Final Results

17th Feb 2009 07:00



17 February 2009

ELECTRIC WORD PLC

Preliminary Results to 30 November 2008

STRONG GROWTH SUPPORTED BY RESILIENT MARKETS

Electric Word, the specialist information publisher, announced today a strong set of results for the year ended 30 November 2008.

Turnover up 28% to £17.3m, driven by both organic growth and acquisitions

Adjusted profit before tax up 22% to £1.8m

Performance reflects defensive nature of Group's media businesses in education and sport

Strong performance in professional education division with adjusted profit growth of 51% and improvement in margins

Professional sports business achieved strong growth in revenue subscriptions

Current trading in line with board's expectations

revenue to date ahead of the same time last year

good forward bookings in both professional education events and sport business advertising.

Julian Turner, Chief Executive of Electric Word, commented:

"This was a good set of results achieved in a difficult economic environment, reflecting the defensive quality of Electric Word's business. 

"Current trading is in line with the Board's expectations. In the current economic environment Electric Word is fortunate to be operating predominantly in the UK education and international sport market sectors. The professional education business is backed by committed public spending, with good forward visibility and our publishing remains focussed on likely educational growth areas. The international sports market benefits from its link with the bidding cycles of sports events and the increasing importance of sport in regional development, particularly in emerging markets." 

  

ENDS

Julian Turner, Chief Executive
Electric Word	020 7954 3470
Andrew Potts, Panmure Gordon Helen Thomas / Tim Spratt	020 7614 8390
Financial Dynamics	020 7831 3113

Notes to Editors

Electric Word plc delivers specialist information in a wide range of formats to communities in two market sectors

Education: serves professional communities in schools and other institutions, including school leaders and managers, special needs and speech therapy professionals, teachers and parents.

Sport: covers the communities of amateur and elite sports competitors, governing bodies, media bidding for sports content, venues, sponsoring brands and the online gaming industry.

The range of products and services offered to these communities include subscription newsletters, magazines, websites, events, books, special reports and bespoke research and publishing. In 2008 67% of revenue came from selling content (2007: 60%), including 25% from subscription revenue (2007: 33%), and 33% came from selling access to these communities (2007: 40%).

Financial summary (£000)	2008	2007	Change
Turnover	17,335	13,508	28%
Gross Profit	7,890	6,262	26%
Adjusted EBITA*	1,993	1,495	33%
Adjusted profit before tax*	1,790	1,467	22%
Less: amortisation and impairment	(1,367)	(270)
Less: restructuring costs / non-recurring gains	(319)	(103)
Less: notional accounting charges	(313)	(126)
Profit before tax (PBT)	(209)	968	(122)%
Adjusted earnings per share*	1.08	0.88	23%
Cash flow from operating activities before interest and tax	167	865	(81)%
Cash balance	340	1,116	(70)%

*Adjusted numbers, as set out in note 5, exclude amortisation and impairment of goodwill and intangible assets, exceptional gains and costs (non-trading and of a non-recurring nature), the tax impact of the adjusting items, the use of tax losses and tax credits from recognition of tax losses, and notional accounting charges. The amount for notional accounting charges encompasses the unwinding of discounts on preference shares, provisions and share based payment costs. The adjusted earnings per share is fully diluted and before the deduction for minority interests.

Electric Word plc

CHAIRMAN'S STATEMENT

For the year ended 30 November 2008

Dear fellow shareholders,

I am pleased to report that 2008 once again saw Electric Word achieve significant growth in both its revenues and adjusted pre-tax profits, which climbed 32% to reach £1.8m, or 1.1p per share - in line with our pre-close statement in December and reflecting good organic and acquired growth. In what has been a difficult year to do business, this represents an excellent achievement that underlines the strength and resilience of your company's core information products and its markets in education and sport.

Electric Word's business is based on providing specialist information to targeted communities of professionals in education and the business of sport, which together account for 84% of turnover, the great majority through sales to institutions such as schools and businesses. The remaining 16% is derived from individual consumers such as parents and sports people. 67% of revenue is generated from selling valuable content such as newsletter and magazine subscriptions, books and conferences; 33% of revenue is from selling access to our communities in the form of commerce revenues, bespoke publishing and advertising (the latter accounting for just 15% of group turnover).

In 2008 the continuing businesses demonstrated the robust quality of this model. In addition, the growth of the e-marketing channel in each part of the business helped to enhance margins while investment continued in organic product development, particularly in books and conferences in the professional education division.

At a time of considerable economic uncertainty, the Group clearly benefited from its focus on its chosen specialist markets. Schools in the UK continue to face new challenges in managing broader responsibilities around both education and the welfare of children. The organisation of international sports events continues to inspire and excite governments, broadcasters and administrators around the world. 

While the existing businesses continued to thrive in these markets, Electric Word also worked to integrate the complementary businesses it acquired in 2007 and 2008: Special Education Publishing Limited (acquired in February 2008), which added magazines to the professional education business; and Speechmark Publishing Limited (acquired in October 2007), which publishes practical workbooks for speech therapists and other special needs professionals in the UK and internationally. Both businesses benefited from sharing costs and accessing the marketing expertise and database of schools customers built up in the existing Optimus and CKP businesses. 

Also in 2007 Electric Word entered the parents publishing market through MyChild Limited ("MyChild"), initially with a 10% holding and then, in November 2007, by acquiring a majority stake. MyChild sells a bundle of publishing and software products to parents wishing to support their children's attainment at school. While it complements our professional education business in subject matter and our sports consumer business in marketing expertise, the MyChild acquisition has not been as smooth as we had anticipated. The Group expected to make a significant cash investment in expanding the MyChild sales and marketing effort but during the course of 2008 a number of operational problems emerged which undermined sales effectiveness and increased costs. In the fourth quarter of 2008 a decision was taken to restructure the business, close the separate MyChild office, cease publishing the legacy print magazine and focus effort on building the online business that had shown real promise during the year. As a result of the reorganisation the Group incurred exceptional restructuring costs of £340,000 while greatly reducing the risk of further significant losses in the future.

The parents market remains of great interest and potential importance for the Group and My Child will now form part of a specialist consumer publishing division along with the Peak Performance business. The combination of online and offline content along with the Group's strong e-marketing competencies bears great promise for the future.

Electric Word enters 2009 with a strengthened business, particularly in its professional education publishing division. Its particular market sectors, revenue mix and product development opportunities mean that the Group can look forward to further years of growth despite the challenges of the broader economic environment. 

