RNS Number:3683D
Horizon Technology Group PLC
06 September 2007
Horizon Technology Group plc
Interim Results for the six months to 30 June 2007
EBIT growth of 27%
Horizon Technology Group plc, a leading system integrator and distributor of
information technology products in the UK and Ireland, announces its interim
results for the six months to 30 June 2007.
H1 2007 H1 2006
H1 2007 Financial highlights Euro'000 Euro'000 Change
Revenue 146,305 131,220 11%
Gross profit 27,086 18,799 44%
Gross margin % 18.5% 14.3%
EBIT 4,688 3,703 27%
EBIT as a % of revenue 3.2% 2.8%
PBT 3,913 3,127 25%
PBT as a % of revenue 2.7% 2.4%
Diluted adjusted EPS (Euro cent)* 5.11 cent 4.21 cent 21%
*Diluted adjusted EPS represents earnings based on 79,886,000 shares and profit
after tax adjusted for unwinding of discount factor, amortisation of
intangibles, material items & discontinued operations.
The first half of 2007 was a period of continued and significant progress,
financially and strategically:
Financial highlights:
* Revenue increased 11%; Gross profit increased 44%
* EBIT increased 27% - EBIT margin increased 40 basis points to 3.2%
* Diluted EPS increased 21%
* Strong cash conversion in the first half - 167% of EBITA
* Compound EPS growth of 27% since 2003
Strategic highlights:
* Increasing services orientation within Horizon's business:
* 78% growth in application consulting and services earnings
* One third of group earnings now comes from application consulting and
services
* Delivering earnings growth from acquisitions
* Maintaining high market share with existing key vendors
* Profitably building market share with new vendor partners
* Investing & developing in new partnerships
The results reflect continued earnings improvement, increased financial capacity
and the group's ability to deliver performance and growth.
Gary Coburn, Horizon's Chief Executive Officer, said:
"We are encouraged by the growth in our enterprise application and services
businesses in the six months, which now represent a third of the group's
earnings. Our enterprise infrastructure division continues to diversify its
revenue base and improve expense productivity. The successful integration of
acquisitions completed in 2006 and our increased services orientation is
delivering performance and growth."
Cathal O'Caoimh, Horizon's Chief Financial Officer, noted:
"We are pleased to report another period of progress against every financial
measure. EBIT is up by 27% and operating margins up 40 bps to 3.2%. Very
positive cash flow generated Euro8.8m funds from operations and eliminated net debt
at the period end. Horizon is well positioned, both operationally and
financially, to deliver continued earnings growth."
For further information please contact:
Horizon Technology Group plc
Gary Coburn, Chief Executive Officer
Cathal O'Caoimh, Chief Financial Officer
353 1 620 4900
K Capital Source
Mark Kenny/Jonathan Neilan
353 1 631 5500
ABOUT HORIZON
Horizon Technology Group plc is a leading technical integrator and distributor
of information technology products in the UK and Ireland. For more information
about Horizon Technology Group plc, visit www.horizon.ie.
RESULTS OVERVIEW
In the first six months of 2007, Horizon continued its track record of
delivering strong growth in earnings and made significant progress towards its
strategic objectives. The group's focus on higher margin, services rich
enterprise solutions helped to increase EBIT margin from 2.8% to 3.2%, thereby
delivering 27% growth in EBIT and 21% growth in diluted adjusted EPS.
The enterprise applications and services (EAS) division increased earnings by
78% year-on-year and generated one third of the group's earnings. In addition,
the services content within enterprise infrastructure and services (EIS)
operations continued to grow profitability. The expansion of services within
the group's Irish operations means that 58% of group's profits were generated in
Ireland in the period.
Other strategic objectives that the group has delivered on over the last six
months include:
* Driving earnings growth in businesses acquired in 2006 - the acquisitions,
EquIP, EPC and WBT, are delivering earnings ahead of expectations.
