------------------ ---------- -------- ------------- ---------- ------------- --------
Net book amount at 31
July 2011 2,156 - - 550 319 3,025
------------------------ ---------- -------- ------------- ---------- ------------- --------
At 31 January 2011 Customer
and related Development
Goodwill Brands contracts Software costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- -------- ------------- ---------- ------------- --------
Cost
At 1 February 2010 7,417 252 1,852 23 410 9,954
Additions 5,632 - - 921 185 6,738
Disposals (200) - - - - (200)
At 31 January 2011 12,849 252 1,852 944 595 16,492
------------------------ ---------- -------- ------------- ---------- ------------- --------
Accumulated impairment
and amortisation
At 1 February 2010 - 17 175 - 393 585
Amortisation - 36 370 243 28 677
Impairment 4,500 - - - 17 4,517
At 31 January 2011 4,500 53 545 243 438 5,779
------------------------ ---------- -------- ------------- ---------- ------------- --------
Net book amount at 31
January 2011 8,349 199 1,307 701 157 10,713
------------------------ ---------- -------- ------------- ---------- ------------- --------
Classified as follows:
Non-current assets 2,156 - - 701 157 3.014
------------------------ ---------- -------- ------------- ---------- ------------- --------
Assets held for sale 6,193 199 1,307 - - 7,699
------------------------ ---------- -------- ------------- ---------- ------------- --------
10 Share capital
As at 31 July As at 31 January
2011 2011
GBP'000 GBP'000
---------------------------------------------- -------------- -----------------
Authorised
233,469,964 (Jan 2011: 233,469,964) ordinary
shares of 5p each 11,673 11,673
---------------------------------------------- -------------- -----------------
Allotted, called up and fully paid
226,699,878 (Jan 2011: 226,699,878) ordinary
shares of 5p each 11,335 11,335
---------------------------------------------- -------------- -----------------
11 Post balance sheet events
On 7 October 2011 the company announced the proposed Transaction
to acquire the entire issued share capital of 1Spatial for GBP4.7m
to be satisfied by the issue of shares in Avisen. Subject to
various approvals, the scheme should become effective on 25
November 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLFLFBFLFBE
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