RNS Number:6478N
SiRViS IT PLC
11 February 2008
SiRViS IT plc
Interim results for the six months ended 30 November 2007
SiRViS IT plc ("SiRViS IT" or the "Company"), which provides a range of IT
services including support, consultancy and systems installation across the UK,
announces its interim results for the six months ended 30 November 2007.
Highlights
Basis of reporting
Results reported are prepared based on the recognition and measurement
principles of the International Financial Reporting Standards (IFRS) for the
first time; comparatives have been restated.
* Revenue up 51% to �5.3m (2006: �3.5m)
* Operating profit before share based payments, amortisation of
intangible assets and exceptional items up 32% to �577,000 (2006:
�437,000)
* Statutory operating profit up to �518,000 (2006: 183,000)
* Acquisition of Technology Management Group Ltd in May 2007, fully
integrated in July 2007
* Adjusted earnings per share before share based payments, amortisation
of intangible assets and exceptional items up 6% to 12.02p
(2006: 11.32p)
* Recurring revenues percentage to turnover 80% (2006: 80%)
* Share consolidation (1 new ordinary share for every 40 existing
shares) effective September 2007
Enquiries:
Mark Lewis 01773 825516, SiRViS IT plc, Chief Executive
Ian Bailey 01773 825516, SiRViS IT plc, Finance Director
Geoff Nash 020 7600 1658, JMFinn Capital Markets, Nominated Adviser & Broker
Chairman's statement
I am pleased to report the results for the six months ended 30 November 2007
show a further strong financial performance compared to the same period last
year.
In May 2007 the Group acquired Technology Management Group Limited ("TMG"),
which brought many synergies to the Group. The acquisition was successfully
integrated with our Group operations during July 2007.
Following the approval of all the resolutions at the Annual General Meeting in
September 2007, the shares were consolidated on a forty for one basis.
Trading results
These half-yearly results are the first the Group has reported based on the
recognition and measurement principles of the International Financial Reporting
Standards (IFRS) and, consequently, the comparative figures in respect of the
six months ended 30 November 2006 and year ended 31 May 2007 have been restated.
Revenue for the six month period was �5.3m, up 51% (2006: �3.5m), with recurring
revenues representing a robust 80% of total sales.
Operating profit before exceptional items and amortisation of intangible assets
rose 32% to �0.58m (2006: �0.44m). Statutory operating profit for the period
was �0.52m (2006: �0.18m). Adjusted basic earnings per share (based on earnings
before exceptional items and amortisation of intangible assets) increased by 6%
to 12.02p (2006: 11.32p).
Unaudited Unaudited
Six months Six months
To 30 Nov To 30 Nov
2007 2006
�'000 �'000
Revenue 5,340 3,525
Cost of sales (3,602) (2,240)
Gross profit 1,738 1,285
Gross profit % 32.5% 36.4%
Overheads (1,161) (848)
Operating profit before share-based payments, exceptional
items and amortisation of intangible assets 577 437
Return on sales % 10.8% 12.4%
Share-based payment costs - (44)
Exceptional items 79 (210)
Amortisation of intangible assets (138) -
Operating profit 518 183
Return on sales % 9.7% 5.2%
The cost saving benefits associated with the integration of TMG became effective
during August 2007. Exceptional items of �79,000 relates to a part reversal of
the restructuring provision no longer required.
International Financial Reporting Standards (IFRS)
The principle area of impact arising from preparing in accordance with the
recognition and measurement principles of applicable International Financial
Reporting Standards (IFRS) has been the treatment of goodwill.
The effect of IFRS on the reporting of our results is not significant and the
underlying operating performance of the Group and its cash flows remain
unaffected.
Dividends
The Board is unable to propose a dividend until such time as the accumulated
deficit on the Company's profit and loss account has been eliminated. When
appropriate, proposals will be put to shareholders to approve the utilisation of
the share premium account in eliminating the deficit.