* Building market share with new vendor partners - the group's market share
with IBM, EMC, Oracle and Tandberg have all grown during the period.
* Maintaining high market share with existing key vendors - Horizon is the
number one channel partner in the UK for each of Sun Microsystems, Nortel
Networks (data products), Juniper Networks and F5 Networks.
* Investment and development of new partnerships - the group's new
developments with Oracle and EMC have produced consistent improvements in
performance.
A financial summary of the results achieved in the first half of 2007 is as
follows:
H1 2007 H1 2006
H1 2007 Financial highlights Euro'000 Euro'000 Change
Revenue 146,305 131,220 11%
Gross profit 27,086 18,799 44%
Gross margin % 18.5% 14.3%
EBIT 4,688 3,703 27%
EBIT as a % of revenue 3.2% 2.8%
PBT 3,913 3,127 25%
PBT as a % of revenue 2.7% 2.4%
Diluted adjusted EPS (Euro cent)* 5.11 cent 4.21 cent 21%
*Diluted adjusted EPS represents earnings based on 79,886,000 shares and profit
after tax adjusted for unwinding of discount factor, amortisation of
intangibles, material items & discontinued operations.
Revenue grew 11% year-on-year and an increasing portion of this revenue was
services based. This trend led to a 44% growth in gross profit and an increase
in gross margin from 14.3% to 18.5%, the highest first-half gross margin
recorded by the group. The increase in gross margin is even more apparent if
compared to the first half of 2006 including the volume distribution business
that was sold late in 2006 - it would be up from 11.5% in the first half of 2006
to 18.5% in the first half of 2007.
The group continued its focus on cost control and efficiency gains during this
period, maintaining very high consultant utilisation rates. The increase in
services revenue and the group's investment in new partnerships have a direct
impact on headcount and cost structure. Average headcount was 331 in the
six-months to June 2007, up from 243 the previous year. The growth is primarily
in revenue generating technical consultants and sales personnel and includes the
full impact of acquisitions completed in 2006.
Horizon continues to be very active in identifying, analysing and negotiating
potential acquisition opportunities in the services and software sectors in
Ireland and in the enterprise infrastructure sector in the UK. While there are
many excellent businesses available on the market, even a few that are
strategically very interesting to Horizon, the group has declined to pay
uneconomic profit multiples and will continue to seek the right acquisitions at
the right price so as to protect and generate value for Horizon's shareholders.
The group's cash flow and financial position was further strengthened during the
first half. Net cash at 30 June 2007 was Euro1.0m, a significant improvement from
net debt of Euro7.0m at 31 December 2006. Cash flow generated from operations
amounted to Euro8.8m or 167% of trading profit in the period. Working capital was
particularly low at 30 June 2007 - working capital velocity increased from 6.4
to 10.4 times, equivalent to a reduction in working capital days from 24 to 15.
Horizon has significant financial capacity and substantial unused credit
facilities available.
MARKET REVIEW
In the first half of 2007, the enterprise solutions markets in both the UK and
Ireland showed solid revenue growth with increased outsourcing by organisations,
driven by the desire to remain focused on their core business and to retain
flexibility in their workforce. As a result, the Irish market for consulting
services has experienced an increase in demand with market revenues increasing
in double-digit percentages. The UK and Irish enterprise infrastructure markets
are growing, albeit in single digit percentages. There is also continuing
growth-based investment particularly for project services. The intense
competition within the market continues - both between IT vendors and within the
channel.
STRATEGY
Horizon's objective and strategy remain constant - to deliver shareholder value
through the development of the business as a technical integrator and
distributor of information technology products in the UK and Ireland. The
group's focus is to generate long-term, consistent growth in shareholder value
by investing resources judiciously to capitalise upon future growth
opportunities while maintaining a strong financial position. The board
periodically reviews all options available to proactively maximise shareholder
value.
Geographically, Horizon will continue to supply a wide range of IT services and
products within the Irish market and, in the UK, focus on the provision of
enterprise solutions in partnership with system integrators and leading global
IT vendors.