  

The Board would like to thank the staff in all Electric Word's divisions, as well as our external experts and partners, for their contribution to the results achieved in 2008 and the opportunities we can look forward to in the future. Finally, I would also like to take the opportunity to thank Chris Kington for his excellent service to the Board since 2002. Chris co-founded the Optimus Professional Publishing business before its acquisition by Electric Word and has led the Group's strategy in the education market over many years. He retires from the Board at the end of this month after another year of excellent progress in the professional education business but remains as a key employee and will continue to guide the Group's schools publishing policy and direction.

Peter Rigby

Chairman

17 February 2009

Electric Word plc

CHIEF EXECUTIVE'S STATEMENT

For the year ended 30 November 2008

Revenue by activity

£000	2008		2007
Subscriptions	4,249	25%	4,494	33%
Event delegates	2,184	12%	1,762	13%
Books and reports	5,266	30%	1,839	14%
Sales of content	11,699	67%	8,095	60%
Advertising / sponsorship	2,608	15%	2,049	15%
Bespoke publishing services	459	3%	584	4%
Commerce	2,569	15%	2,780	21%
Sales of access to communities	5,636	33%	5,413	40%
Total	17,335	100%	13,508	100%

Profit by sector

£000	2008	2007	Increase
Education	1,805	1,327	36%
Sport	1,014	983	3%
Group overhead	(826)	(815)	(1)%
Adjusted EBITA*	1,993	1,495	33%
Interest (excluding notional)	(203)	(28)	625%
Adjusted profit before tax*	1,790	1,467	22%

*Adjusted numbers, as set out in note 5, exclude amortisation and impairment of goodwill and intangible assets, exceptional gains and costs (non-trading and of a non-recurring nature), the tax impact of the adjusting items, the use of tax losses and tax credits from recognition of tax losses, and notional accounting charges. The amount for notional accounting charges encompasses the unwinding of discounts on preference shares, provisions and share based payment costs. The adjusted earnings per share is fully diluted and before the deduction for minority interests.

This was a good set of results achieved in a difficult macro-economic environment, reflecting the defensive quality of Electric Word's business. In 2008 Electric Word grew revenue by 28% and adjusted operating profits by 33%, made up of 20% from organic profit growth and 13% that was acquired. As the acquisitions were funded entirely through new debt, net adjusted interest charges in the period increased from £28k to £203k (excluding notional interest), however adjusted profit before tax across the Group still improved by 22% to £1.8m and adjusted EPS grew 23% from 0.88p to 1.08p per share. 

Profit by division

£000	Education		Sport		Consumer	Professional	Central	Group
2008	Consumer	Professional	Consumer	Professional	Total	Total	Overhead	Total
Revenue	1,635	10,668	1,200	3,832	2,835	14,500	-	17,335
Adj EBITA*	(161)	1,966	266	748	105	2,714	(826)	1,993
Margin	(10)%	18%	22%	20%	4%	19%		12%
2007
Revenue	97	8,581	1,294	3,536	1,391	12,117	-	13,508
Adj EBITA*	29	1,298	260	723	289	2,021	(816)	1,494
Margin	30%	15%	20%	20%	21%	17%		11%
Variance
Revenue	1,538	2,087	(94)	296	1,444	2,383	-	3,827
Adj EBITA*	(190)	668	6	25	(184)	693	(10)	499
Margin	(12)%	32%	(7)%	8%	(13)%	29%		13%

  

Professional education division

£000	2008	2007	Change
Turnover	10,668	8,581	24%
Adjusted EBITA*	1,966	1,298	51%
Profit margin	18%	15%

The strongest contributor to the Group's profit growth in 2008 was the professional education division, which achieved a 51% increase in adjusted profits. Margins also improved from 15% to 18%, reflecting the growth of the e-marketing channel and a better balance between new and more established titles in book publishing. The division comprises the Optimus, Incentive Plus and Speechmark businesses and provides specialist management and professional development information for school teachers and other professionals working in education. The provision of education for children with special educational and behavioural needs in mainstream schools continues to place new demands on teachers' professional education and requires a range of specialist resources. The division includes subscription newsletters, conferences, books, magazines and a catalogue of third-party products relating to children's behavioural and emotional development.

Around a third of the division's profit improvement came from increased margins in the continuing businesses, up from 15% to 16%. The main drivers here were the growth in scale and value of the e-marketing channel, the pruning of the loss-making online training business and a continuing gradual improvement in margins on books. The Optimus professional education books business is a young and fast-growing business which remains weighted towards relatively new titles. Over time it is expected that margins will continue to improve as the more profitable backlist increases its contribution. 

The books business was also significantly enhanced by the acquisition of Speechmark Publishing Limited ("Speechmark") in October 2007. Speechmark publishes for speech therapists, special needs co-ordinators and teachers, care workers and mental health professionals. Its acquisition helped increase the scale of the revenues from the professional education books business from revenues of £1.2m in 2007 to £3.2m in 2008. Unlike Optimus, Speechmark has a strong backlist of established titles and margins are higher. Sharing resources with other Group businesses also improved margins. 

Special Education Publishing Limited, acquired in February 2008, also made progress in the year but at very low margins as marketing on magazine subscriptions was successfully increased. Together, the acquired elements of the professional education businesses contributed £340k in the year, improving the division's profits by 26% on the prior year.

Professional sport division

£000	2008	2007	Change
Turnover	3,832	3,536	8%
Adjusted EBITA*	748	723	3%
Profit margin	20%	20%

SportBusiness Group publishes for professionals working in the sports industry in sports governing bodies, the media, sports marketing, sponsorship and club and event management. SportBusiness Group, including its iGaming Business subsidiary, draws its revenue from subscriptions, special reports, events, contract publishing and advertising. Revenues grew by 8% (including advertising revenue growth of 15%, a notable achievement in the year), and profits increased by 3% over 2007 - a year that included a significant publishing contract that concluded in May 2007. 

The strongest revenue growth in SportBusiness Group came from subscription revenue, as yields were improved, and events in the iGaming sphere.

Specialist Consumer publishing division

£000	2008	2007	Change
Turnover	2,835	1,391	104%
Adjusted EBITA*	105	289	-64%
Profit margin	4%	21%

Electric Word's new specialist consumer publishing division covers both education and sports markets. The Sports Performance websites, newsletters and books, which are aimed at competitive athletes and coaches, achieved a small increase in earnings in the year on slightly lower revenues as the business continues to migrate from offline to online.

