TIDMMXM
RNS Number : 5105A
Maxima Holdings PLC
02 February 2011
2 February 2011
Maxima Holdings plc
('Maxima' or the 'Company')
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2010
Maxima Holdings plc (AIM: MXM), the leading IT business systems
and managed services company, is pleased to announce its unaudited
consolidated results for the six months ended 30 November 2010.
Financial Results
-- Revenues of GBP23.7m (H1 2010: GBP26.2m) - with strong double
digit growth in most key areas of focus and investment
-- Adjusted* profit before tax GBP2.3m (H1 2010: GBP2.6m)
-- Loss before tax of GBP0.04m (H1 2010: Loss GBP0.6m) after
GBP0.7m (H1 2010: GBP1.3m) of exceptional items
-- Adjusted* basic earnings per share 6.4p (H1 2010: 7.0p)
-- Net cash flow from operating activities was GBP1.6m (H1 2010:
GBP3.4m)
-- The Group had net debt of GBP11.6m at the end of the period
(30 November 2009: GBP13.5m; 31 May 2010: GBP11.8m)
-- Net finance costs in the period totalled GBP0.3m (H1 2010:
GBP0.3m), covered 9.1 times by adjusted* operating profit
-- Dividend of 1p per share (H1 2010: 1p) in line with stated
dividend policy
(*before amortisation of intangibles, share-based payments, and
exceptional items).
Operational Results
-- 39 new clients won during the period (H1 2010: 58)
-- 61% Recurring Revenue (H1 2010: 60%)
-- 15 active customers on Maxima Cloud Platform
-- 40%+ year on year increase in Citrix Virtualisation revenue
orders
-- 90%+ year on year increase in Microsoft Dynamics AX related
revenue orders
Current Trading
-- Positive order pipeline improvement in areas of focus and
investment
-- Currently bidding for a number of significant opportunities
with both existing and new customers which if closed are expected
to benefit our results in the second half and beyond
Commenting on the results, Graham Kingsmill, Maxima's Chief
Executive, said:
"Maxima made encouraging progress during the first half as we
continue to transition the business to concentrate on our key areas
of focus and competence, where we believe the growth prospects are
most compelling. In most of these areas, we have reported strong
double digit revenue growth, including Microsoft Applications,
Citrix Virtualisation, and Communications/ Infrastructure
Management.
Maxima has continued to leverage its strengths to win multiple
new orders, from both existing and new customers, for the supply of
the Maxima private Cloud facilities - driving demand for services
from our expanding Cloud enablement portfolio.
As we focus our investment on those services and products with
better growth prospects, these positive developments have been
offset, as anticipated, by revenue declines in areas where we have
chosen to scale back our presence."
Enquiries
Maxima Holdings plc
Graham Kingsmill David Memory
Chief Executive Officer Chief Financial Officer
Tel: +44 (0)1242 211 211 Tel: +44 (0)1242 211 211
Cenkos (Nominated advisor to the Company)
Stephen Keys / Adrian Hargrave
Tel: +44 (0)20 7397 8900
MHP Communications
Reg Hoare / James White / Vicky Watkins
Tel: +44 (0)20 3128 8100
Notes to Editors
Maxima (AIM:MXM) is a leading IT business systems and managed
services company, providing Business Solutions and Support
Enablement Services to over 1,400 organisations across the UK,
Ireland and the USA. The Company's core service offerings include
virtualisation, network infrastructure and communications, business
intelligence and comprehensive Microsoft Dynamics AX/CRM solutions
for key sectors including construction, manufacturing and
services.
Half yearly report for the six months ended 30 November 2010
Director's Report
Chairman's Statement
Maxima has continued to successfully execute the business plans
presented to shareholders by CEO Graham Kingsmill, following the
strategic review he conducted on his appointment in 2009. The
decisions taken at that time positioned the Company extremely well
for the fundamental changes that are taking place in the IT
services market, as well as for the general economic conditions in
our main client sectors of the manufacturing, construction and
financial service industries.
The emergence of Cloud Computing marks a major shift in the IT
services market. This has come about as a result of developments in
virtualisation and web-based software architecture and immense
improvements in network capacity, costs, management tools and
resilience. Maxima is strongly positioned to be one of the first to
take advantage of the opportunities created by Cloud Computing,
with its deep skills in both ITC (Information Technology &
Communications) infrastructure and application software management.
Cloud Computing offers our clients huge business advantages in
terms of flexibility, risk reduction and compliance. The client
also benefits from predictable costs, more evenly spread across the
duration of a contract.