Growth in earnings will be delivered by:
* An increasing services orientation within Horizon's business
* Maintaining high market share with existing key vendors
* Profitably building market share with new vendor partners
* Select acquisition opportunities; and
* Capitalising on Horizon's operational gearing
The group will continue to monitor the IT markets in the UK and Ireland to
identify new opportunities to deliver profitable growth through either bolt-on
acquisition or organic development, while continuing to develop existing
businesses to enhance profitability and cash flow.
The group will continue to develop its strong market positions and deepen
relationships with customers and vendors and to invest resources in the on-going
development of a highly motivated team of professionals dedicated to the
continued success of the business.
OUTLOOK
The directors anticipate that the market for IT consulting services in Ireland
will continue to show revenue growth. The recent growth experienced in the
enterprise infrastructure market will persist, albeit in single digit
percentages and with modest pressure on margins, in line with previous
expectations. The demand for growth-based investment in technology by large
corporate customers will vary by industry sector and is likely to be strong in
the financial services and government sectors.
Horizon's organic revenue growth will be dependent on market growth rates, the
pace of organic development and the extent to which major IT vendors outsource
to their channel. As global IT vendors focus on their own internal core
competencies and cost controls, they are increasingly outsourcing technical
services, marketing and supply chain functions to channel partners. Horizon is
uniquely positioned to address these market trends.
Over 80% of group revenue derives from the UK and this is likely to increase in
the future given the size of the potential market. The group's services rich
businesses are concentrated in Ireland and therefore a high portion of profits
will continue to be generated in Ireland.
Through rigorous cost control, operational leverage and focus on higher margin,
services rich enterprise solutions, the group is well positioned to deliver
superior returns to shareholders.
Samir Naji
Chairman
6 September 2007
OPERATING REVIEW
for the six months to 30 June 2007
DIVISIONAL ANALYSIS
The group operates through two separate geographic divisions - Ireland and the
UK. It supplies a wide range of IT services and products within the Irish market
and, in the UK, focuses on the provision of enterprise solutions in partnership
with system integrators and leading global IT vendors.
IRELAND
In Ireland the group operates in the enterprise solutions market and assists
customers in implementing IT strategies through the provision of IT
infrastructure, applications software development, implementation consulting and
support services. Its customer base is predominantly comprised of blue-chip
companies. The division includes the Irish enterprise application and services
(EAS) business and the Irish enterprise infrastructure and services (EIS)
businesses. It has a current full time equivalent staff count of 149 employees.
IRELAND
Six months to Six months to Six months to
30 June 2007 31 Dec 2006 30 June 2006
Euro'000 Euro'000 Euro'000
Revenue 27,870 29,372 30,602
Gross profit 12,265 11,584 8,460
Gross profit margin 44.0% 39.4% 27.6%
Trading profit 3,947 3,375 2,708
Percentage margin 14.2% 11.5% 8.8%
The group's Irish revenue, at Euro27.9m, is down 8.9% on the corresponding period
of 2006 but a change in mix towards higher-margin services businesses has
increased gross margin from 27.6% to 44.0% and gross profit has increased by
45.0% to Euro12.3m. Similarly, trading profit, at Euro3.9m, has grown 45.8% relative
to the same period last year and trading profit margin is up from 8.8% to 14.2%.
Horizon's Irish enterprise applications and services operation (EAS) delivered
78% growth in earnings in the first half. The consulting business has built on
its market-leading position by delivering growth in each of the segments in
which it operates:
* Business Intelligence - Client Solutions is the leading business
intelligence provider in the Irish market and continues to experience
strong growth in demand. The government and finance sectors continued to be
strong and wins included contracts in Ulster Bank, Bord Gais and the
Department of Agriculture and Food.
