11th Mar 2008 07:01
Chime Communications PLC11 March 2008 CHIME COMMUNICATIONS PLC AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2007 Chime Communications PLC, the leading marketing services group, today announces its preliminary results for the year ended 31 December 2007. Highlights • Operating income up 24% to £96.5 million (2006: £77.9 million) - Organic growth of 11% • Operating profit up 29% to £15.7 million (2006: £12.2 million) - Organic growth of 13% • Margin improved to 16.3% (2006: 15.7%) • Profit before tax up 25% to £13.8 million (2006: £11.0 million) • Earnings per share from continuing operations up 11% to 3.43p (2006: 3.08p) • Increased dividend following adoption of more progressive policy. Final dividend of 0.48p per share. Total for 2007 of 0.70p per share (2006: 0.58p), an increase of 21%. • Continue to be cash positive with strong cash generation Lord Bell, Chairman of Chime Communications, said : "Another terrific year, double digit growth across the board and no sign of any slowdown in the first quarter of 2008 nor for that matter the rest of the year". For further information please contact: Lord Bell, Chairman 020 7861 8515Chime Communications Christopher Satterthwaite, Chief Executive 020 7861 8515Chime Communications Mike Davies/Chris Hamilton 020 7861 3232Bell Pottinger Corporate & Financial SUMMARY OF RESULTS 2007 2006 % £m £m Change Actual Operating Income 96.5 77.9 +24% Operating Profit 15.7 12.2 +29% Operating Profit Margin 16.3% 15.7% Organic (1) Operating Income 86.6 77.9 +11% Operating Profit 13.8 12.2 +13% (1) Excluding acquisitions in 2006 and 2007 REVIEW OF OPERATIONS All three divisions achieved their budget and saw improvement in their key performance indicators. Public relations continues to be our largest division being 53% of operating income (2006 - 60%), Advertising and Marketing Services was 39% (2006 - 34%) andResearch 8% (2006 - 6%). Public Relations - Bell Pottinger Group including Good Relations, Harvard and Insight +-------------------------+-----------+-----------+--------------+ | | 2007 | 2006 | % | | | | | | | | £m | £m | Change | +-------------------------+-----------+-----------+--------------+ | | | | | +-------------------------+-----------+-----------+--------------+ |Operating Income | 51.1| 46.9| +9%| +-------------------------+-----------+-----------+--------------+ |Operating Profit | 9.0| 8.2| +9%| +-------------------------+-----------+-----------+--------------+ |Operating Profit Margin | 17.6%| 17.5%| | +-------------------------+-----------+-----------+--------------+ Advertising and Marketing Services - VCCP Group, Fast Track, Teamspirit and TTA +-------------------------+-----------+-----------+--------------+ | | 2007 | 2006 | % | | | | | | | | £m | £m | Change | +-------------------------+-----------+-----------+--------------+ | | | | | +-------------------------+-----------+-----------+--------------+ |Operating Income | 37.7| 26.3| +43%| +-------------------------+-----------+-----------+--------------+ |Operating Profit | 5.9| 3.5| +68%| +-------------------------+-----------+-----------+--------------+ |Operating Profit Margin | 15.7%| 13.4%| | +-------------------------+-----------+-----------+--------------+ Research - The Research Group 2007 2006 % £m £m Change Operating Income 7.7 4.7 +64% Operating Profit 1.4 1.0 +37% Operating Profit Margin 18.1% 21.7% The Group acted for 1,379 clients in 2007 compared to 1,145 in 2006. 236 of these clients used more than one of our businesses (201 in 2006) which represented 62% of total operating income (2006 - 53%). 164 clients paid us over £100,000 in 2007, compared to 139 in 2006. Our top 30 clients represented 45% of total operating income (2006 - 45%). Our two largest clients represented 15.6% of our operating income, 8.3% and 7.3%respectively. Both clients are high margin, long term, have normal renewal termsand have been retained since 2003. No other client represented more than 5% of our operating income. Average fee income per client in 2007 was £70,000 compared to £68,000 in 2006. Average income per employee was £105,000 in 2007 compared to £104,000 in 2006. Bell Pottinger retained its position as No. 1 in the "PR Week" League Table and Fast Track was No. 1 in the "Marketing" Sponsorship League Table. HIGH PROFILE ACTIVITIES • The next America's Cup challenge acting for Alinghi, the holders. • The world's largest ever civil aviation aircraft order for Emirates. • The $1.9 billion acquisition of US-headquartered aircraft maintenancebusinesses for Dubai Aerospace Enterprise. • McLaren's F1 dispute with Ferrari. • Representing Mark Warner Holidays during the Madeleine McCann crisis. • Reviewing Camelot's community relations strategy. • Launch of HSBC's title sponsorship of the 2009 British Lions tour of SouthAfrica. • Supporting the winning Glasgow 2014 Commonwealth Games bid team. • Launch of the Playstation 3. • The highly successful launch of The 02, London's newest and most spectacularentertainment venue. • The Prince of Wales' May Day Business Summit on Climate Change with Business in the Community, bringing together over 1,000 chief executives and senior directors across England. • BSkyB's The Bigger Picture, their responsible business campaign and initiative. • Imperial Tobacco's contested £11 billion offer for Altadis of Spain. New business wins of £40 million in 2007 which included: Adobe Legal & GeneralAegon Asset Management Levi StraussAOL Thaksin ShinawatraBarclays The Government's account for Alcohol Awareness and EducationBloomsbury Publishing (including anti binge drinking) Blue ArrowCisco The Rocco Forte CollectionDepartment for Children, Schools Timberlandand Families TiscaliDP World IPO TrafiguraFriends Provident International UnileverJohn Lewis CASH FLOW, BANKING ARRANGEMENTS AND DEFERRED CONSIDERATIONS Net cash at 31st December 2007 was £0.8 million compared to £2.9 million at 31stDecember 2006. The Group generated cash from trading activities in 2007 of £21.4 millionrepresenting a cash conversion on profits of 155%. The Group continues to operate well within its banking covenants and has aborrowing facility of £25 million which reduces to £21 million in February 2009and reduces further to £17 million in August 2009. The facility continuesuntil February 2010. As a result of their rapid growth, VCCP have achieved their full earn-out in2007. This will result in a payment of £15.5 million in late March/early April.Under the terms of the agreement this is payable 50% in Chime shares and 50% incash, but Chime has the option to pay a greater proportion or all in cash. Giventhe current level of the share price and in order to minimise dilution toshareholders, the Board is considering paying a greater proportion in cash. Future deferred considerations (other than VCCP above) are a maximum of £33.1million, comprising £16.6 million payable in cash and £16.5 million payable in shares or cash at Chime's option. The timing of the aggregate of these payments is £1.6 million in 2008, £0.5 million in 2009, with the balance paid between 2010 and 2013. TAXATION The effective tax charge for 2007 was 32% compared to 28.5% last year. Thenotional finance costs of deferred considerations are not subject to taxrelief and if these are excluded the effective tax rate is 29.5%. DIVIDENDS We are increasing the dividend. The Group has for many years operated a 5times dividend cover policy but it is believed that the Group is now in aposition to be able to improve the dividend return to shareholders and willadopt a more progressive policy. The 2007 dividend is based on 4.5 timescover and subject to market conditions, we are anticipating 2008 and beyondbeing based on 4 times cover. The Board is therefore proposing to pay a final dividend of 0.48p per share(2006 - 0.40p), giving a total dividend per share of 0.70p compared to 0.58p in2006, this is an increase of 21%. The final dividend will be payable on 20thJune 2008 to shareholders on the register at 30th May 2008. The expectedex-dividend date is 28th May 2008. CORPORATE AND SOCIAL RESPONSIBILITY The Group became carbon neutral on 1st January 2007 and reduced its carbonemissions by 37% in 2007. The Group is targeting a further reduction of 5% in2008. In June 2007 the Group published its second Corporate Responsibility Report,the major focus of which was the Group's response to growing concerns aboutclimate change. In October 2007 Chime Communications was listed on the FTSE4Good index aftermeeting their globally recognised corporate responsibility standards. ACQUISITIONS We made four acquisitions in 2007, all of which have been