Results
Trading results have been satisfactory although revenues and
operating profits are slightly down on the first half of the prior
year. Strong growth in our key areas of focus is partly mitigating
revenue declines in areas where there is aggressive competition or
where we are reducing our emphasis. We have also continued to
invest heavily in the new areas of focus, whilst reducing costs
elsewhere, although inevitably this planned transition has the
effect of constraining short term profitability.
The continuing high levels of recurring revenues provide an
excellent transition platform to a cloud-based managed service
business model and increases our financial resilience. Continued
cash generation has enabled us to further reduce our bank debt, as
well as to finance the continuing investment in driving organic
growth and dividend payments.
Maxima continues its consistent policy of returning a proportion
of operating profits to shareholders as a dividend, whilst
continuing to pay down our debt and retaining the headroom to
finance investment and acquisitions. On 9 May 2011 the company will
pay an Interim Dividend of 1p per share (H1 2010: 1p) to
shareholders on the register on 8 April 2011.
Summary
I have been pleased by the enthusiasm of our staff in supporting
the changes we have made to Maxima's structure and working methods,
particularly the close co-operation between colleagues in the UK
and India as we have greatly expanded the role played by our Indian
support and development teams. Once again, I should like to thank
all our staff in the UK, Ireland, USA and India for their loyalty
and professionalism.
I continue to be confident that Maxima's focus on investment in
areas where we can achieve superior organic growth, namely
Microsoft Dynamics, Cloud Computing, Communications/ Network
Infrastructure and Virtualisation will continue to build value for
shareholders.
Kelvin Harrison Chairman, 1 February 2011
Interim results for the six months ended 30 November 2010
Director's Report
Chief Executive's Review
Introduction
Maxima has made encouraging progress towards delivering on its
strategic 'Focus and Simplify' plan first presented in August 2009.
Our decision to shift priorities from generalist IT provisioning to
a more focused range of services that offer higher growth potential
is now being validated, with the Company securing new customer
wins, and business expansions with existing customers that were
previously out of our reach.
Pursuant to the plan, we have built on our experience and
strength in software development and delivery, as well as some ten
years' experience in providing IT hosting and managed services, to
define and deliver the key 'Growth Engines' that are taking Maxima
forward:
-- Microsoft Dynamics AX/CRM Business Solutions;
-- Citrix Virtualisation;
-- Communications / Infrastructure Management;
-- Business Intelligence (BI); and
-- Cloud Hosting/Enablement Services.
There was good progress during the first half, with strong
double-digit revenue growth from all the 'Growth Engines' listed
above, with the exception of Business Intelligence.
The Company has also invested heavily in our own support and
development facilities in India. With a lower cost base and access
to impressive development skills in India, we are leveraging our
offshore resource to create greater value from Maxima's own
products such as maxcel for Microsoft and the Hotchilli offering
for broadband and cloud-enabled services.
Maxima continues to support a large number of customers who
value our knowledge base in specialist ERP, Document Management,
Cabling, Business Continuity and Unified Communications solutions.
These customers are very important to our future as they provide a
predictable revenue base for the business and are receptive
potential buyers of our 'Growth Engine' products and services. We
offer these customers:
-- Lifecycle extension services, helping to extend existing
Maxima solutions through, for example, migration to the Maxima
Cloud IaaS (Infrastructure as a Service) platform to extend product
life and reduce costs. Amtico International, for example, has
contracted Maxima to manage their existing manufacturing ERP and
office applications within a Maxima-hosted environment combined
with Maxima's IaaS for storage.
-- Expansion into selected new 'Growth Engine' solutions and
services through easy and cost effective routes to Maxima's
specialist capabilities - an example is a prestige home builder, a
long standing customer, that has awarded Maxima a new contract to
implement a Citrix based virtualised desktop infrastructure. This
is already unlocking significant cost and operational benefits,
together with a reduction in overall IT power consumption
levels.
We are also winning new customers through the 'Growth Engines',
working in close collaboration with the industry's leading
technology partners. These relationships enable us to leverage our
own specialist skills and IP to complement the standard technology
provided by our key partners.
Unfortunately, there were some year-on-year revenue declines due
to the loss, in 2009, of the QAD distribution contract coupled with
our reduced focus on some product and service disciplines. However,
the 'Growth Engines' highlighted above are enabling positive trends
in pipeline building and were the central driver for new customer
wins in the first half of the year.
Simplified Organisational Structure
During 2010 we completed the shaping of our simplified
organisational structure. Maxima now operates through two operating
divisions with complementary disciplines, each headed by a
Divisional Managing Director and supported by a core of shared
service functions - such as Marketing, HR, Finance, 24x7 Support
and Development - based in the UK and India. The two divisions both
contribute specialist skills to a newly formed Cloud Computing team
that has quickly built up a base of 15 customers - including two
larger existing customers that have started a migration of key IT
services to the Maxima IaaS cloud platform.