Outlook
Trading since November has been in line with the Board's expectations and during
the next six month period the Group is looking to renew a number of major
contracts which are material to the Group. Sales prospects remain positive;
however it is too early to predict the outcome for the financial year as a
whole.
Consolidated income statement
for the six months ended 30 November 2007
Unaudited Unaudited Unaudited
Six months Six months Year ended
To 30 Nov To 30 Nov 31 May
2007 2006 2007
Note �'000 �'000 �'000
Continuing operations
Revenue 4 5,340 3,525 7,493
Cost of sales (3,602) (2,240) (4,764)
Gross profit 1,738 1,285 2,729
Administrative expenses (1,161) (848) (1,737)
Operating profit before share-based payments,
exceptional items and amortisation of intangible
assets 577 437 992
Share-based payment costs - (44) (58)
Exceptional items 79 (210) (946)
Amortisation of intangible assets (138) - -
Total administrative expenses (1,220) (1,102) (2,741)
Operating profit/(loss) 518 183 (12)
Finance income 3 1 1
Finance costs (47) (9) (28)
Profit/(loss) before taxation 474 175 (39)
Tax expense 5 (160) (43) (4)
Profit/(loss) for the period 314 132 (43)
All of the profit for the period is attributable to equity holders of the parent.
Earnings/(loss) per share
Basic 6 9.52p 4.63p (1.50p)
Diluted 6 9.52p 4.63p (1.50p)
There is no recognised income or expenses for the current or prior period other than stated above. As a
consequence a statement of recognised income and expenses has not been presented.
Consolidated balance sheet
for the six months ended 30 November 2007
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
Note �'000 �'000 �'000
ASSETS
Non-current assets
Property, plant & equipment 125 124 128
Goodwill 8,823 7,151 8,626
Other intangible assets 570 - 708
Total non-current assets 9,518 7,275 9,462
Current assets
Trade and other receivables 7 1,958 1,079 2,376
Inventories 634 460 696
Cash and cash equivalents 461 347 716
Total current assets 3,053 1,886 3,788
Total assets 12,571 9,161 13,250
LIABILITIES
Current liabilities
Trade and other payables 8 (2,009) (1,534) (2,803)
Short-term borrowings 9 (1,254) (444) (1,002)
Current tax payable (158) (99) (16)
Short-term provisions 10 (368) - (862)
Deferred income (1,805) (1,395) (1,876)
Total current liabilities (5,594) (3,472) (6,559)
Non-current liabilities
Long-term other payables 11 - (15) -
Long-term borrowings 12 - - (188)
Long-term provisions 13 (635) - (475)
Total non-current liabilities (635) (15) (663)
Total liabilities (6,229) (3,487) (7,222)
Net assets 6,342 5,674 6,028
EQUITY
Share capital 1,320 1,141 1,320
Share premium account 6,145 5,809 6,145
Retained earnings (1,123) (1,276) (1,437)
Total equity 6,342 5,674 6,028
Consolidated cash flow statement
for the six months ended 30 November 2007
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 30 Nov 31 May
Note 2007 2006 2007
�'000 �'000 �'000
Cash flows from operating activities
Profit/(loss) after taxation 314 132 (43)
Adjustments for:
Share-based payment costs - 44 58
Depreciation of property, plant & equipment 28 21 47
Amortisation of intangible assets 138 - -
Interest received (3) (1) (1)
Interest expense 47 9 28
Tax expense recognised in profit and loss 160 43 4
Decrease/(increase) in trade and other receivables 418 (111) (441)
Decrease in inventories 62 45 39
(Decrease)/increase in trade payables (486) 169 321
Decrease in accruals (128) (17) (140)
Decrease in deferred income (71) (128) (187)
(Decrease)/increase in provisions (496) - 862
Cash (absorbed by)/generated from operations (17) 206 547
Interest paid (28) (9) (28)
Taxes paid (18) - (55)
Net cash (used in)/generated from operating activities (63) 197 464
Cash flows from investing activities
Cash at bank acquired with subsidiary - - 521
Purchase of subsidiary undertaking (37) - (925)
Purchase of property, plant & equipment (25) (28) (55)
Deferred consideration paid (180) (180) (360)
Interest received 3 1 1
Net cash used in investing activities (239) (207) (818)
Cash flows from financing activities
Net proceeds of share issue - - 515
Payment of loan notes (180) - -
Net cash (used in)/generated from financing activities (180) - 515
Net (decrease)/increase in cash and cash equivalents 14 (482) (10) 161
Net cash/(overdraft) and cash equivalents at beginning of the
period 74 (87) (87)
Net (overdraft)/cash and cash equivalents at end of period (408) (97) 74
Analysed in Balance sheet as:
Cash at bank and in hand 461 347 716
Bank overdraft (869) (444) (642)
Net (overdraft)/cash and cash equivalents at end of period (408) (97) 74
Notes to the Half-yearly report
1. Principal Accounting policies
Basis of preparation
The consolidated financial half-yearly report has been prepared in accordance
with the recognition and measurement principles of applicable International
Financial Reporting Standards (IFRS) in issue as adopted by the European Union
(EU) and International Financial Reporting Standards as issued by the
International Accounting Standards Board (IFRS) and the Alternative Investment
Market (AIM) Rules for Companies. These are the Group's first IFRS consolidated
half-yearly financial statements and the Group has taken advantage of certain
exemptions available under IFRS1 "First Time Adoption of International Financial
Reporting Standards". The exemptions used are explained in note 2.
The half-year financial information has been prepared on a consistent basis with
the principal accounting policies to be used in preparing the Group's Annual
Report & Accounts for the year ending 31 May 2008 listed below. These are based
on IFRS principles adopted and effective at that date, or expected to be adopted
and effective at that date. Comparative figures for the six months ended 30
November 2006 and for the year ended 31 May 2007 have been restated to reflect
the changes in accounting policies as a result of the adoption of IFRS and
detailed in note 2 below.
The consolidated financial information has been prepared under the historical
cost convention.
Basis of consolidation
The Group financial statements consolidate those of the Company and its
subsidiary undertakings drawn up to 30 November 2007. Subsidiaries are entities
over which the Group has the power to control the financial and operating
policies so as to obtain benefits from its activities.
Acquisitions of subsidiaries are dealt with by the purchase method. The
purchase method involves the recognition at fair value of all identifiable
assets and liabilities, including contingent liabilities of the subsidiary, at
the acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. On the initial
recognition, the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are used as the bases for
subsequent measurement in accordance with the Group accounting policies.
Goodwill is stated after separating out identifiable intangible assets.
Goodwill represents the excess of acquisition cost over the fair value of the
Group's share of identifiable net assets of the acquired subsidiary at the date
of acquisition.
Revenue recognition
Revenue is measured by reference to the fair value of consideration received or
receivable by the Group for goods supplied and services provided, excluding
value added tax (VAT) and trade discounts. Service and support revenue is
recognised equally over the period of the contract, and equipment supply revenue
is recognised on delivery of goods.
Pension costs
The Group contributes to individual pension schemes at rates agreed by the
Company and the individual employee. Contributions are charged to the income
statement as they become payable. The Group provides no other post-retirement
benefits.
Lease contracts
Leases are classified as operating leases where the lessor retains all the risks
and rewards of ownership of the leased assets. Operaing lease rentals are
charged to the income statement on a straight-line basis over the lease term.
Share-based payments
All share based payments granted after 7 November 2002 that had not vested by 1
June 2006 are recognised in the financial statements. All goods and services
received in exchange for the grant of any share based payment are measured at
their fair values. Where employees are rewarded using share based payments, the
fair values of employees' services are determined indirectly by reference to the
fair value of the instrument granted to the employee. This fair value is
appraised at the grant date and excludes the impact of non-market vesting
conditions.
The expense is allocated over the vesting period based on the best available
estimate of the number of share options expected to vest.
Estimates are revised subsequently if there is any indication that the number of
share options expected to vest differs from previous estimates.
Any cumulative adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior periods if share
options that have vested are not exercised.