My Child, in which a majority stake was acquired in November 2007, provides information and products for parents to support their children's educational development. The My Child business has evolved over the course of the year, during which it became apparent that the investment in building subscriptions in the first half of 2008 would not generate an adequate return whereas a valuable asset was being created in the website and associated email database. In the final quarter of the year the business was restructured and continues into 2009 as an online business only, with the print magazine and its associated costs brought to an end.

The reshaping of the My Child business has incurred £340k of one-off restructuring costs, all of which will be provided for in 2008 and which have been detailed in note 5 to the accounts. Going forward the business will have around £800,000 lower revenues but will save even more than that in costs after the closure of the My Child premises and internal telesales operation and relocation of the remaining staff to the existing Electric Word London offices. As a result, My Child is expected to contribute to earnings in 2009 as part of a new specialist consumer division alongside the Sports Performance business. The success in building online communities around electronic newsletters in these and other areas of the business have created an opportunity to further strengthen the company's online advertising sales capacity in the coming year.

Central costs

Central costs in 2008 remained stable at £826,000 (£816,000 in 2007), reducing as a proportion of Group revenue to 4.7% (6.0% in 2007). Net adjusted interest charges (excluding notional interest) in the period increased to £203,000 (2007: £28,000) in line with the additional debt taken on to finance the acquisitions made in 2007.

Outlook

Current trading is in line with the Board's expectations, with revenue to date ahead of 2008 and good forward bookings in both professional education events and sport business advertising. 

In the current economic environment Electric Word is fortunate to be operating predominantly in the UK education and international sport market sectors. The professional education business is backed by committed public spending, with good forward visibility and focused on likely educational growth areas such as teacher professional development, school management, special needs, thinking skills and behaviour management. The international sports market benefits from its link with the bidding cycles of sports events and the increasing importance of sport in regional development, particularly in emerging markets.

Financial Review

The Group made an adjusted profit before tax of £1.8m (2007: £1.5m) despite suffering higher adjusted net interest charges as a result of the debt taken out to finance the acquisitions of Speechmark and My Child. Net debt at the end of the year stood at £2.7m (2007: £1.4m). The debt was increased in the period to meet deferred consideration obligations from the two acquisitions and also the cash cost (which will extend into 2009) of the My Child restructuring in the period. This funding, coupled with the cash negative positions of the balance sheets acquired,, results in the lower cash inflow from operating activities in the year of £0.2m (2007: £0.9m). Adjusted interest cover, as used for the Group's bank covenants and calculated as adjusted EBITDA divided by finance costs excluding notional accounting charges, was in excess of 6 times throughout 2008 and 2007.

The Group's adjusted results (note 5) allow shareholders to gain a further understanding of the trading performance of the Group. Profits are adjusted for items not perceived by management to be part of the underlying trends in the business and the related tax effect of those items.

£000	2008	2007	Change
Adjusted profit before tax*	1,790	1,467	22%
Less: amortisation and impairment	(1,367)	(270)
Less: restructuring costs / non-recurring gains	(319)	(103)
Less: notional accounting charges	(313)	(126)
Profit before tax (PBT)	(209)	968	(122)%

Items in the results have been adjusted for include impairment expenses, restructuring costs and notional interest costs (where interest has been charged on items which do not actually suffer any interest). The restructuring costs in the current year have been taken on the My Child business changes (note 5) and are intended to fully provide for such related costs. The impairment expense (note 9) consists of £700,000 (2007: £nil) in relation to the My Child  intangible asset being written down as with the business change it was no longer appropriate to carry the full value acquired going forwards and £170,000 (2007: £66,000) on recognition of deferred tax asset on pre-acquisition losses from the SportBusiness Group.

As a result of these additional non-trading costs diluted earnings per share is (0.26)p (2007: 0.48p), but on an adjusted basis reflecting underlying trading it exceeds 1p per share for the first time at 1.08p (2007: 0.88p).

Julian Turner

Chief Executive

17 February 2009

Electric Word plc

CONSOLIDATED INCOME STATEMENT

For the year ended 30 November 2008 Unaudited

		2008	2007
			As restated
	Note	£'000	£'000
Revenue	2	17,335	13,508
Cost of Sales - Direct costs	2	(5,892)	(4,935)
Cost of Sales - Marketing expenses	2	(3,553)	(2,311)
GROSS PROFIT		7,890	6,262
Other operating expenses		(5,977)	(4,793)
Depreciation expense	9	(128)	(127)
Amortisation expense	9	(497)	(204)
Total administrative expenses		(6,602)	(5,124)
OPERATING PROFIT		1,288	1,138
Impairment expense	9	(870)	(66)
Restructuring costs	5	(340)	-
Non-operating income and expense	6	21	-
Finance costs	7	(350)	(137)
Investment income	8	42	33
(LOSS) / PROFIT BEFORE TAX	9	(209)	968
Taxation	10	(117)	(220)
(LOSS) / PROFIT FOR THE FINANCIAL YEAR		(326)	748
Attributable to:
- Equity holders of the parent		(367)	742
- Minority interest		41	6
		(326)	748
(LOSS) / EARNINGS PER SHARE
Basic	11	(0.26)p	0.53p
Diluted	11	(0.26)p	0.48p

The operating profit for the year arises from the Group's continuing operations.

Electric Word plc

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the year ended 30 November 2008 Unaudited

		Group
		2008	2007
			As restated
		£'000	£'000
(Loss) / profit for the year		(326)	748
Tax taken direct to Reserve for share based payment		(366)	(72)
Total recognised income and expense for the year		(692)	676
Attributable to:
- Equity holders of the parent		(733)	670
- Minority interests		41	6
		(692)	676

Electric Word plc

CONSOLIDATED BALANCE SHEET

As at 30 November 2008 Unaudited

			Group
				As restated
			2008	2007
		Notes	£'000	£'000
ASSETS
Non-current assets
Goodwill		14	8,811	8,465
Other intangible assets		14	2,465	2,988
Property, plant and equipment			364	311
Investments			-	-
Deferred tax assets			746	1,261
			12,386	13,025
CURRENT ASSETS
Inventories			1,223	803
Trade and other receivables			3,253	3,131
Cash and cash equivalents		15	395	1,116
			4,871	5,050
TOTAL ASSETS			17,257	18,075
EQUITY AND LIABILITIES
Capital and Reserves
Called up ordinary share capital			1,450	1,424
Preference share capital			875	-
Other reserve			(454)	-
Share premium account			3,106	3,039
Merger reserve			105	105
Reserve for own shares			(103)	(103)
Reserve for share based payments			364	522
Retained earnings			(17)	349
Equity attributable to equity holders of the parent		13	5,326	5,336
Minority Interest			72	28
TOTAL EQUITY			5,398	5,364
Non-current liabilities
Borrowings		12	2,201	1,799
Deferred tax liabilities			676	797
Obligations under finance leases			7	28
Preference shares			929	878
			3,813	3,502
Current liabilities
Borrowings		12	863	680
Current tax liabilities			235	177
Trade payables and other payables			2,794	2,988
Provisions			255	1,008
Obligations under finance leases			19	38
Deferred income			3,880	4,318
			8,046	9,209
TOTAL LIABILITIES			11,859	12,711
TOTAL EQUITY AND LIABILITIES			17,257	18,075