Customer Focused
Maxima is a customer-centric organisation having built up a
large and loyal customer base in the UK and Ireland generating
GBP23.7m of revenue in the first 6 months of the year of which
GBP14.4m (61%) is recurring, GBP5.4m (23%) relates to product
sales, and the balance of GBP3.9m (16%) relates to expert
consulting services. This mix continues to be dominated by the
recurring revenues from customers who in some cases have been
receiving support for more than 10 years. The last year has also
seen an increase in the volume of product related orders in part
assisted by increasing use of Maxima's own developed and branded
products.
Maxima maintains a customer portfolio of over 1,400 clients. Our
target customers are primarily medium-sized UK and Ireland-based
organisations with a turnover of between GBP5m and GBP500m,
although many larger organisations are also contracting with
Maxima, particularly in areas where we have unique skills and
competencies.
During the first half of the year we have continued to provide
services to major organisations including Mars, Everything
Everywhere Ltd (formally Orange UK), Lush Ltd, R.Twining & Co
Ltd, The Jordans and Ryvita Co Ltd, A.G.Barr p.l.c., The Murphy
Group, Caledonian MacBrayne, Hill and Smith Ltd, Anglian Group
Limited, Arts Council England, Namesco Limited, Leach Lewis Group,
Cullum Capital Ventures (CCV) and others - extending our existing
relationship, securing repeat services business, and developing our
footprint within our customers' enterprise IT and Communications
infrastructures.
Operating Update
Cloud Enablement
Cloud Computing is an IT delivery approach that provides
utility-style, on-demand IT applications and services, hosted on a
virtualised infrastructure, and typically delivered across the
Internet or a corporate network on a pay-as-you-go basis. The Cloud
Computing model is increasingly attractive to a broad range of
customers in that it provides a way to update or increase capacity
and functionality without needing to invest in new infrastructure
or license new software. Cloud technology is paid for incrementally
and thus encompasses subscription-based propositions like SaaS
(Software as a Service), IaaS and PaaS (Platform as a Service).
We are very excited by the Cloud Computing opportunity as it is
already bringing business and partnerships that would previously
have been unavailable to us. There has been much hype with regard
to Cloud, and it is clear that some IT suppliers lack the delivery
capability to provide Cloud services. Maxima is, however, well
positioned to provide customised delivery on a pay per usage basis
due to our expertise in core IT infrastructure services combined
with our software applications knowledge base.
Recognising the growth opportunity in Cloud, we have made a
large capital investment in the renewal and expansion of our IaaS
platform, by implementing a dedicated, highly resilient, IBM-based
and fully virtualised server and storage infrastructure across two
data centers which we plan to connect with IBM's global public
Cloud facilities.
IBM acknowledged Maxima's Cloud leadership in October 2010 with
the announcement of a joint agreement to develop a go-to-market
plan with IBM to deliver cloud based services. To complement this
investment we have also created a dedicated Cloud Enablement team
covering support, sales, marketing and reseller services. Although
we have the capability to provide SaaS and IaaS directly we will
use the relationship with IBM to provide PaaS.
One of our key differentiators is the relationship we have with
circa 50 ISP (Internet Services Providers) where we provide DSL and
Broadband connectivity. Many of these providers have business
models based upon transaction volume and bandwidth. Maxima supports
these business models by leveraging our networking knowledge base
to provide 21CN (21st century network) migration as well as a range
of Cloud-enabled services that can then be offered for sale through
the ISP. Business Solutions Division
Business Solutions accounted for 35% of H1 revenue. The division
is predominantly focused on industry-aligned business applications
and solutions based on technology from Microsoft and SAP, as well
as Maxima's own IP brand maxcel which assisted in a 15% year on
year increase in product sales in this division.
In overall terms revenues for the division were down on the
previous year, impacted by the loss of the QAD distribution
agreement as well as some delays in contract placement from a large
Business Intelligence customer in the banking sector. These
declines were offset by a 54% increase in Microsoft-related
operational revenue compared with the same period last year,
including some 17 new customer wins from organisations such as
Lovell (where the solution provided integrates Maxima expertise
from the UK and India), as well as multi-year service framework
agreements with companies such as the Leach Lewis Group and
Motivair Compressors to optimise their investment in the Microsoft
Dynamics platform and our maxcel software.
The Business Solutions Division also secured an excellent
example of our expansion strategy, winning a new IaaS ERP and
office systems hosting contract with prestige flooring specialists
Amtico International, a customer that originally purchased their
manufacturing ERP system from Maxima.