successfullyintegrated into the Group: Facts International - 75% of this fieldwork research business was acquiredin February 2007. The remaining 25% is held by the new Chairman of FactsInternational, Nick Lamb. Fast Track - The acquisition of the UK's leading sports marketing agency wascompleted at the end of April 2007. The initial consideration was £15 millionpayable £10 million in cash and £5 million in Chime shares. Deferredconsideration is payable on the average profits for the three years ended 31stDecember 2009 and the three years ended 31st December 2012. The maximum totalconsideration (initial and deferred) is £43 million. The transaction (initialand deferred) is based on a multiple of 7 times the average pretax profits. The Corporate Citizenship Company - Chime has acquired this leading corporate responsibility business and merged it with its existing business, Smart, with the aim of becoming the first port of call for clients who want a full range of services across the corporate responsibility practice both in the UK and globally. Stuart Higgins Communications - The acquisition in December 2007 of thispublic relations and communications consultancy run by Stuart Higgins, former editor of The Sun newspaper. This company has a strong presence in the sports sector and has been integrated into Chime's existing business, Fast Track. BOARD CHANGES On 1st July 2007, Rodger Hughes (formerly Managing Partner of PricewaterhouseCoopers UK) was appointed to the Board as a Non-Executive Director and on 1st October 2007 he took over the role of Senior Independent Director from Julian Seymour. Julian retired from the Board on 31st December 2007. The Board expresses its gratitude to Julian for his massive contribution since the company started. DIGITAL We now offer a full suite of digital services including on line reputationmanagement, digital strategy, search relations, pay per click, websitedesign, web mapping and digital media buying. 12% of our operating income in 2007 came from digital activities compared to 9%in 2006. In 2006 and 2007 we invested in a new digital search business (pay per clickand natural search) - VCCP Search. This business is now profitable and alreadywell established in the top twenty search businesses in the UK. In 2008 we have committed to start a digital research business which weexpect to achieve at least break even in its first year. Recent Digital wins include : Capital One School Foods TrustCheapflights.com The Government's account for Alcohol Awareness and EducationFortnum & MasonSAB Miller INTERNATIONAL OPERATIONS All three divisions of Chime offer a comprehensive international service.This is delivered through wholly or partly owned agencies, a variety ofalliances and purpose built networks. We work with more than 200 agencies acrossthe world. We have Chime branded agencies in: Middle East - Abu Dhabi - Doha - Dubai USA - Washington - New York - Boston Germany - Hamburg - Munich - Berlin South East Asia - Singapore Spain - Madrid South Africa - Johannesburg Recent international wins include: Democratic Republic of - Mining contract reviewCongoLatvia - Political campaignGeorgia - Presidential campaignNigeria - Presidential campaignSaudi Arabia - UK EmbassyQatar - Qatar Foundation - Qatar Investment Authority - Doha DebatesBahrain - Consultancy to HRH Crown Prince of BahrainAbu Dhabi - The Executive Council - MubadalaDubai - Dubai AerospaceUSA - US Government Contracts RenewedGermany - 02Middle East - Islamic Common Word CampaignSri Lanka - International Media Relations Programme Our international strategy is client and business opportunity led. Geography isnot a key criterion as the internet and ease of travel have made location oflittle importance. Our prime interest is not domestic work in other countries but multinationalwork in a global economy. We have been very successful in winning contracts forgovernments, corporations and institutions that want global reach, notdependent on geographical presence but more on strategic skills and qualityimplementation internationally. THE MARKETPLACE Our market sector is dominated by multi discipline agency groups like WPP,Omnicom and IPG. The key driver is synergy, the whole being stronger thanthe sum of the parts and the fame of individual brands being a key factor inclients' choices of