Electric Word plc

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 November 2008 Unaudited

		Group
			As restated
		2008	2007
	Notes	£'000	£'000
Operating profit		1,288	1,138
Amortisation	9	497	204
Depreciation	9	128	127
Share based payment charges	9	208	50
Restructuring costs	5	(340)	-
Operating cash flows before movement in working capital		1,781	1,519
(Increase)/decrease in inventories		(419)	(16)
Decrease/(increase) in receivables		10	(692)
Increase/(decrease) in payables		(1,205)	54
Cash flow from operating activities before interest and tax		167	865
Interest paid		(245)	(61)
Taxation paid		(206)	(4)
Cash inflow from operating activities		(284)	800
INVESTING ACTIVITIES
Acquisitions of subsidiaries, net of cash acquired		(140)	(2,558)
Sale of disposal option	6	21	-
Deferred consideration paid		(725)	(254)
Purchase of property plant and equipment		(181)	(116)
Purchase of intangible assets		(11)	(118)
Interest received	8	42	33
Net cash used in investing activities		(994)	(3,013)
FINANCING
Proceeds from issuance of ordinary shares		12	102
Proceeds from issuance of preference shares		-	-
Proceeds of new long term borrowings	12	600	1,500
Proceeds of new short term borrowings	12	100	500
Repayments of borrowings		(170)	(170)
Repayments of obligations under finance leases		(40)	(42)
Purchase of own shares		-	(36)
Net cash from financing activities		502	1,854
NET DECREASE IN CASH AND CASH EQUIVALENTS		(776)	(359)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF YEAR		1,116	1,475
CASH AND CASH EQUIVALENTS AT END OF YEAR	15	340	1,116

Electric Word plc

NOTES TO THE FINANCIAL INFORMATION

For the year ended 30 November 2008 Unaudited

 

1 BASIS OF PREPARATION

The financial information has been prepared in accordance with International Financial Reporting Standards as endorsed by the EU ("IFRS"), IFRIC interpretations and the Companies Act 1985 applicable to companies reporting under IFRS. The 2008 financial statements are the first to be prepared in accordance with IFRS. Comparative figures for 2007 and the balance sheet as at 1 December 2006 have been restated accordingly. The impact of these changes is set out in note 16.

The financial information has been prepared in accordance with the accounting policies as detailed in the Group's interim financial report to 31 May 2008 and is unaudited. The financial information in this announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. Statutory accounts for the previous financial year ended 30 November 2007 (prepared in accordance with UK GAAP) have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985. The auditors have indicated that they intend to give an unqualified report, which will not contain any statement under section 237(2) or (3) of the Companies Act 1985, on the statutory accounts for the year ended 30 November 2008. Copies of the Company's Report and Accounts will be sent to shareholders shortly and will be available at the registered office of the company: 33-41 Dallington Street, London, EC1V 0BB.

2	REVENUE AND COST OF SALES

An analysis of the Group's income is as follows:

	2008	2007
Revenue	£'000	£'000
Sale of goods	12,543	9,726
Rendering of services	4,792	3,782
	17,335	13,508
Cost of sales
Change in inventories of finished goods	363	(576)
Raw materials and consumables used	(6,255)	(4,359)
Marketing costs	(3,553)	(2,311)
	(9,445)	(7,246)
Gross profit	7,890	6,262

3	SEGMENTAL ANALYSIS

 

Segmental information is presented in respect of the Group's business segments. This primary format is based on the Group's management and internal reporting structure.

 

	Revenue		Segment result (operating profit)
Analysis by market sector	2008	2007	2008	2007
	£'000	£'000	£'000	£'000
Education sector	12,303	8,678	1,292	1,164
Sport sector	5,032	4,830	831	844
Group function	-	-	(835)	(870)
	17,335	13,508	1,288	1,138

		Adjusted profit (note 5)
		2008	2007
		£’000	£’000
Education sector		1,805	1,327
Sport sector		1,014	983
Group function		(826)	(815)
		1,993	1,495

 

The following table provides an analysis of the Groups' revenue by geographical segment.

 

Analysis by geographical segment	2008	2007
	£’000	£’000
United Kingdom	14,644	10,619
Rest of Europe	1,071	773
Rest of the World	1,620	2,116
	17,335	13,508

 

  

4

EMPLOYEES

 

The average monthly number of persons (including directors) employed by the Group during the year, analysed by category, was as follows:

 

	2008	2007
	No	No
Sales and marketing	35	30
Content and production	43	30
Administration and management	53	47
	131	107

Their aggregate remuneration comprised:	2008	2007
	£'000	£'000
Wages and salaries	4,210	3,018
Social security costs	302	353
Pension costs	10	34
Equity-settled share-based payments and related costs	208	50
	4,730	3,455

 

This remuneration is included in other operating expenses except for £194,000 (2007: £116,000) included in cost of sales - marketing expenses.

5	ADJUSTED PROFIT

 

The adjusted profits have been made to allow shareholders to gain a further understanding of the trading performance of the Group. Profits are adjusted for items not perceived by management to be part of the underlying trends in the business and the related tax effect of those items.

 

Adjusted numbers exclude amortisation of intangible assets, exceptional gains and costs (non-trading and of a non-recurring nature), the tax impact of the adjusting items, tax credits from recognition of tax losses and notional accounting charges. The amount for notional accounting charges encompasses the unwinding of discounts on preference shares and provisions and share based payment costs.

 

The adjustment adds back items which have no cash impact or are not trade related and of a non-recurring type. All of the items have no cash impact, except for the non-recurring gain and restructuring costs which are excluded as they are not in the normal course of trading and are not recurring.