Support Enablement Services Division
Support Enablement Services (SES) accounted for 65% of H1
revenue. The division provides a range of IT managed service,
hosting, Citrix Virtualisation, network and connectivity services.
SES is aligned by technology offerings mainly from IBM, Citrix and
Oracle complemented by an extended portfolio of specialist
technologies where Maxima has expertise.
The fastest growing part of this division has been the
connectivity solutions supplied under the Maxima IP brand
Hotchilli. Following the winning of the multi million pound Namesco
contract in May last year, Maxima has seen continued realisation of
business from internet service providers who are attracted by
Maxima's expertise in a sought after combination of telco and IT
disciplines.
Although overall revenues for this division have not grown,
there has been a positive impact from new contracts, but the gains
have been offset through the loss of some existing contracts in
areas where we have chosen not to focus, or in some cases, caused
by low margin competitive bids. Although it is disappointing to
lose a customer, it is reflective of our intent to change the mix
of business toward those areas of business where we can offer more
specialised service and thereby achieve higher net margins.
Successes here include a major contract with Ryanair, deploying the
latest Citrix NetScaler web acceleration and load balancing
technology to improve the performance and security of the airline's
critical Web based booking application.
Central Services Including India
To support the 'Focus and Simplify' strategic plan we have built
a shared service function to provide finance and commercial
support, marketing, human resources and offshore support and
development. This initiative has enabled us to steadily reduce our
operating division cost base by over GBP1.4m or 12.5% for the same
period last year.
We are pleased with the progress and growth of our activities in
Hyderabad, India. We have steadily increased our staffing to
approximately 55 people, with plans for another 10 Microsoft
developers by the end of February 2011. Our operation in Hyderabad
now provides all first line support for the SES Division and all
out-of-hours support for the Business Solutions division. We are
expecting much of our future growth to be scaled out of India,
where we can do so with the confidence that skills are available at
lower cost.
Financial Results in Summary
-- Revenues of GBP23.7m (H1 2010: GBP26.2m) - with strong double
digit growth in most key areas of focus and investment
-- Adjusted* profit before tax GBP2.3m (H1 2010: GBP2.6m)
-- Loss before tax of GBP0.04m (H1 2010: Loss GBP0.6m) after
GBP0.7m (H1 2010: GBP1.3m) of exceptional items
-- Adjusted* basic earnings per share 6.4p (H1 2010: 7.0p)
-- Net cash flow from operating activities was GBP1.6m (H1 2010:
GBP3.4m)
-- The Group had net debt of GBP11.6m at the end of the period
(30 November 2009: GBP13.5m;31 May 2010: GBP11.8m)
-- Net finance costs in the period totalled GBP0.3m (H1 2010:
GBP0.3m), covered 9.1 times by adjusted* operating profit
-- Dividend of 1p per share (H1 2010: 1p) in line with stated
dividend policy
(*before amortisation of intangibles, share-based payments, and
exceptional items).
Trading Results
Revenues for the half year to 30 November 2010 decreased from
GBP26.2m to GBP23.7m. The main reason for this was the impact of
the termination of the QAD contract in October 2009, whilst
increases in Microsoft related revenues were offset by a decline in
BI consulting revenues and product sales from the SES division. The
mix of business is largely unchanged with recurring revenues
remaining strong at 61% (H1 2010: 60%) of total revenue. Gross
margins, at 68%, are the same as in the first half last year,
though an improvement in product margins (as a result of higher
sales of our own developed product) is offset by a reduced margin
on support (which is due in part to tightening margins in the more
commoditised business lines and also to the changing mix).
Administration expenses reduced by GBP1.5m to GBP13.4m, as the
effects of the reorganisations over the past 18 months take effect.
This saving almost offset the reduced gross profit described above,
to leave earnings before interest, tax, amortisation, share based
payments and exceptional items GBP0.3m lower at GBP2.6m.
Amortisation of intangibles has reduced to GBP1.5m (H1 2010:
GBP1.8m), and exceptional items have also reduced to GBP0.7 million
(H1 2010: GBP1.3m) as the final phase of the reorganisation was
implemented during the six months. As a result of these reductions,
we have seen a return to operating profits of GBP0.3m compared to
an operating loss of GBP0.3m in the first half of last year.
(Loss)/Earnings per share and dividends
Basic loss per share was 0.4p (H1 2010: 2.2p loss). Adjusted
earnings per share, before amortisation, share based payments and
exceptional items, fell to 6.4p (H1 2010: 7.0p). An interim
dividend of 1.0p per share will be paid on 9 May 2011, to
shareholders on the register at close of business on 8 April
2011.