* Application Development - continues to meet the software development needs
of some of Ireland's largest enterprises. The core services provided
include turnkey solution delivery from analysis to design to post
implementation support, technical consultancy services and project
management consultancy services. Horizon also offers a suite of application
lifecycle management tools that enable customers to meet compliance
requirements and to streamline their own internal software development
processes. Some successful solution deployments in the last six months
include projects in Irish Life and Permanent and O2.
* Enterprise Resource Planning - The combined SAP operations of Client
Solutions and EPC, acquired in 2006, continues to perform ahead of
expectations. It is now the only Irish indigenous mySAP-consulting partner
and has won a number of new consulting contracts. Demand for SAP project
services continued to experience growth, which was apparent both in existing
customer upgrades and in new implementations.
* Business Service Management (BSM) - continues to develop satisfactorily in
partnership with BMC and its products, including Remedy. This partnership,
which began in 2004, continues to drive Horizon's services footprint in the
data centres of Ireland's largest companies, with a broad customer base in
financial institutions and telecommunications sectors in particular, on
both mainframe and UNIX platforms. This unit provides a complete range of
BMC Software services including sales, consulting, implementation and
support to existing and new BMC Software customers. BSM is a fast-growing
segment of the IT market and continues to represent an exciting opportunity
for the group.
* Learning Management Solutions - Since its acquisition in August 2006, WBT
has performed ahead of expectation with new contract wins in both the US
and Europe. WBT Systems helps organisations implement advanced learning and
performance enhancement solutions. WBT has over one million licensed users
across the globe and has built a strong revenue stream of services into its
enterprise customer base.
In Ireland, Horizon Open Systems, the group's enterprise infrastructure and
services business (EIS) is a channel partner of Sun Microsystems which
specialises in the provision of infrastructure and professional services to
blue-chip enterprises, government departments and global systems integrators.
While overall revenue in the Irish EIS operation declined, an increased services
orientation within the business delivered growth in earnings.
The sectors of the market in which the group has seen growth over the last year
in its Irish EIS operation include telecommunications, finance and government. A
sample of the Horizon customer base, by sector includes:
* Telecommunications: O2, Vodafone and Eircom Group.
* Public sector: Revenue Commissioners, the Department of the Environment,
Heritage and Local Government and the Department of Justice, Equality and
Law Reform.
* Finance sector: Irish Life and Permanent, Bank of Ireland and AIB Bank.
During 2007, Horizon Enterprise Systems expanded its IBM partnership into
Ireland where it specialises in the provision of IBM enterprise products and
services to the Irish corporate and government markets.
UNITED KINGDOM
In the United Kingdom the group focuses exclusively on the provision of
enterprise infrastructure and services. It assists customers, usually via a
system integrator, in implementing IT strategies through the provision of IT
infrastructure, development and consulting services. Its customer base is
predominantly comprised of blue-chip companies and government departments. It
has a current full time equivalent staff count of 200 employees.
UNITED KINGDOM
Six months to Six months to Six months to
30 June 2007 31 Dec 2006 30 June 2006
Euro'000 Euro'000 Euro'000
Revenue 119,175 97,535 100,860
Gross profit 14,823 12,639 10,359
Gross profit margin 12.4% 13.0% 10.3%
Trading profit 2,816 2,260 2,732
Percentage margin 2.4% 2.3% 2.7%
The group's UK revenue, at Euro119.2m, is up 18.2% on the corresponding period of
2006 and 22.2% on the second half of 2006. All this growth is organic and
principally emanates from the group's recent developments in partnership with
EMC, Oracle, IBM and Tandberg, which are described below in more detail.
The group's objective of moving towards higher margin businesses has delivered
an improvement in gross margin from 10.3% to 12.4% and growth in gross profit of
43.1% since the corresponding period of last year. Horizon continues to invest
significant resources in the development of organic business opportunities to
develop new profit streams for the future. Even with this investment, trading
profit increased by 3.1% over the same period of 2006.