 

The restructuring costs in 2008 of £340,000 are all in My Child Limited and relate to the decision in August 2008 to close the My Child call centre and cease publication of its print magazine, moving the business on-line, as well as some transitional expenditure in replacing existing management and operational systems. The restructuring costs therefore include magazine and call centre costs post the cessation decision totalling £136,000. The decision has allowed the Group to close the My Child premises and merge their operations into the Group premises and so an amount of £86,000 has been included representing a provision for all premises costs post cessation through to the lease break clause at the end of May 2009. The operational difficulties inherited resulted in some extra salary positions in the year whilst the cessation decision has resulted in some redundancy costs and the costs of these two situations total £133,000 which is included here. Further contract terminations caused by the cessation and provisions for legal and advisory costs around all of the above result in a cost of £134,000 being included. These costs are shown net of an amount of £149,000 which the vendor agreed to waive from his director's loan account to represent his participation in the on-going funding of My Child through this period of negative cash flow which otherwise was being entirely funded by the Group despite their ownership being 50.1% of the Company.

 

The non-recurring gain made in 2008 relates to sale of an option for a third party to potentially acquire part of the business (the Sports Performance section trading through P2P Publishing Limited). These were all considered to be taxable items for corporation tax and thus attributable tax has been included in the period at 28% of their value. All other adjusting items do not have a tax affect on the Group. The £102,000 costs in 2007 of a fundamental reorganisation were related to a significant change in management responsibilities and a restructure of the businesses into four subsidiaries matching the Group's major business units. The costs associated with this included some redundancy and legal and financial assistance.

  

5	ADJUSTED PROFIT (continued)

		2008	2007
	Note	£'000	£'000
OPERATING PROFIT FOR THE YEAR		1,288	1,138
Amortisation of intangible assets		497	204
Notional accounting charges - share based payment charges		208	50
Costs of a fundamental reorganisation of the business		-	103
Adjusting items to operating profit	a	705	357
Adjusted operating profit for the year		1,993	1,495
(LOSS) / PROFIT BEFORE TAX FOR THE YEAR		(209)	968
Adjusting items to operating profit	a	705	357
Impairment expense	9	870	66
Restructuring costs		340	-
Non-recurring gains	6	(21)	-
Notional accounting charges - unwinding of discounts		105	76
Adjusting items to profit before tax	b	1,999	499
Adjusted profit before tax for the year		1,790	1,467
PROFIT FOR THE YEAR ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT		(367)	742
Adjusting items to profit before tax	b	1,999	499
Attributable tax expense on adjusting items		(89)	(29)
Exclude use of tax losses		276	240
Add back recognition of tax losses		(205)	(90)
Add back minority interest		41	6
Adjusting items to profit for the year		2,022	626
Adjusted profit for the year		1,655	1,368

6	NON OPERATING INCOME AND EXPENSES

	2008	2007
	£'000	£'000
	21	-

 

The Group announced on 2 June 2008 a strategic partnership between Mobilis Healthcare Group Limited and its own 100% owned subsidiary P2P Publishing Limited ("P2P"). This partnership also involved Sussex Research Limited, a related party of both companies, acquiring an option for £50,000 to acquire P2P for £1.4 million in cash. The option lasts for at least thirteen months, after which the Group may give notice of the cancellation of the option. The sale of this option is shown as non-operating income net of related expenses in setting up the option agreement.

7	FINANCE COSTS

	2008	2007
	£'000	£'000
Bank loans and overdrafts	235	56
Finance lease interest	10	5
Unwinding of discount on preference shares and provisions	105	76
	350	137

  

8	INVESTMENT INCOME

	2008	2007
	£'000	£'000
Bank interest receivable	42	33

9	LOSS BEFORE TAXATION

	2008	2007
	£'000	£'000
Loss before taxation is stated after charging/(crediting):
Depreciation and amounts written off property, plant and equipment
- owned assets	98	94
- leased assets	30	33
Amortisation of intangible fixed assets	497	204
Impairment charges	870	66
Operating lease rentals:
- Land and buildings	268	133
Share based payment costs	208	50
(Gain) / loss on foreign exchange	(20)	20

 

An impairment charge to goodwill of £170,000 (2007: £66,000; 2006: £331,000) has been booked in the period under IFRS in relation to the acquisition of DMWSL 370 Limited. The acquired entity contained substantial unrecognised tax losses which on subsequent recognition cause an impairment of the goodwill recognised at the acquisition date.

 

The acquired asset from the November 2007 acquisition of My Child Limited is impaired by £700,000 (2007: £nil) reflecting the restructure of the business in the period as the telesales channel was significantly downsized and the product was moved on-line with the announcement that the acquired publication was to cease.

 

Amounts payable to Baker Tilly UK Audit LLP and their associates in respect of both audit and non-audit services are as follows:

	2008	2007
	£'000	£'000
Fees payable to the company's auditor for the audit of the company's annual accounts	39	37
Fees payable to the company's auditor and its associates for other services:
- the audit of the company's subsidiaries pursuant to legislation	31	22
- other services relating to taxation	25	25
- services relating to corporate finance transactions involving the company or its  subsidiaries	8	25
- other services	30	14
	133	123

 

Fees in respect of other services relates to the additional work required for the transition to accounting under IFRS.

  

10

TAXATION

	2008	2007
	£'000	£'000
Current tax:
UK corporation tax on profits of the period	253	(3)
Adjustment to prior year	(1)	4
Overseas tax suffered	10	-
Total current tax	262	1
Deferred taxation:
Effect of decreased tax rate on opening assets	-	48
Origination and reversal of timing differences	(145)	171
Tax on profit on ordinary activities	117	220

 

UK corporation tax is calculated at 28% (2007: 30%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

 

The total tax charge can be reconciled to the accounting profit as follows:

Factors affecting tax charge for the period	2008		2007
	£'000	%	£'000	%
(Loss) / profit on ordinary activities before tax	(9)		968
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 30% for 4 months and then 28% (2007 - 30%)	(3)	29	290	30
Effect of:
Expenses not deductible for tax purposes (principally amortisation)	62	(689)	16	2
Recognition of tax losses for prior years	(209)	2,322	(90)	(9)
Tax losses not recognised	204	(2,267)	-	-
(Over) / under provision in prior year	(1)	-	4	-
Share based payments	54	(600)	-	-
Overseas taxation	10	(111)	-	-
Tax expense and effective rate for the year	117	(1,300)	220	23

  

11	EARNINGS PER ORDINARY SHARE

 

The calculation of earnings per ordinary share is based on the following:

		2008	2007
		Number	Number
Weighted average number of shares		144,434,481	140,982,634
Adjustment in respect of SIP shares		(1,096,794)	(1,228,046)
Weighted average number of shares used in basic earnings per share calculations		143,337,687	139,754,588
Dilutive effect of share options		3,320,637	7,790,729
Dilutive effect of warrants		7,045,530	8,602,869
Weighted average number of shares used in diluted earnings per share calculations		153,703,854	156,148,186