supplier. If there is a downturn in the marcoms sector, andthere is as yet no sign of one, then reflecting the client's requirements isessential. Our market is increasingly diverse and fragmented and so is ourrange of services. No one would be immune to a downturn but we are wellpositioned to remain strong. "Diversified communications" continue to grow globally at the expense of"advertising expenditure" with diversified communications accountingfor 54% of total European marcoms spend in 2007 (Source: Group M). Income fromovertaken traditional media and advertising revenue contribution in allthe leading global marcoms groups. Chime's strategy since 2005 has been to create a modern communications group tomeet the demands of clients operating in such a rapidly diversifyingcommunications marketplace. We are building leadership positions in sectorsof diversified communications which are growing at above average rates, eg.public affairs, sports marketing and digital communications. We are bringingnew solutions to the marketplace anticipating client needs, etc. indeliberative research and search relations. Most of all, in a fragmented and more complex marcoms environment we are concentrating on the single focus of'reputation' so that the Group works together on our clients' business makingsure the whole does equal more than the sum of the parts. Our view is that the marketplace will continue to fragment and diversify.Chime will succeed by providing a range of services to meet these clientrequirements. Our belief is that reputation management will have equal weight with brand management. OUTLOOK There appears to be little connection between the turbulence in the financialmarkets and the real economy. The markets, as evidenced by the current lowrating of our business and some of our competitors, are predicting an economicdownturn. We are experiencing no sign of that and we list below 10 reasons why we are optimistic: 1. We are continuing to invest in new product development, eg. online research. 2. 196 wins across the Group in January/February 2008 versus 165 in 2007. 3. The sectoral change public relations is enjoying in the marketplace and its above average growth potential. 4. The accelerating performance of Fast Track, far and away the UK's largest sports marketing company. Already this year we have won the 2010 Commonwealth Games TV rights and the America's Cup, acting for the defender - Alinghi. 5. Bell Pottinger Public Affairs is the No. 1 public affairs business in the UK.In a more regulated business environment there is an increasing need for businesses to talk to government. We are expanding our public affairs practise into Brussels and Washington. 6. Our international work is expanding at a fast rate particularly in the MiddleEast which is unaffected by the Stock Market gloom. 7. Our start up VCCP Search is already in the top twenty UK search businesses. 8. We won the communications account for the London Organising Committee of theOlympic Games and Paralympic Games against all the major agencies. 9. We are the agency of choice for crisis communications, reputational damage limitation and government and institutional global campaigns. Already we have won consultancy work for the governments of the US, UK, Saudi Arabia, Bahrain, Abu Dhabi and Qatar. 10.We have successfully borne down on fixed costs and increased the proportion of personnel costs that is variable and performance related from 13% to 15% in 2007. 2007 was another terrific year and there is no sign of any slowdown in the firstquarter of 2008 nor for that matter the rest of the year. Lord BellChairman11th March 2008 Consolidated Income Statement Year ended 31 December 2007 2007 2006 £'000 £'000 Note CONTINUING OPERATIONS Revenue 206,589 164,143 Cost of sales (110,080) (86,222) OPERATING INCOME 96,509 77,921 Operating expenses (80,605) (65,686) Amortisation of intangible (159) - OPERATING PROFIT 15,745 12,235 Share of results of associates (73) (280) Investment income 214 93 Finance costs (938) (402) Finance cost of deferred consideration (1,186) (612) PROFIT BEFORE TAX 13,762 11,034 Tax (4,409) (3,147) PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS 9,353 7,887 DISCONTINUED OPERATIONS (Loss)/profit for the year from discontinued operations (61) 20 Loss for the year from sale of associate (140) - PROFIT FOR THE YEAR 9,152 7,907 Attributable to: Equity holders of the parent 8,617 7,647 Minority interest 535 260 9,152 7,907 EARNINGS PER SHARE 3 From continuing operations Basic 3.43p 3.08p Diluted 3.32p 3.02p From continuing and discontinued operations Basic 3.35p 3.08p Diluted 3.24p 3.03p Consolidated Statement of Recognised Income and Expense Year ended 31 December 2007 2007 2006 £'000 £'000 Gain on revaluation of available for sale investments (23) - Exchange differences on translation of foreign subsidiaries 391 (106) Net expense recognised directly in equity 368 (106) Profit for the year 9,152 7,907 Total recognised income and expense for the year 9,520 7,801 Attributable to: Equity holders of the parent 8,985 7,541 Minority interest 535 260 Total recognised income and expense relating to the year 9,520 7,801 Consolidated Balance Sheet as at 31 December 2007 2007 2006 £'000 £'000 Non-current assets Goodwill 109,909 74,730 Other intangible assets 762 10 Property, plant and equipment 4,425 2,972 Investments in associates 488 582 Other investments 350 - Due from deferred consideration 568 950 Available for sale investments 227 - Deferred tax asset 1,191 1,747 117,920 80,991 Current assets Work in progress 1,560 686 Trade and other receivables 42,641 30,813 Cash and cash equivalents 10,196 6,652 54,397 38,151 Total assets 172,317 119,142 Current liabilities Trade and other payables (58,574) (37,996) Current tax liabilities (2,548) (2,475) Obligations under finance leases (49) (109) Short-term provisions (16,335) (2,133) (77,506) (42,713) Net current liabilities (23,109) (4,562) Non-current liabilities Bank loans (8,375) (2,928) Long-term provisions (12,406) (13,167) Obligations under finance leases (53) (49) (20,834) (16,144) Total liabilities (98,340) (58,857) Net assets 73,977 60,285 Equity Share capital 13,319 12,684 Share premium account 32,217 26,594 Own shares (4,381) (5,968) Equity reserve 32,385 32,385 Translation reserve 146 (245) Accumulated losses (612) (5,592) Equity attributable to equity holders of the parent 73,074 59,858 Equity minority interest 903 427 Total equity 73,977 60,285 Consolidated Cash Flow Statement Year ended 31 December 2007 2007 2006 £'000 £'000 Note Net cash from operating Activities 5 15,200 7,694 Investing activities Interest received 152 93 Dividend received from investment 63 - Proceeds on disposal of property, plant and equipment 60 69 Purchases of property, plant and equipment (1,784) (1,703) Purchases of other intangible assets (66) - Disposal of investment in associate - 2,862 Loans (granted to)/repaid by associates (178) 13 Acquisition of subsidiaries (11,536) (359) Disposal of subsidiary - (74) Net cash (outflow)/inflow from returns on investment and servicing of finance (13,289) 901 Financing activities Dividend paid (1,624) (1,243) Dividends paid to minorities (113) (92) Increase in/(repayments of) 5,447 (5,557) borrowing Repayment of loan notes (1,333) (878) Repayments of obligations under finance leases (112) (156) Proceeds on issue of ordinary 328 - share capital Buy back of warrants - (800) Purchases of own shares (960) (214) Net cash from/(used in) financing Activities 1,633 (8,940) Net increase/(decrease) in cash and cash Equivalents 3,544 (345) Cash and cash equivalents at beginning of year 6,652 6,997 Cash and cash equivalents at end of year 10,196 6,652 Cash and cash equivalents comprise cash at bank, loan note deposits less overdrafts and Taking into account the following borrowings net cash was: Bank loans (8,375) (2,928) Finance leases (102) (158) Loan notes outstanding (907) (642) Overall net cash 812 2,924 Notes: 1.Business Segments For management purposes, the group is organised into three operating divisions- Public Relations, Advertising and Marketing Services and Research. Thesedivisions are the basis on which the group reports its primary segmentinformation. Principal activities are as follows: Public Relations The Public Relations division comprises some of the leading names in theindustry, including Bell Pottinger, Good Relations, Harvard, Insight, Resonate,De Facto and Corporate Citizenship. It is the ranked number 1 PR Group in theUK in the PR Week public relations consultancy league table for 2006. Itserves more than 600 major UK and international brands, as well asgovernments, government