The group's UK businesses are run from a unified entity, Horizon UK, with five
operating units:
* Horizon Clarity - data centre technology from Sun Microsystems. Horizon
Clarity further increased its Sun Microsystems' market share by winning a
number of mid-range infrastructure projects in partnership with global
system integrators and managed services providers. Horizon continued as
Sun Microsystems' largest partner in the UK.
* Horizon EquIP - networking and security technology from Nortel Networks,
Juniper Networks, F5 Networks and others. One of the primary areas of
management focus in the UK during the period was to complete the
integration and gain maximum advantage from the acquisition of EquIP. This
integration is all but complete and the security and networking business is
in line with expectations.
* Horizon Enterprise Systems - IBM specific enterprise infrastructure
products and services. The group's IBM operation in the UK, Horizon
Enterprise Systems (HES), was established to focus on providing UK system
integrators and their customers with a wide range of IBM specific
enterprise infrastructure products and services. This business achieved
positive revenue growth and generated its first material profit in the
first six months of 2007.
* Horizon Data Management - The group's investment in a new team of
specialists to build a storage solutions business has progressed very
satisfactorily. The team have delivered good revenue and margin broadly in
line with expectation and has taken a significant share of the UK storage
market with EMC and StorageTek. Like all businesses that start off with
zero revenue and a fixed cost base, this development will take time to
generate a positive contribution. While it had a negative impact on EBIT in
the first half of 2007, it is expected to provide a first positive
contribution in the second half. The unit provides data management
solutions for EMC, Sun Microsystems (StorageTek) and Symantec. New
partnerships with CommVault Systems and Pillar Data Systems continue to
support this development.
* Horizon Software - Oracle channel development partner. Late in 2006, Oracle
selected Horizon UK as its channel development partner in the UK, tasking
Horizon with the on-going development of the existing Oracle channel with a
primary focus on partners selling to enterprise customers. The investment
cost in this new organic development exceeded margin generated in the first
half of 2007 but it is expected to generate a profit in the second half.
Horizon UK focuses on the enterprise segment of the IT market, specialising in
the provision of high-end and mid-range infrastructure and services. Horizon
aims to become the leading channel partner to its key vendors and has achieved
substantial revenue growth, out-performing the market by focusing on the
continuing development of relationships with key system integrators.
Following the extensive development over the last two years, the group's EIS
operation is now one of the leading enterprise channel partners in the UK with
partnerships with Sun Microsystems, IBM, Nortel Networks, EMC, Symantec, Juniper
Networks and F5 Networks amongst others. Horizon is the clear leader in the UK
amongst the partners of Sun Microsystems, Nortel Networks (data products),
Juniper Networks and F5 Networks.
PROPOSED CAPITAL REDUCTION
At the company's annual general meeting on 10 May 2007, shareholders approved a
resolution to reduce the holding company's share premium account by the amount
necessary to eliminate historical losses and restore the profit and loss account
to a nil position. This process is continuing and the board expects the High
Court hearing to take place in October.