12	BORROWINGS

	Group
	2008	2007
	£'000	£'000
Non-current
Bank loans	1,601	1,799
Other loan	600	-
	2,201	1,799
Current
Bank overdrafts	55	-
Bank loans	208	180
Other loan	600	500
	863	680

  

12	BORROWINGS (continued)

The effective interest rates are as follows:	Group
	2008	2007
	£'000	£'000
Bank loans (2.25% over LIBOR)	1,500	1,500
Bank loans (2.75% over LIBOR)	309	479
Other loans (2.5% over LIBOR)	1,200	-
Other loans (2.5% over base rate)	-	500
	3,009	2,479

 

At 30 November there were the following committed undrawn borrowing facilities expiring as follows:

	Group
	2008	2007
	£'000	£'000
In one year or less	750	500
In more than one year but not more than two years	-	-
In more than two years	-	-
	750	500

 

The weighted average interest rate implicit in the group's bank loans at 30 November 2008 was 8.05% (2007: 7.87%) and the weighted average period until maturity was 1.8 years (2007: 2.7 years).

 

The directors estimate that the fair value of the Group's borrowings is not significantly different to the carrying value.

 

Other principal features of the Group's borrowings are as follows:

 

The bank loans are guaranteed by material subsidiaries of the Group. The loan of £1,500,000 is repayable on the 7 October 2010 and the loan of £309,000 is repayable in monthly instalments and will be fully repaid by May 2010.

 

Other loans relate to borrowings from Sussex Research Limited, a related party. The weighted average interest rate implicit in other loans at 30 November 2008 was 8.21% (2007: 7.98%) and the weighted average period until maturity was 1.4 years (2007: 0.5 years). The loan is unsecured and repayable in equal instalments of £600,000 on the 30 April 2009 and 2010.

  

13	CAPITAL AND RESERVES

Group	Share capital	Preference share capital	Share premium	Other reserves	Reserve for own shares	Reserve for share based payments	Profit and loss account	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 December 2006	1,382	-	2,978	105	(67)	649	(167)	4,880
Impairment (note 9)	-	-	-	-	-	-	(331)	(331)
	1,382	-	2,978	105	(67)	649	(498)	4,549
Share issues	42	-	61	-	-	-	-	103
Purchase of shares	-	-	-	-	(36)	-	-	(36)
Share based payment costs	-	-	-	-	-	50	-	50
Tax taken directly to equity	-	-	-	-	-	(177)	105	(72)
Profit for the year	-	-	-	-	-	-	742	742
30 November 2007 restated	1,424	-	3,039	105	(103)	522	349	5,336
Share issues	26	875	67	(454)	-	-	-	514
Share based payment costs	-	-	-	-	-	208	-	208
Tax taken directly to equity	-	-	-	-	-	(366)	1	(365)
Profit for the year	-	-	-	-	-	-	(367)	(367)
30 November 2008	1,450	875	3,106	(349)	(103)	364	(17)	5,326

 

Other reserves includes a merger reserve of £105,000 and a reserve relating to the adjustment of the preference share capital issued as part consideration for the acquisition of Special Education Publishing Limited.

 

The Group has purchased nil (2007: 491,218) of its own ordinary 1 pence nominal value shares in 2008 at a cost of £nil (2007: £51,000) to meet its requirements with regard to the Share Incentive Plan scheme, part of which is funded by the employees themselves.

  

14	BUSINESS COMBINATIONS

 

Cash paid net of cash acquired:

 

	Date of acquisition	2008	2007
		£'000	£'000
Current year acquisitions:
Special Education Publishing Limited	29 February 2008	29	-
Prior year acquisitions:
My Child Limited1	23 November 2007	406	580
Speechmark Publishing Limited2	8 October 2007	412	1,568
Smallwood Publishing Limited3	1 May 2007	8	181
Arksports Limited	5 February 2007	-	138
Pre 2007 acquisitions
Additional acquisition costs		-	91
Deferred consideration		-	254
		855	2,812

1 In respect of MyChild Limited deferred cash consideration of £313,000 was paid on 31 May 2008.2 In respect of Speechmark Publishing Limited deferred cash consideration of £154,000 including interest was paid in March 2008 and £250,000 was paid in October 2008.3In respect of Smallwood Publishing Limited deferred cash consideration totalling £8,000 was paid in May and November 2008.

 

 

Special Education Publishing Limited (SEP)

On 29 February 2008 the Group exercised its option to acquire 100% of the issued share capital of SEP for a consideration of 875,000 £1 preference shares convertible at 13.25 pence and £25,875 of related costs. A fair value adjustment of £453,679 has been made to the carrying value of the preference shares as the share price at acquisition date was 6.38 pence. 

SEP Limited	Book value	Fair value adjustment	Fair value
	£'000	£'000	£'000
Intangible assets	657	-	657
Trade and other receivables	224	(93)	131
Trade payables	(714)	45	(669)
Deferred tax recognised on losses	-	11	11
Net assets	167	(37)	130
Goodwill	737	(417)	320
Total consideration	904	(454)	450
Satisfied by:
Consideration - preference shares at fair value	875	(454)	421
Acquisition costs	29	-	29
	904	(454)	450

 

SEP is a specialist education publisher with three established titles. On acquisition SEP had net assets of £167,000, which included intangible assets for the three titles. 

 

The intangibles acquired represent the three titles. These have been valued, in line with the Group's standard method, based on discounting their future projected cash flows over ten years, the same period as which the resultant intangibles will be amortised. This is seen to be a reasonable period through which the titles can be fully expected to run. The goodwill represents the commercial value of the deferred subscription liability acquired and the scale and presence it brings to the Group's education sector, not least in being able to fold older product in to these titles, build an advertising presence and offer sponsorship and exhibition packages in conjunction with the Group's events in the sector.

 

From the date of acquisition to 30 November 2008 the acquisition contributed £356,000 to revenue and £2,000 in profit after taxation.

 

If the acquisition of SEP had been completed on the first day of the accounting period, Group revenues for the period would have been higher by £170,000 and Group profit attributable to equity holders would have been lower by £16,000.