Cash flow and net debt
In the 6 months, the Group generated GBP1.6m of cash from
operations, against GBP3.4m last year. Last year, we enjoyed the
one-off benefits of stronger cash collection, as debtor days were
reduced considerably. This is not of course repeatable, and the
cash generated from operations reverted this year to a level
commensurate with the year before last. As a result, net debt
reduced to GBP11.6m (30 November 2009: GBP13.5m).
The Group finances its operations through a mixture of cash
generation and related retained profit, and a mix of medium and
long term bank facilities with Barclays Bank plc, to ensure that
sufficient liquidity is available to meet its foreseeable funding
requirements. The Group's facilities are floating rate and it uses
interest rate instruments to hedge its interest rate risk on
borrowing where appropriate. The Group has committed borrowing
facilities of GBP14.5m at 30 November 2010, comprising a GBP2.5m
term loan facility, repayable in five instalments until 31 May
2013, an GBP11.0m revolving credit facility repayable by 31 May
2013 and a GBP1.0m overdraft facility. GBP12.4m was drawn under
these facilities at the half year end, against which cash balances
were GBP0.8m, which allows GBP2.9m of headroom. At 30 November
2010, GBP4.0m of the group's interest rate risk was hedged for the
period to 30 November 2011.
Market Conditions and Outlook
The last 18 months has been a period of considerable change for
Maxima. While this has occurred during a time when market
confidence was low, there has been a growing realisation that
companies in our sector needed to change their business models in
order to take advantage of changing market conditions.
Maxima has experienced both positive and negative effects from
the market conditions. The negative effects include the fact that
some competitors engaged in bidding at zero profit margins in order
to secure short term revenue. We believe this trend will continue
in areas like desktop support where service delivery has become
more commoditised and will therefore continue in the short term to
be a drain on the progress being made elsewhere in the Group. The
positive effects are that in areas such as Cloud, communications
(broadband, Wi-Fi, and fixed line), Citrix virtualisation, and
Microsoft Dynamics, we are seeing positive interest and growth from
customers looking for alternative lower cost business solutions,
delivery models, standardised technology platforms, and solutions
that support mobility and web-based business.
We are encouraged by pipeline improvement where we have
prioritised our focus as above. We are currently bidding for a
number of significant opportunities with both existing and new
customers which if closed are expected to benefit our results in
the second half of the year and beyond.
Our activities in Business Solutions are mostly orientated
around the construction, manufacturing and financial services
industry sectors so it is encouraging to observe in a recent BBC
Business News article that "UK manufacturing expanded at its
fastest pace for 16 years in December (2010)". IS Research has also
highlighted the changing vertical market dynamics with a resurgence
in the Financial Services sector. While analysts such as
TechMarketView and Ovum project subdued spending in the overall
Software and IT Services market, they acknowledge strong growth
opportunities in key areas such as private cloud, hosting,
application provisioning and Microsoft applications. IDC also
predicts that SME business cloud use will surge in 2011.
The change in focus at Maxima has shaped the business to address
new market conditions and customer demands. Moreover, most of our
planned re-engineering is now complete and the majority of the cost
and disruption of these changes has been incurred. Our priority now
is to concentrate on taking advantage of our skills, long standing
customer relationships and the new opportunities available through
our 'Growth Engines'.
Graham Kingsmill
Chief Executive Officer, 1 February 2011
Independent Review Report to Maxima Holdings plc
Introduction
We have been engaged by the company to review the financial
information in the half-yearly financial report for the six months
ended 30 November 2010 which comprises the consolidated interim
income statement, consolidated interim statement of comprehensive
income, consolidated interim balance sheet, consolidated interim
statement of changes in equity, consolidated interim cash flow
statement and notes 1 to 7 to the interim financial statement. We
have read the other information contained in the half-yearly
financial report which comprises only the highlights and the
Director's Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the company those matters we are required to state
to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules of the London
Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly financial report are consistent with those which will
be adopted in the annual accounts having regard to the accounting
standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial information in the half-yearly
financial report has been prepared in accordance with the basis of
preparation in Note 1.
Our responsibility
Our responsibility is to express to the company a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 November
2010 is not prepared, in all material respects, in accordance with
the basis of preparation described in Note 1.
GRANT THORNTON UK LLP
AUDITOR
GLASGOW 1 February 2011
The maintenance and integrity of the Maxima Holdings plc website
is the responsibility of the Directors: the interim review does not
involve consideration of these matters and, accordingly, the
company's reporting accountants accept no responsibility for any
changes that may have occurred to the interim report since it was
initially presented on the website. Legislation in the United
Kingdom governing the preparation and dissemination of the interim
report differ from legislation in other jurisdictions.