Upon exercise of the share options, the proceeds received net of costs are
credited to the share capital and share premium accounts. The fair value has
been arrived at through the use of the Black-Scholes model.
Non current assets
Property, plant & equipment
Property, plant & equipment are stated at cost less accumulated depreciation and
impairment losses if applicable.
Depreciation rates have been calculated to write down the cost of the assets to
their estimated residual value over their estimate useful economic lives as
follows:
Computer equipment 25%
Fixtures, fittings and office equipment 10%-20%
Short leasehold improvements over period of lease
Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value
of the Group's share of the identifiable net assets acquired is capitalised and
reviewed annually for impairment. Goodwill is carried at cost less accumulated
impairment losses. Negative goodwill is recognised immediately after
acquisition in the income statement.
Goodwill written off to reserves prior to date of transition to IFRS remains in
reserves. There is no re-instatement of goodwill that was amortised prior to
the transition to IFRS. Goodwill previously written off to reserves is not
written back to profit or loss on subsequent disposal.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination are measured initially at
fair value and are amortised on a systematic basis over their estimated useful
lives. The estimated useful lives applied in valuing customer relationships is
seven years and in valuing customer contracts is the unexpired period.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and
some are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the group at which
management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include
goodwill, other intangible assets with an indefinite useful life, and those
intangible assets not yet available for use are tested for impairment at least
annually. All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
Current assets
Trade receivables
Trade receivables do not carry any interest and are recorded at their fair value
on initial recognition, less provision for impairment. A provision for
impairment of trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the
original terms of the receivables. The amount of the provision is the
difference between the asset's carrying amount and the present value of
estimated future cash flows. Any change in the value of trade receivables
through impairment or reversal of impairment is recognised in administrative
expenses in the income statement.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
calculated using a first in, first out basis. Where necessary, provision is
made for obsolete or slow moving inventories. Certain inventory items are
available for repeated use and consequently are written off over a period of
three years.
Current liabilities
Trade payables
Trade payables are non interest bearing and are stated at their settlement
amount.
Bank borrowings
Bank borrowings are initially recorded at their fair value and subsequently
measured at amortised cost of using the effective interest method.
Deferred income
Deferred income represents the proportion of IT support services contracts where
income has been invoiced in advance of the service provided relating to future
accounting periods.
Finance costs
Finance costs, including any premiums payable or discounts, and direct issue
costs are recognised in the income statement over the relevant period of the
borrowings using the effective interest method.
Taxation
Current tax is the tax currently payable based on taxable profit for the period.
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and joint ventures
is not provided if reversal of these temporary differences can be controlled by
the group and it is probable that reversal will not occur in the foreseeable
future. In addition, tax losses available to be carried forward as well as
other income tax credits to the group are assessed for recognition as deferred
tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred
tax assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance
sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that are
charged or credited directly to equity (such as the revaluation of land) in
which case the related deferred tax is also charged or credited directly to
equity.
Publication of non-statutory accounts
The financial information contained in this document is unaudited and does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. The comparative figures for the year ended 31 May 2007 and the six
months to 30 November 2006 are not the Group's statutory accounts as they have
been restated to reflect the changes in accounting policies as a result of the
adoption of IFRS. A copy of the statutory accounts for year ended 31 May 2007,
which were prepared under UK GAAP (UK Generally Accepted Accounting Practice),
have been delivered to the Registrar of Companies, on which the audit report in
the last UK GAAP financial statements did not contain a statement under Section
237 (2) & (3) of the Companies Act 1985.
2. International Financial Reporting Standards
Introduction
On 30 July 2007, SiRViS IT plc reported its financial results for the year ended
31 May 2007, prepared for the last time under UK Generally Accepted Accounting
Practice ('UK GAAP'). Going forward the Group will prepare its consolidated
financial statements in accordance with the recognition and measurement
principles of applicable International Financial Reporting Standards (IFRS) in
issue as adopted by the European Union (EU) and International Financial
Reporting Standards as issued by the International Accounting Standards Board
(IFRS) and the Alternative Investment Market (AIM) Rules for Companies.