  

14	BUSINESS COMBINATIONS (continued)

 

Other adjustments

My Child Limited	Fair value previously reported	Fair value adjustment	Adjusted fair value
	£'000	£'000	£'000
Intangible assets	1,023	-	1,023
Tangible assets	4	(4)	-
Inventories	57	(57)	-
Trade and other receivables	145	(19)	126
Cash	29	(49)	(20)
Trade payables	(548)	(179)	(727)
Deferred revenue	(1,846)	737	(1,109)
Deferred tax asset	151	-	151
Net assets	(985)	429	(556)
Goodwill	2,107	(606)	1,501
Total consideration	1,122	(177)	945
Satisfied by:
Consideration - cash	537	-	537
Deferred consideration - adjustment to actual subsequently paid	513	(220)	293
Acquisition costs	72	43	115
	1,122	(177)	945

 

The intangible asset added as part of this acquisition has been impaired in the year by £700,000 as the business acquired has been restructured to improve cash flows and concentrate on the perceived value (note 9).

 

The deferred consideration was reduced by £20,000 to reflect the notional interest on this debt which was not interest bearing. It has been reduced by £200,000 to reflect the netting impact of a loan account already held in the acquired company's books which formed part of the consideration due.

 

A number of fair value adjustments have been made in the year. The acquisition was made very late in the previous financial year (23 November 2007) and a number of adjustments have been subsequently made to correct the financial records and write down the assets to their true values. The most notable of these is on the deferred revenue position where a first estimate had been made at the end of last year but subsequently revalued downwards as the database records were cleaned and as the business was restructured which left less revenue being brought into the current financial year.

  

14	BUSINESS COMBINATIONS (continued)

 

Other adjustments (continued)

Speechmark Limited	Fair value previously reported	Fair value adjustment	Adjusted fair value
	£'000	£'000	£'000
Intangible assets	1,636	-	1,636
Tangible assets	8	-	8
Inventories	484	-	484
Trade and other receivables	232	-	232
Cash	(103)	-	(103)
Trade payables	(451)	75	(376)
Corporation tax provision	(37)	-	(37)
Net assets	1,769	75	1,844
Goodwill	350	(101)	249
Total consideration	2,119	(26)	2,093
Satisfied by:
Consideration - cash	1,350	-	1,350
Deferred consideration - adjustment to actual subsequently paid	654	(34)	620
Acquisition costs	115	8	123
	2,119	(26)	2,093

 

In the period a creditor of £75,000 was removed from the acquisition values as it was already provided in the acquired company's balance sheet and the deferred consideration was reduced by £34,000 to provide for notional interest as it was interest free.

15	ANALYSIS OF CHANGES IN NET DEBT

Group		At 1 December 2007	Cash flow	Other  non-cash changes	At 30 November 2008
		£'000	£'000	£'000	£'000
Cash at bank and in hand		1,116	(776)	55	395
Overdraft		-	-	(55)	(55)
Net cash		1,116	(776)	-	340
Bank loans due within one year		(180)	170	(198)	(208)
Other loans due within one year		(500)	(100)	-	(600)
Finance leases due within one year		(38)	40	(21)	(19)
Debt due within one year		(718)	110	(219)	(827)
Bank loans due after one year		(1,799)	-	198	(1,601)
Other loans due after one year		-	(600)	-	(600)
Finance leases due after one year		(28)	-	21	(7)
Debt due after one year		(1,827)	(600)	219	(2,208)
Net debt		(1,429)	(1,266)	-	(2,695)

 

Non cash items are reclassifications from due after one year to due within one year and the recognition of overdraft positions where the right of set-off does not apply.

 

 

16	EXPLANATION OF TRANSITION TO IFRS

 

This is the first year the company has presented its financial statements under IFRS. The last financial statements under UK GAAP were for the year ended 30 November 2007 and the date of transition was therefore 1 December 2006.

 

The transition adjustments were as follows: 

 

(i) Promotional expense was deferred to match it with the revenue generated. For example mailings on an event would not be expensed until the month of the event so that they matched with the event result. Under IFRS all promotional costs are expensed in the month they are incurred. The deferred promotion on the balance sheet at each period end under former accounting policies is written off to the income statement.

 

(ii) Under IFRS vacation days due for each employee are accrued for at the period end. No such accrual was made under former UK GAAP.

 

(iii) Computer software that is distinguishable from hardware and capital in nature is accounted for as an intangible asset and thus amortised. It was reflected under former UK GAAP as a tangible asset and depreciated.

 

(iv) Under UK GAAP the excess of amounts paid to acquire businesses or subsidiaries over the net assets acquired was capitalised as goodwill and amortised over its effective life (1 to 10 years). Under IFRS the acquisitions are reviewed for what intangible assets are actually taken on with the remainder taken to goodwill. The intangibles are amortised dependent on their individual expected useful lives whilst the goodwill is not amortised but is subject to impairment testing, as are the intangible assets. This difference in treatment results in the reversal of the UK GAAP amortisation which is replaced by an entirely new amortisation charge based on the intangible assets recognised which are reviewed at least annually for impairment.

 

An impairment charge of £170,000 (2007: £66,000; 2006: £331,000) has been made to reflect the recognition of a deferred tax asset on pre-acquisition losses made by the DMWSL 370 Limited group acquired in December 2005 which is booked against the goodwill from acquisition.

 

(v) The costs of a fundamental reorganisation which were previously shown as an exceptional cost and thus excluded from operating profit is now included in operating profit under IFRS, although it is still added back for the adjusted profits.

 

(vi) As explained in note (iv) under IFRS intangible assets are recognised in relation to the acquisitions made, as opposed to the goodwill capitalised under former UK GAAP. Under IFRS deferred tax is recognised on the temporary timing difference.

 

(vii) Share based payments are charged to the income statement over the period from grant to vesting dates. Under IFRS a deferred tax asset is recognised on options that were granted on or before 7 November 2002 options.

 

(viii) The transition adjustments to not defer promotional expenditure (i) and to accrue holiday pay (ii) are both taxable items and thus have an impact on the tax charge for the period.

 

(ix) Under IFRS the liabilities of the SIP are consolidated under SIC 12 and so do not form part of the company's balance sheet.

Changes to the cash flow statement

 

Under UK GAAP the loan from Sussex Research Limited was classified within other creditors and therefore the cash flow movement was shown as an operating activity. Under IFRS this has been classified within borrowings and so the movement is included as a financing activity.