CONSOLIDATED INCOME STATEMENT
for the six months to 30 June 2007
Unaudited Unaudited Audited
Six months to Six months to Year ended
30-Jun-07 30-Jun-06 31 Dec 2006
Note Euro'000 Euro'000 Euro'000
REVENUE 2 146,305 131,220 257,895
Cost of sales (119,219) (112,421) (214,853)
GROSS PROFIT 27,086 18,799 43,042
Other income 538 652 895
Staff costs (15,468) (10,189) (23,604)
Other operating charges (6,578) (4,599) (10,312)
Depreciation (291) (239) (801)
TRADING PROFIT 5,287 4,424 9,220
Amortisation of intangibles (599) (440) (1,099)
Integration costs - (281) (410)
LTIP - - (165)
OPERATING PROFIT FROM CONTINUING OPERATIONS 4,688 3,703 7,546
Finance costs (775) (576) (1,497)
PROFIT FROM CONTINUING OPERATIONS BEFORE TAX 3,913 3,127 6,049
Income tax expense 3 (373) (568) (500)
PROFIT FROM CONTINUING OPERATIONS 3,540 2,559 5,549
DISCONTINUED OPERATIONS
Loss from discontinued operations - (442) (1,493)
PROFIT FOR THE PERIOD 3,540 2,117 4,056
Earnings per share for the period 4
Basic 4.47c 2.77c 5.23c
Diluted 4.43c 2.71c 5.18c
Diluted adjusted* 5.11c 4.21c 9.16c
*Adjusted for unwinding of discount factor, amortisation of intangibles,
material items & discontinued operations
CONSOLIDATED BALANCE SHEET
at 30 June 2007
Unaudited Unaudited Audited
30 June 2007 30 June 2006 31 Dec 2006
Euro'000 Euro'000 Euro'000
NON-CURRENT ASSETS
Property, plant and equipment 2,901 1,958 2,637
Intangible assets 25,858 25,198 26,453
Deferred income tax assets 1,022 139 1,093
29,781 27,295 30,183
CURRENT ASSETS
Inventories 19,144 19,260 20,516
Trade and other receivables 82,719 59,790 64,135
Cash and cash equivalents 5,341 4,771 8,435
107,204 83,821 93,086
Net assets held for resale - 5,849 -
TOTAL ASSETS 136,985 116,965 123,269
CURRENT LIABILITIES
Trade and other payables 84,467 55,117 62,566
Income tax liabilities 1,985 3,009 1,899
Other financial liabilities 3,240 18,257 13,999
Provisions 387 761 727
90,079 77,144 79,191
NON-CURRENT LIABILITIES
Trade and other payables 388 917 1,239
Other financial liabilities 1,113 2,157 1,415
Deferred tax liabilities 2,034 - 1,692
Provisions 1,805 2,171 1,951
5,340 5,245 6,297
TOTAL LIABILITIES 95,419 82,389 85,488
NET ASSETS 41,566 34,576 37,781
CAPITAL AND RESERVES
Equity share capital 5,762 5,687 5,696
Share premium account 79,648 78,985 79,021
Shares to be issued - - 670
Other reserves 77 (613) 121
Retained losses (28,644) (34,015) (32,412)
Cost of shares in the company held in an ESOP (15,277) (15,468) (15,315)
TOTAL EQUITY 41,566 34,576 37,781
STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the six months to 30 June 2007
Unaudited Unaudited Audited
Six months to Six months to Year ended
30-Jun-07 30-Jun-06 31 Dec 2006
Euro'000 Euro'000 Euro'000
Profit for the period 3,540 2,117 4,056
Exchange differences on translation of foreign (44) (398) 336
operations
Total recognised income and expense in the period 3,496 1,719 4,392
STATEMENT OF CHANGES IN EQUITY
for the six months to 30 June 2007
Unaudited Unaudited Audited
Six months to Six months to Year ended
30-Jun-07 30-Jun-06 31 Dec 2006
Euro'000 Euro'000 Euro'000
At beginning of period 37,781 24,632 24,632
Total recognised income and expense in the period 3,496 1,719 4,392
Share option expense 228 148 402
Cash settlement of share options net of tax - - (590)
Shares to be issued (670) - 670
Shares issued during the period 739 8,479 8,681
Share issue costs (8) (402) (406)
41,566 34,576 37,781
CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 June 2007
Unaudited Unaudited Audited
Six months to Six months to Year ended
30-Jun-07 30-Jun-06 31-Dec-06
Euro'000 Euro'000 Euro'000
OPERATING ACTIVITIES
Operating profit - continuing operations 4,688 3,703 7,546
Discharge of provisions for liabilities and charges (567) (497) (894)
Depreciation and amortisation 890 679 1,900
Share based payment expense 228 148 567
Decrease/(increase) in working capital 4,179 (5,855) (3,921)
9,418 (1,822) 5,198
Interest paid (757) (499) (1,235)
Interest element of finance lease payments (2) (4) (7)
Income tax refund/(paid) 136 (33) (862)