Explanation of transition to IFRS
The Group's financial statements for the year ending 31 May 2008 will be the
first annual financial statements that comply with IFRS. The Group has applied
IFRS 1 as relevant to half-yearly reports (First-time adoption of International
Financial Reporting) in preparing these half-year financial statements. The
last financial statements prepared under UK GAAP were for the year ended 31 May
2007 and the date of transition was therefore 1 June 2006. Presented below is
the reconciliation of profit for the year ended 31 May 2007 and the
reconciliations of equity at 1 June 2006, being the start of that period ("
Transition Date") and at 31 May 2007 (date of last UK GAAP financial statements)
as required by IFRS 1. In addition, the reconciliation of equity at 30 November
2006 and the reconciliation of profit for the six months ended 30 November 2006
have been included below as required by IFRS 1 to enable comparison of the 2007
half-year figures with those published in the corresponding period of the
previous financial year.
Impact on the reporting of our results
The impact on the reporting of our results is not significant and the underlying
operating performance of the Group and its cash flows remain unaffected.
IFRS transition changes
The transition to IFRS has resulted in the following changes:
a) Exemptions
IFRS 1 'First-time Adoption of International Financial Reporting Standards' sets
out the transition rules, which must be applied, when IFRS is adopted for the
first time. The standard sets out certain mandatory exemptions to retrospective
application and certain optional exemptions. The most significant optional
exemptions available and taken by the Group are as follows:
(i) Business combinations: The Group has adopted the exemption under IFRS
1 relating to business combinations which occurred before the date of
transition, 1 June 2006. The goodwill arising from combinations before that
date therefore remains at the amount shown under UK GAAP at 1 June 2006, subject
to any subsequent impairment.
(ii) Share-based transactions: The Group has adopted the exemption under
IFRS 1 which allows a first-time adopter to apply the standard only to share
options and equity instruments granted after 7 November 2002 that have not
vested by 1 June 2006.
b) Goodwill
Goodwill is not amortised under IFRS but is measured at cost less impairment
losses. Under UK GAAP, goodwill was amortised on a straight-line basis over the
time that the Group was estimated to benefit from it. The change does not
affect equity at 1 June 2006 because, as permitted by IFRS 1, goodwill arising
on acquisitions before 1 June 2006 (date of transition to IFRS) has been frozen
at the UK GAAP amounts and subject to being tested for impairment at that date
and subsequent accounting period dates. The results of the impairment
assessment adjusts a previous loss into a profit by reversing amortisation of
goodwill for the six months to 30 November 2006 by �223,000 and adjusts a
previous loss by reversing amortisation of goodwill for the year to 31 May 2007
by �450,000 with corresponding increases in retained earnings. Identifiable
intangible assets of �708,000 for the year to 31 May 2007 have been recognised
separately from goodwill on acquisition of TMG in accordance with IFRS3. These
intangible assets relate to the estimated value of customer relationships and
unexpired period of contracts.
c) Deferred tax
A deferred tax liability has been recognised, which were separately identified
on the acquisition of Technology Management Group Limited (TMG) under IFRS
3"Business Combinations". No adjustment is recorded in the UK GAAP to IFRS
reconciliations as this liability is off-set by the deferred tax assets arising
from accelerated capital allowances and brought forward losses within TMG. These
deferred tax assets have not been recognised previously under UK GAAP, as there
was significant uncertainty surrounding their recoverability, they have been
recognised in accordance with IAS 12 to the extent that they are recoverable
against the reversal of the deferred tax liability.
d) Key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates. The key
assets and liabilities are discussed below:
(i) Valuation of intangibles acquired in business combinations
Determining the fair value of intangibles acquired in business combinations
requires an estimation of value of the cash flows related to the identified
intangibles and a suitable discount rate in order to calculate the present
value.