  

16	EXPLANATION OF TRANSITION TO IFRS (continued)

 

Reconciliation of profit for the year ending 30 November 2007:

Group	Nature of adjustment	UK GAAP balances in IFRS format	IFRS 3 Business combinations	IFRS adjustments	IFRS
		£'000	£'000	£'000	£'000
Revenue		13,508	-	-	13,508
Cost of Sales		(4,935)	-	-	(4,935)
Marketing expense	i	(2,406)	-	95	(2,311)
GROSS PROFIT		6,167	-	95	6,262
Other operating expenses	ii	(4,797)	-	4	(4,793)
Depreciation expense	iii	(142)	-	15	(127)
Amortisation and impairment expense	iv	(938)	(190)	924	(204)
Total administrative expenses		(5,877)	(190)	943	(5,124)
OPERATING PROFIT / (LOSS)		290	(190)	1,038	1,138
Impairment expense	iv	-	-	(66)	(66)
Non-operating income and expense		-	-	-	-
Finance costs		(137)	-	-	(137)
Investment income		33	-	-	33
PROFIT / (LOSS) BEFORE TAX		186	(190)	972	968
Taxation	vi, vii, viii	(151)	53	(122)	(220)
PROFIT / (LOSS) FOR THE FINANCIAL YEAR		35	(137)	850	748
Attributable to:
- Equity holders of the parent		29	(137)	850	742
- Minority interest		6	-	-	6
		35	(137)	850	748
EARNINGS PER SHARE
Basic		0.02p	(0.10)p	0.61p	0.53p
Diluted		0.02p	(0.08)p	0.54p	0.48p

  

16	EXPLANATION OF TRANSITION TO IFRS (continued)

 

Reconciliation of Consolidated Balance Sheet as at 1 December 2006:

Group		Nature of adjustment	UK GAAP balances in IFRS format	Fair value adjustments	IFRS adjustments	IFRS
			£'000		£'000	£'000
ASSETS
Non-current assets
Goodwill	iv		6,123	246	(331)	6,038
Other intangible assets			-	-	-	-
Property and equipment			315	-	-	315
Investments			90	(90)	-	-
Deferred tax assets	vi, vii, viii		729	-	740	1,469
			7,257	156	409	7,822
CURRENT ASSETS
Inventories			284	(10)	-	274
Trade and other receivables	i		2,467	-	(410)	2,057
Cash and cash equivalents			1,475	-	-	1,475
			4,226	(10)	(410)	3,806
TOTAL ASSETS			11,483	146	(1)	11,628
EQUITY AND LIABILITIES
Capital and Reserves
Called up ordinary share capital			(1,382)	-	-	(1,382)
Preference share capital			-	-	-	-
Share premium account			(2,978)	-	-	(2,978)
Merger reserve			(105)	-	-	(105)
Reserve for own shares			67	-	-	67
Reserve for Share Based Payments	vii		(54)	-	(595)	(649)
Retained earnings	i, ii, iv, vi, vii, viii		(156)	-	654	498
Equity attributable to equity holders of the parent			(4,608)		59	(4,549)
Minority Interest			(27)	-	-	(27)
TOTAL EQUITY			(4,635)	-	59	(4,576)
Non-current liabilities
Long term borrowings			(500)	-	-	(500)
Deferred tax liabilities	vi		-	-	(24)	(24)
Obligations under finance leases			(70)	-	-	(70)
Preference shares			(919)	-	-	(919)
			(1,489)	-	(24)	(1,513)
Current liabilities
Short term borrowings			(150)	-	-	(150)
Current tax liabilities			(150)	-	-	(150)
Trade payables and other liabilities	ii		(1,610)	(146)	(34)	(1,790)
Obligations under finance leases			(38)	-	-	(38)
Deferred income			(3,080)	-	-	(3,080)
Provisions for liabilities and charges			(331)	-	-	(331)
			(5,359)	(146)	(34)	(5,539)
TOTAL LIABILITIES			(6,848)	(146)	(58)	(7,052)
TOTAL EQUITY AND LIABILITIES			(11,483)	(146)	1	(11,628)

  

16	EXPLANATION OF TRANSITION TO IFRS (continued)

 

Reconciliation of Consolidated Balance Sheet as at 30 November 2007:

 

Group	Nature of adjustment	UK GAAP balances in IFRS format	Fair value adjustments	IFRS 3 Business combinations	IFRS adjustments	IFRS
		£'000		£'000	£'000	£'000
ASSETS
Non-current assets
Goodwill	iv	10,869	(709)	745	(2,440)	8,465
Other intangible assets	iii, iv	-	-	(99)	3,087	2,988
Property and equipment	iii	418	(4)	-	(103)	311
Investments		-	-	-	-	-
Deferred tax assets	vi, vii, viii	731	-	-	530	1,261
		12,018	(713)	646	1,074	13,025
CURRENT ASSETS
Inventories		860	(57)	-	-	803
Trade and other receivables	i	3,466	(20)	-	(315)	3,131
Cash and cash equivalents		1,116	-	-	-	1,116
		5,442	(77)		(315)	5,050
TOTAL ASSETS		17,460	(790)	646	759	18,075
EQUITY AND LIABILITIES
Capital and Reserves
Called up ordinary share capital		(1,424)	-	-	-	(1,424)
Preference share capital		-	-	-	-	-
Share premium account		(3,039)	-	-	-	(3,039)
Merger reserve		(105)	-	-	-	(105)
Reserve for own shares		103	-	-	-	103
Reserve for Share Based Payments	vii	(104)	-	-	(418)	(522)
Retained earnings	i, vi, vii, viii	(184)	-	135	(300)	(349)
Equity attributable to equity holders of the parent		(4,753)	-	135	(718)	(5,336)
Minority Interest		(28)	-	-	-	(28)
TOTAL EQUITY		(4,781)	-	135	(718)	(5,364)
Non-current liabilities
Long term borrowings		(1,799)	-	-	-	(1,799)
Deferred tax liabilities	vi, vii	-	-	(781)	(16)	(797)
Obligations under finance leases		(28)	-	-	-	(28)
Preference shares		(878)	-	-	-	(878)
		(2,705)	-	(781)	(16)	(3,502)
Current liabilities
Short term borrowings		(680)	-	-	-	(680)
Current tax liabilities		(183)	-	-	6	(177)
Trade payables and other liabilities	ii	(2,756)	(201)	-	(31)	(2,988)
Obligations under finance leases		(38)	-	-	-	(38)
Deferred income		(5,055)	737	-	-	(4,318)
Provisions for liabilities and charges		(1,262)	254	-	-	(1,008)
		(9,974)	790	-	(25)	(9,209)
TOTAL LIABILITIES		(12,679)	790	(781)	(41)	(12,711)
TOTAL EQUITY AND LIABILITIES		(17,460)	790	(646)	(759)	(18,075)

ENDFR TFMBTMMMBTJL

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ELE.L