Interest received 54 15 47
NET CASH INFLOW/(OUTFLOW) FROM CONTINUING OPERATING 8,849 (2,343) 3,141
ACTIVITIES
Net cash outflow from discontinued operations - (261) (3,497)
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 8,849 (2,604) (356)
INVESTING ACTIVITIES
Payments to acquire tangible fixed assets - continuing (561) (179) (1,042)
operations
Payments to acquire tangible fixed assets - discontinued - (34) (53)
operations
Proceeds from disposal of tangible fixed assets - 17 60
Payments to acquire intangible fixed assets (55) (133) (96)
Purchase of subsidiary undertakings net of cash acquired (2,385) (11,898) (12,537)
Sale of subsidiary undertaking net of cash disposed 2,029 - 8,852
Refunds of deposits pledged as security - - 108
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (972) (12,227) (4,708)
FINANCING ACTIVITIES
Issue of ordinary share capital and exercise of share 69 8,479 8,681
options
Expenses on issue of ordinary share capital (8) (402) (406)
Repurchase of share options - - (839)
Capital element of finance lease rental payments (23) (60) (15)
(Decrease)/increase in short term and long term borrowings (278) 2,157 1,928
NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES (240) 10,174 9,349
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 7,637 (4,657) 4,285
Currency translation differences relating to cash and cash 23 45 (64)
equivalents
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD (5,170) (9,391) (9,391)
CASH AND CASH EQUIVALENTS AT END OF PERIOD 2,490 (14,003) (5,170)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months to 30 June 2007
1. BASIS OF PREPARATION
The financial information presented in this announcement has been prepared
in accordance with the International Financial Reporting Standards and
Interpretations issued by the International Accounting Standards Board and
in accordance with the accounting policies detailed in the December 2006
Annual Report.
2. SEGMENTAL INFORMATION
GEOGRAPHICAL SEGMENTS
Six months ended 30 June 2007 unaudited
Continuing Operations Discontinued Total
Operations Operations
Ireland UK Unallocated/ Total Ireland
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 27,692 118,613 - 146,305 - 146,305
customers
Inter-segment sales 178 562 (740) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 27,870 119,175 (740) 146,305 - 146,305
__________ __________ __________ __________ __________ __________
Result
Trading profit 3,947 2,816 (1,476) 5,287 - 5,287
Amortisation of (189) (386) (24) (599) - (599)
intangibles
__________ __________ __________ __________ __________ __________
Segment result 3,758 2,430 (1,500) 4,688 - 4,688
__________ __________ __________
Net finance costs (775) - (775)
__________ __________ __________
Profit before tax 3,913 - 3,913
Income tax expense (373) - (373)
__________ __________ __________
Profit after tax 3,540 - 3,540
__________ __________ __________
Six months ended 30 June 2006 unaudited
Continuing Operations Discontinued Total
Operations Operations
Ireland UK Unallocated/ Total Ireland
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 30,430 100,790 - 131,220 58,572 189,792
customers
Inter-segment sales 172 70 (242) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 30,602 100,860 (242) 131,220 58,572 189,792
__________ __________ __________ __________ __________ __________
Result
Trading profit 2,708 2,732 (1,016) 4,424 126 4,550
Amortisation of (25) (356) (59) (440) (2) (442)
intangibles
Material items - (281) - (281) - (281)
__________ __________ __________ __________ __________ __________
Segment result 2,683 2,095 (1,075) 3,703 124 3,827
_________ __________ __________
Net finance costs (576) (270) (846)
Loss recognised on the measurement of fair value - (300) (300)
__________ __________ __________
Profit before tax 3,127 (446) 2,681
Income tax expense (568) 4 (564)
__________ __________ __________
Profit after tax 2,559 (442) 2,117
__________ __________ __________
Year ended 31 December 2006 audited
Continuing Operations Discontinued Total
Operations Operations