Maxima Holdings plc
Consolidated Interim Income Statement
for the six months ended 30 November 2010
(Unaudited) (Unaudited)
Six months Six months
to to (Audited)
30 November 30 November Year to
Note 2010 2009 31 May 2010
GBP'000 GBP'000 GBP'000
Revenue 2 23,684 26,247 51,006
Cost of sales (7,627) (8,372) (15,323)
------------ ------------ ------------
Gross profit 16,057 17,875 35,683
Administration expenses (13,430) (14,935) (30,080)
------------ ------------ ------------
Earnings before interest, tax,
amortisation of intangibles,
share based payments and
exceptional items 2,627 2,940 5,603
Amortisation of intangibles (1,506) (1,787) (3,495)
Share based payments (123) (146) (319)
Exceptional items (745) (1,303) (1,829)
------------ ------------ ------------
Operating profit/ (loss) 253 (296) (40)
Finance income 2 7 12
Finance costs (292) (311) (754)
------------ ------------ ------------
Loss before income tax (37) (600) (782)
Tax expense, net (58) 34 107
Loss for the period from
total operations attributable
to equity holders of the
parent (95) (566) (675)
============ ============ ============
Earnings per share 4
Basic loss per share (pence) (0.4)p (2.2)p (2.7)p
Diluted loss per share
(pence) (0.4)p (2.2)p (2.7)p
Consolidated Interim Statement of Comprehensive Income
for the six months ended 30 November 2010
(Unaudited) (Unaudited)
Six months Six months
to to (Audited)
30 November 30 November Year to
2010 2009 31 May 2010
GBP'000 GBP'000 GBP'000
Loss for the period from
total operations (95) (566) (675)
Exchange (loss)/ gain
on translating foreign
currencies (6) 27 8
------------ ------------ ------------
Total comprehensive income
attributable to equity
holders of the parent (101) (539) (667)
============ ============ ============
Maxima Holdings plc
Consolidated Interim Balance Sheet
as at 30 November 2010
(Unaudited) (Unaudited)
30 November 30 November (Audited)
Notes 2010 2009 31 May 2010
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 1,313 1,247 1,265
Intangible assets - goodwill 40,921 40,921 40,921
Intangible assets - other 4,445 7,271 5,704
------------ ------------ ------------
Total intangible assets 45,366 48,192 46,625
------------ ------------ ------------
Total non-current assets 46,679 49,439 47,890
Current assets
Inventory 463 390 329
Trade and other receivables 9,750 13,968 11,639
Cash and cash equivalents 5 851 1,930 781
Total current assets 11,064 16,288 12,749
------------ ------------ ------------
Total assets 57,743 65,727 60,639
------------ ------------ ------------
Liabilities
Current liabilities
Trade and other payables (3,854) (3,794) (3,604)
Deferred Income (8,033) (11,158) (10,708)
Tax liabilities (234) (150) (109)
Current borrowings 5 (1,022) (1,050) (1,031)
Accruals (4,931) (4,871) (4,347)
Short term provisions (507) (1,124) (856)
------------ ------------ ------------
Total current liabilities (18,581) (22,147) (20,655)
------------ ------------ ------------
Non-current liabilities
Non-current borrowings 5 (11,419) (14,342) (11,530)
Deferred tax (2,107) (2,628) (2,262)
Long term provisions (2,160) (2,459) (2,218)
------------ ------------ ------------
Total non-current liabilities (15,686) (19,429) (16,010)
Total liabilities (34,267) (41,576) (36,665)
Net assets 23,476 24,151 23,974
============ ============ ============
Equity
Share capital 253 253 253
Reverse acquisition reserve (9,180) (9,180) (9,180)
Share premium 28,794 28,794 28,794
Capital redemption reserve 50 50 50
Merger reserve 4,595 4,595 4,595
Foreign translation reserve 195 220 201
Retained earnings (1,231) (581) (739)
Total equity 23,476 24,151 23,974
============ ============ ============
Maxima Holdings plc
Consolidated Interim Statement of Changes in Equity
for the 6 months ended 30 November 2010
Reverse Capital Foreign
Share acquisition Merger Share redemption translation Retained
Capital reserve reserve premium reserve reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
6 months to 30
November 2010
(unaudited)
Balance at 1
June 2010 253 (9,180) 4,595 28,794 50 201 (739) 23,974
Loss for the
period - - - - - - (95) (95)
Dividends paid - - - - - - (505) (505)
Share based
payments - - - - - - 123 123
Deferred tax
thereon - - - - - - (15) (15)
Foreign
exchange on
consolidation - - - - - (6) - (6)
Balance at 30