(ii) Impairment of goodwill and other intangibles
Determining whether goodwill is impaired requires an estimation of the value in
use of the cash generating units to which goodwill has been allocated. The
value in use calculation requires an entity to estimate the future cash flows
expected to arise from the cash generating unit and a suitable discount rate in
order to calculate present value.
Reconciliation of UK GAAP financial information to IFRS
Consolidated Income Statement for the six months ended 30 November 2006
Reported IFRS 3 Reported
under Business under
UK GAAP Combinations IFRS
�'000 �'000 �'000
Continuing operations
Revenue 3,525 - 3,525
Cost of sales (2,240) - (2,240)
Gross profit 1,285 - 1,285
Administrative expenses (848) - (848)
Operating profit before share-based payments,
exceptional items and amortisation of goodwill 437 - 437
Share-based payment costs (44) - (44)
Exceptional items (210) - (210)
Amortisation of goodwill (223) 223 -
Total administrative expenses (1,325) 223 (1,102)
Operating (loss)/profit (40) 223 183
Finance income 1 - 1
Finance costs (9) - (9)
(Loss)/profit before taxation (48) 223 175
Tax expense (43) - (43)
(Loss)/profit for the period (91) 223 132
(Loss)/earnings per share
Basic and diluted (3.19p) 7.82p 4.63p
Reconciliation of UK GAAP financial information to IFRS
Consolidated Income Statement for the year ended 31 May 2007
Reported IFRS 3 Reported
under Business under
UK GAAP Combinations IFRS
�'000 �'000 �'000
Continuing operations
Revenue 7,493 - 7,493
Cost of sales (4,764) - (4,764)
Gross profit 2,729 - 2,729
Administrative expenses (1,737) - (1,737)
Operating profit before share-based payments,
exceptional items and amortisation of goodwill 992 - 992
Share-based payment costs (58) - (58)
Exceptional items (946) - (946)
Amortisation of goodwill (450) 450 -
Total administrative expenses (3,191) 450 (2,741)
Operating loss (462) 450 (12)
Finance income 1 - 1
Finance costs (28) - (28)
Loss before taxation (489) 450 (39)
Tax expense (4) - (4)
Loss for the period (493) 450 (43)
Loss per share
Basic and diluted (17.18p) 15.68p (1.50p)
Reconciliation of UK GAAP financial information to IFRS
Consolidated balance sheet as at 1 June 2006
Reported Reported
under IFRS under
UK GAAP Adjustment IFRS
�'000 �'000 �'000
ASSETS
Non-current assets
Property, plant & equipment 117 - 117
Goodwill 7,182 - 7,182
Total non-current assets 7,299 - 7,299
Current assets
Trade and other receivables 968 - 968
Inventories 505 - 505
Cash and cash equivalents 239 - 239
Total current assets 1,712 - 1,712
Total assets 9,011 - 9,011
LIABILITIES
Current liabilities
Trade and other payables (1,178) - (1,178)
Short-term borrowings (326) - (326)
Current tax payable (51) - (51)
Short-term provisions (209) - (209)
Deferred income (1,523) - (1,523)
Total current liabilities (3,287) - (3,287)
Non-current liabilities
Long-term other payables (226) - (226)
Total non-current liabilities (226) - (226)
Total liabilities (3,513) - (3,513)
Net assets 5,498 - 5,498
EQUITY
Share capital 1,141 - 1,141
Share premium account 5,809 - 5,809
Retained earnings (1,452) - (1,452)
Total equity 5,498 - 5,498
Reconciliation of UK GAAP financial information to IFRS
Consolidated balance sheet as at 30 November 2006
Reported IFRS 3 Reported