Ireland UK Unallocated/ Total Ireland
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 59,633 198,262 - 257,895 84,748 342,643
customers
Inter-segment sales 341 133 (474) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 59,974 198,395 (474) 257,895 84,748 342,643
__________ __________ __________ __________ __________ __________
Result
Trading profit 6,083 4,992 (1,855) 9,220 416 9,636
Amortisation of (252) (743) (104) (1,099) (51) (1,150)
intangibles
Material items - (410) (165) (575) - (575)
__________ __________ __________ __________ __________ __________
Segment result 5,831 3,839 (2,124) 7,546 365 7,911
__________ __________ __________
Net finance costs (1,497) (676) (2,173)
Loss on disposal - (1,268) (1,268)
__________ __________ __________
Profit before tax 6,049 (1,579) 4,470
Income tax expense (500) 86 (414)
__________ __________ __________
Profit after tax 5,549 (1,493) 4,056
__________ __________ __________
BUSINESS SEGMENTS
Six months ended 30 June 2007 unaudited
Continuing Operations Discontinued Total
Operations Operations
EIS EAS Unallocated/ Total Distribution
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 135,310 10,995 - 146,305 - 146,305
customers
Inter-segment sales 577 163 (740) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 135,887 11,158 (740) 146,305 - 146,305
__________ __________ __________ __________ __________ __________
Six months ended 30 June 2006 unaudited
Continuing Operations Discontinued Total
Operations Operations
EIS EAS Unallocated/ Total Distribution
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 122,965 8,255 - 131,220 58,572 189,792
customers
Inter-segment sales 103 139 (242) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 123,068 8,394 (242) 131,220 58,572 189,792
__________ __________ __________ __________ __________ __________
Year ended 31 December 2006 audited
Continuing Operations Discontinued Total
Operations Operations
EIS EAS Unallocated/ Total Distribution
Other
Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Revenue
Sales to external 237,309 20,586 - 257,895 84,748 342,643
customers
Inter-segment sales 185 289 (474) - - -
__________ __________ __________ __________ __________ __________
Segment revenue 237,494 20,875 (474) 257,895 84,748 342,643
__________ __________ __________ __________ __________ __________
3. INCOME TAX
The tax charge for the six months ended 30 June 2007 is based on the effective
tax rate, which it is estimated will apply to earnings for the full year.
4. EARNINGS PER ORDINARY SHARE
Six months to Six months to Year ended
30-Jun-07 30-Jun-06 31-Dec-06
Euro'000 Euro'000 Euro'000
The computation of basic and diluted earnings
per share is set out below:
Numerator
Profit after tax and minority interests 3,540 2,117 4,056
Discontinued operations net of tax - 442 1,493
Profit from continuing operations 3,540 2,559 5,549
Material items (net of tax) - 197 431
Unwinding of discount factor 70 91 302
Amortisation of intangibles (net of tax) 472 440 884
Profit after tax adjusted* 4,082 3,287 7,166
Denominator
Weighted average number of shares in issue
for the period ('000) 79,216 76,405 77,591
Dilutive potential ordinary shares:
Employee share options 670 1,754 667
Diluted weighted average number of
ordinary shares ('000) 79,886 78,159 78,258
Earnings per share for the period
Basic 4.47c 2.77c 5.23c
Diluted 4.43c 2.71c 5.18c
Diluted adjusted* 5.11c 4.21c 9.16c
*Adjusted for unwinding of discount factor, amortisation of intangibles,
material items & discontinued operations
5. PUBLICATION OF NON-STATUORY ACCOUNTS
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 19 of the Companies
(Amendment) Act, 1986. The financial information for the full preceding
accounting period is based on the statutory accounts for the year ended 31
December 2006.
6. APPROVAL OF INTERIM STATEMENT
The board of directors approved the unaudited interim statement on 5 September
2007.
6 September 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSAFMISWSEFU
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