Nov 2010 253 (9,180) 4,595 28,794 50 195 (1,231) 23,476
======== ============ ======== ======== =========== ============ ========= =======
6 months to 30
November 2009
(unaudited)
Balance at 1
June 2009 253 (9,180) 4,595 28,794 50 193 471 25,176
Loss for the
period - - - - - - (566) (566)
Dividends paid - - - - - - (632) (632)
Share based
payments - - - - - - 146 146
Foreign
exchange on
consolidation - - - - - 27 - 27
-------- ------------ -------- -------- ----------- ------------ --------- -------
Balance at 30
Nov 2009 253 (9,180) 4,595 28,794 50 220 (581) 24,151
======== ============ ======== ======== =========== ============ ========= =======
Year to 31 May
2010
(audited)
Balance at 1
June 2009 253 (9,180) 4,595 28,794 50 193 471 25,176
Loss for the
year - - - - - - (675) (675)
Dividends paid - - - - - - (885) (885)
Share based
payments - - - - - - 319 319
Deferred tax
thereon - - - - - - 31 31
Foreign exchange
on
consolidation - - - - - 8 - 8
Balance at 31
May 2010 253 (9,180) 4,595 28,794 50 201 (739) 23,974
==== ======== ====== ======= === ==== ====== =======
Maxima Holdings plc
Consolidated Interim Cash Flow Statement
for the six months ended 30 November 2010
(Unaudited)
Six months (Unaudited)
to Six months to (Audited)
30 November 30 November Year to
Notes 2010 2009 31 May 2010
GBP'000 GBP'000 GBP'000
Operating activities
(Loss)/ profit before tax (37) (600) (782)
Adjustments for:
Interest payable 292 311 754
Exceptional redundancy
and reorganisation costs 745 1,303 1,829
Interest receivable (2) (7) (12)
Depreciation 297 320 622
Share based payments 123 146 319
Amortisation of intangibles 1,506 1,787 3,495
------------ -------------- ------------
Operating cash flows before
movements in working capital 2,924 3,260 6,225
Movement in inventories (134) 16 75
Movement in receivables 1,889 (167) 2,135
Movement in payables (2,959) (286) (2,558)
Taxation (paid)/ repaid (96) 533 240
Net cash from operating
activities 1,624 3,356 6,117
Cash flows from investing
activities
Interest received 3 7 12
Purchase of property, plant
& equipment (354) (203) (565)
Proceeds from sale of property,
plant & equipment 8 3 36
Warranty claim paid - 100 100
Expenditure on research
& development activities
capitalised (246) (177) (319)
------------ -------------- ------------
Net cash used in investing
activities (589) (270) (736)
------------ -------------- ------------
Cash flows from financing
activities
Interest paid (340) (429) (789)
Repayment of long term
borrowings (100) (2,450) (5,250)
Repayment of finance leases (20) (66) (97)
Dividends paid (505) (632) (885)
Net cash outflow from financing
activities (965) (3,577) (7,021)
Net increase/(decrease)
in cash & cash equivalents 70 (491) (1,640)
Cash and cash equivalents
at beginning of period 781 2,421 2,421
Cash and cash equivalents
at end of period 851 1,930 781
------------ -------------- ------------
Maxima Holdings plc
Notes to the interim financial statements
1. Basis of preparation
The interim financial information does not constitute statutory
financial statements for the purpose of section 434 of the
Companies Act 2006. The figures for the year ended 31 May 2010 have
been extracted from the Group Financial Statements for that year.
Those financial statements have been delivered to the Registrar of
Companies and included an independent auditors' report, which was
unqualified, and did not contain statements under Section 498(2) or
Section 498(3) of the Companies Act 2006.
The interim financial information has been prepared using the
same accounting policies and estimation techniques as will be
adopted in the Group financial statements for the year ending 31
May 2011. The Group financial statements for the year ended 31 May
2010 were prepared under International Financial Reporting
Standards. These interim financial statements have been prepared on
a consistent basis and format. The provisions of IAS 34 'Interim
Financial Reporting' have not been applied in full.
2. Segmental Analysis
Segment information is presented in respect of the Group's
business segments. The primary format, business segments, is based
on the Group's management and internal reporting structures.
Segment results include items directly attributable to a
segment. Unallocated items comprise mainly tax and financing
related items.