under Business under
UK GAAP Combinations IFRS
�'000 �'000 �'000
ASSETS
Non-current assets
Property, plant & equipment 124 - 124
Goodwill 6,928 223 7,151
Total non-current assets 7,052 223 7,275
Current assets
Trade and other receivables 1,079 - 1,079
Inventories 460 - 460
Cash and cash equivalents 347 - 347
Total current assets 1,886 - 1,886
Total assets 8,938 223 9,161
LIABILITIES
Current liabilities
Trade and other payables (1,342) - (1,342)
Short-term borrowings (444) - (444)
Current tax payable (99) - (99)
Short-term provisions (192) - (192)
Deferred income (1,395) - (1,395)
Total current liabilities (3,472) - (3,472)
Non-current liabilities
Long-term other payables (15) - (15)
Total non-current liabilities (15) - (15)
Total liabilities (3,487) - (3,487)
Net assets 5,451 223 5,674
EQUITY
Share capital 1,141 - 1,141
Share premium account 5,809 - 5,809
Retained earnings (1,499) 223 (1,276)
Total equity 5,451 223 5,674
Reconciliation of UK GAAP financial information to IFRS
Consolidated balance sheet as at 31 May 2007
Reported IFRS 3 IAS 38 Reported
under Business Intangible Assets under
UK GAAP Combinations �'000 IFRS
�'000 �'000 �'000
ASSETS
Non-current assets
Property, plant & equipment 128 - - 128
Goodwill 8,884 450 (708) 8,626
Other intangible assets - - 708 708
Total non-current assets 9,012 450 - 9,462
Current assets
Trade and other receivables 2,376 - - 2,376
Inventories 696 - - 696
Cash and cash equivalents 716 - - 716
Total current assets 3,788 - - 3,788
Total assets 12,800 450 - 13,250
LIABILITIES
Current liabilities
Trade and other payables (1,691) - - (1,691)
Short-term borrowings (1,002) - - (1,002)
Current tax payable (16) - - (16)
Short-term provisions (1,974) - - (1,974)
Deferred income (1,876) - - (1,876)
Total current liabilities (6,559) - - (6,559)
Non-current liabilities
Long-term other payables (188) - - (188)
Long-term provisions (475) - - (475)
Total non-current liabilities (663) - - (663)
Total liabilities (7,222) - - (7,222)
Net assets 5,578 450 - 6,028
EQUITY
Share capital 1,320 - - 1,320
Share premium account 6,145 - - 6,145
Retained earnings (1,887) 450 - (1,437)
Total equity 5,578 450 - 6,028
3. Consolidated statement of changes in equity
Share Share Retained Total
capital premium earnings
account
�'000 �'000 �'000 �'000
At 1 June 2006 1,141 5,809 (1,452) 5,498
Profit for the six months - - 132 132
Other movements
Equity settled share-based payment charge - - 44 44
At 30 November 2006 1,141 5,809 (1,276) 5,674
Loss for the six months - - (175) (175)
Other movements
Proceeds from issue of shares 179 336 - 515
Equity settled share-based payment charge - - 14 14
At 31 May 2007 1,320 6,145 (1,437) 6,028
Profit for the six months - - 314 314
At 30 November 2007 1,320 6,145 (1,123) 6,342
4. Segmental analysis
Six months to Six months to Year to
30 November 2007 30 November 2006 31 May 2007
Gross Gross Gross
Revenue Profit Revenue Profit Revenue Profit
�'000 �'000 �'000 �'000 �'000 �'000
Sale of computer services 4,780 1,659 3,334 1,244 6,880 2,622
Sale of computer hardware 560 79 191 41 613 107
5,340 1,738 3,525 1,285 7,493 2,729
5. Tax expense
The tax expense for the six months has been based on an estimated average annual
effective tax rate, consistent with the annual assessment of taxes.