Support
Six months ended 30 November Business Enablement
2010 Solutions Services Total
GBP000 GBP000 GBP000
Revenue 8,314 15,370 23,684
----------- ------------ --------
Operating profit before
amortisation of intangibles,
share based payments and
exceptional items 1,511 1,116 2,627
Amortisation of intangibles (482) (1,024) (1,506)
Share based payments (66) (57) (123)
Exceptional items (696) (49) (745)
----------- ------------ --------
Operating profit / (loss) 267 (14) 253
Finance costs (292)
Finance income 2
Loss before income tax (37)
Income tax expense, net (58)
--------
Loss for the period (95)
--------
Capital expenditure 104 270 374
Depreciation 73 224 297
Support
Business Enablement
Solutions Services Total
Six months ended 30
November 2009 GBP000 GBP000 GBP000
Revenue 10,207 16,040 26,247
----------- ------------ --------
Operating profit before
amortisation of intangibles,
share based payments
and exceptional items 1,285 1,655 2,940
Amortisation of intangibles (494) (1,293) (1,787)
Share based payments (115) (31) (146)
Exceptional items (909) (394) (1,303)
----------- ------------ --------
Operating loss (233) (63) (296)
(311)
Finance costs 7
--------
Finance income
--------
Loss before income (600)
tax 34
--------
Income tax expense,
net
--------
Loss for the period (566)
--------
203
Capital expenditure 60 143 320
Depreciation 107 213
Year ended 31 May 2010
Revenue 20,078 30,928 51,006
----------- ------------ --------
Operating profit before
amortisation of intangibles,
share based payments
and exceptional items 2,578 3,025 5,603
Amortisation of intangibles (999) (2,496) (3,495)
Share based payments (161) (158) (319)
Exceptional items (1,105) (724) (1,829)
----------- ------------ --------
Operating loss 313 (353) (40)
(754)
Finance costs 12
--------
Finance income
--------
Loss before income tax (782)
Income tax expense, net 107
--------
Loss for the period (675)
--------
Capital expenditure 130 435 565
Depreciation 197 425 622
3. Dividends
An interim dividend of 1.0 pence per share for the year to 31
May 2011 will be paid on 9 May 2011 to shareholders on the register
at 8 April 2011. In accordance with IAS 10 this has not been
accrued for in the accounts.
4. Earnings per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of shares in issue during the period. Diluted earnings per
share takes into account the dilutive effect of the share options
outstanding under the Company's employee option schemes and
acquisition related earn outs payable in shares.
Adjusted earnings per share is based on earnings before
amortisation, share based payments, and exceptional items, and is
presented in order to assist in the understanding of the underlying
performance of the Group's businesses.
(Unaudited) (Unaudited)
Six months Six months (Audited)
to to Year ended
30 November 30 November 31 May
2010 2009 2010
Earnings GBP000 GBP000 GBP000
Net loss after tax attributable
to equity holders (95) (566) (675)
------------- ------------- ------------
No. 000's No. 000's No.000's
Weighted average number of
shares
For basic earnings per share 25,261 25,261 25,261
Dilutive share options 1,443 1,214 1,302
------------- ------------- ------------
For diluted earnings per
share 26,704 26,475 26,563
Basic loss per share (0.4)p (2.2)p (2.7)p
Diluted loss per share (0.4)p (2.2)p (2.7)p
Operating profit/ (loss) 253 (296) (40)
Add back
Share based payments 123 146 319
Amortisation of other intangible
assets 1,506 1,787 3,495
Exceptional items 745 1,303 1,829
------------- ------------- ------------
Adjusted operating profit 2,627 2,940 5,603
Net interest (290) (304) (742)
------------- ------------- ------------
Adjusted profit on ordinary
activities before tax 2,337 2,636 4,861
Tax on ordinary activities (58) 34 107
Tax on share based payments,
amortisation and exceptional
items (665) (906) (1,580)
------------- ------------- ------------
Adjusted profit after tax 1,614 1,764 3,388
------------- ------------- ------------
Adjusted basic earnings per 6.4p 7.0p 13.4p
share
Adjusted diluted earnings 6.0p 6.7p 12.8p
per share
------------- ------------- ------------
5. Net Debt
(Unaudited) (Unaudited) (Audited)
Six months
Six months to to Year ended
30 November 30 November 31 May
2010 2009 2010
GBP000 GBP000 GBP000
Non-Current borrowings
Bank borrowings 11,400 14,300 11,500
Finance Leases 19 42 30
11,419 14,342 11,530
-------------- ------------ -----------
Current borrowings
Bank borrowings 1,000 1,000 1,000
Finance Leases 22 50 31
1,022 1,050 1,031
-------------- ------------ -----------
Total Borrowings 12,441 15,392 12,561
-------------- ------------ -----------
Cash (851) (1,930) (781)
Net Debt 11,590 13,462 11,780
-------------- ------------ -----------
6. Availability of Interim Report
Copies of these results are being sent to shareholders and will
also be available from the Company's registered office at Cotswold
Court, Lansdown Road, Cheltenham, GL50 2JA.
7. Statutory Accounts
These financial statements do not constitute statutory accounts.
Although the information has been reviewed by the auditors, it is
unaudited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZMGGZLMMGMZM
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