6. Earnings/(loss) per share
The earnings/(loss) per share is based on the profit/(loss) for the financial
period and the following number of shares:
Unaudited Unaudited Unaudited
six months six months year
to 30 November 2007 to 30 November 2006 to 31 May 2007
Number of shares Number of shares Number of shares
Weighted average number of shares
For basic earnings/(loss) per share 3,300,000 2,851,656 2,870,081
For diluted earnings/(loss) per share 3,300,000 2,851,656 2,870,081
Adjusted earnings/(loss) per share calculations have been computed as the
Directors consider that they are useful to shareholders and investors. These
are based on the following profits/(losses) and the above number of shares:
Unaudited Unaudited Unaudited
six months six months year
to 30 November 2007 to 30 November 2006 to 31 May 2007
Per share Per share Per share
Amount Basic Amount Basic (Loss)/ Amount Basic
Earnings and diluted Earnings and diluted Earnings and diluted
�'000 p �'000 p �'000 p
Profit/(loss) for the period 314 9.52 132 4.63 (43) (1.50)
Share-based payments - - 44 1.54 58 2.02
Previous years tax charge
adjustment - - - - 4 0.14
Amortisation of intangibles 138 4.18 - - - -
Adjusted earnings pre
exceptional items per share 452 13.70 176 6.17 19 0.66
Exceptional items (net of tax
where applicable):
Abortive acquisition costs - - 147 5.15 29 1.01
Unsolicited approach - - - - 41 1.43
Restructuring provision (55) (1.68) - - 346 12.06
Onerous lease provision - - - - 256 8.92
Adjusted earnings and
earnings per share 397 12.02 323 11.32 691 24.08
7. Trade and other receivables
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Trade debtors 1,555 863 1,751
Prepayments and accrued income 403 216 625
1,958 1,079 2,376
8. Trade and other payables
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Trade creditors 425 610 942
Accruals 984 192 1,112
Deferred consideration 15 360 195
Other taxation and social security 585 372 554
2,009 1,534 2,803
9. Short-term borrowings
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Loan notes 385 - 360
Bank overdraft 869 444 642
1,254 444 1,002
The bank overdraft is secured by a fixed and floating charge on the assets of
the Group. The loan notes are repayable for a balance of �253,000 at a rate of
�30,000 per month and the remainder of �132,000 is payable in November 2008.
10. Short-term provisions
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Restructuring provision 80 - 477
Onerous lease provision 288 - 385
368 - 862
11. Long-term other payables
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Deferred consideration - 15 -
- 15 -
12. Long-term borrowings
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Loan notes - - 188
- - 188
13. Long-term provisions
Unaudited Unaudited Unaudited
As at As at As at
30 Nov 2007 30 Nov 2006 31 May 2007
�'000 �'000 �'000
Contingent consideration 635 - 475
635 - 475
14. Reconciliation of net cash flow movement
Unaudited Unaudited
As at As at
30 Nov 2007 31 May 2007
�'000 �'000
(Decrease)/increase in cash (482) 161
Cash used in payment of loan notes 180 -
Change in net debt resulting from cash flows (302) 161
Other non-cash items:
Accrual for finance cost of loan notes (17) -
Loan notes issued - (548)
Movement in net debt in the period (319) (387)
Net debt at 1 June (474) (87)
Net debt at end of period (793) (474)
Other
1 June Cash non-cash 30 Nov
2007 flow charges 2007
�000 �'000 �'000 �'000
Net cash/(overdraft)
Cash at bank and in hand 716 (255) - 461
Bank overdraft (642) (227) - (869)
74 (482) - (408)
Debt:
Debts falling due within one year (360) - (25) (385)
Debts falling due after one year (188) 180 8 -
Net debt (474) (302) (17) (793)
15. Authorised and issued share capital
At the Annual General Meeting held on 27 September 2007 a resolution was passed
to increase the authorised share capital of the Company from �1,500,000 to
�2,000,000 by the creation of an additional 50,000,000 ordinary shares of 1
pence each ranking pari passu in all respects with the existing shares. Two
further resolutions were passed to consolidate the issued and unissued ordinary
shares of the Company. For every forty issued and unissued ordinary shares of 1
pence each in the capital of the Company they were consolidated and redesignated
as one ordinary share of 40 pence.
16. Dividends
No interim dividend has been declared on the ordinary shares (2006: Nil).
17. Other information
The half-yearly report was approved by the directors of the Company on 11
February 2008 and is being circulated to all shareholders. Further copies are
available from the Group's head office at Blackbrook House, Ashbourne Road,
Blackbrook, Belper, Derbyshire, DE56 2DB or on the Group's website
www.sirvisit.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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