departments, pharmaceutical and healthcare companies,charities, not-for-profit organisations, professional service firms, consumerbrands and famous people Advertising and Marketing Services ('AMS') The AMS division includes the VCCP Group, Fast Track, Teamspirit and TTA.It possesses specialist skills in advertising and marketing services -direct marketing, digital communication, sponsorship exploitation, point of sale,sales promotion and specialist media planning and buying. It also specialises in the niche markets of sport, property and financial services. Research The Research division is made up of Opinion Leader Research, Ledbury Research and Facts International. Opinion Leader Research is one of the UK's leading research consultancies and Ledbury Research provides research and advice to brands who market and sell to high net worth consumers. The group's operations are located in the United Kingdom, Germany, Spain, theMiddle East and USA. 1. Business segments (continued) Operating Income Operating Profit 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Class of business Public Relations: Continuing operations 50,316 46,952 8,856 8,233 Acquisitions 813 - 124 - 51,129 46,952 8,980 8,233 Advertising and Marketing Services: Continuing operations 30,236 26,264 4,257 3,519 Acquisitions 7,433 - 1,658 - 37,669 26,264 5,915 3,519 Research: Continuing operations 6,069 4,705 1,270 1,021 Acquisitions 1,642 - 125 - 7,711 4,705 1,395 1,021 96,509 77,921 16,290 12,773 Chime Central Costs - - (545) (538) 96,509 77,921 15,745 12,235 Operating Margin 2007 2006 % % Class of business Public Relations: Continuing operations 17.6% 17.5% Acquisitions 15.3% 17.6% 17.5% Advertising and Marketing Services: Continuing operations 14.1% 13.4% Acquisitions 22.3% 15.7% 13.4% Research: Continuing operations 20.9% 21.7% Acquisitions 7.6% 18.1% 21.7% 16.9% 16.4% Chime Central Costs Other operating income 16.3% 15.7% 2. Basis of preparation The financial information set out in the announcement does not constitute thegroup's statutory accounts for the years ended 31 December 2007 or 2006 but isderived from those accounts. The financial information for the year ended31 December 2006 is derived from the statutory accounts for that year whichhave been delivered to the Registrar of Companies The auditors have reported onthe accounts to 31 December 2007 and 31 December 2006; their reports wereunqualified and did not contain a statement under s.237 (2) or (3)Companies Act 1985. Copies of the full accounts for 2007 will be circulated toshareholders and after approval at the Annual General Meeting will be deliveredto the Registrar of Companies. Whilst the financial information included inthis preliminary announcement has been computed in accordance withInternational Financial Reporting Standards (IFRSs) this announcement doesnot in itself contain sufficient information to comply with IFRSs. TheCompany expect to publish full financial statements that comply with IFRSs inMarch 2008. The information in this preliminary announcement was approved by the boardon 10th March 2008. The consolidated income statement, balance sheet, statement of recognisedincome and expense and cash flow statement have been prepared on a basisconsistent with the financial statements for the year ended 31 December 2006. The prior year comparatives have been restated to reflect the discontinuedoperations of Rare Corporate Design. The effect of this change is as follows:Reduction in operating income £895,000; Reduction in operating profit £29,000. 3. Earnings per share From continuing and discontinued operations The calculation of the basic and diluted earnings per share is based on thefollowing data: 2007 2006 £'000 £'000 Earnings Earnings for the purpose of basic earnings per share being net profit attributable to the equity holders of the parent 8,617 7,647 Number of shares Weighted average number of ordinary shares forthe purposes of basic earnings per share 257,024,547 247,920,453 Effect of dilutive potential ordinary shares: Share options and deferred shares 8,600,383 4,390,908 Weighted average number of ordinary shares for the purposes of diluted earnings per share 265,624,930 252,311,361 From continuing operations 2007 2006 £'000 £'000 Earnings Net profit attributable to equity holders of the parent 8,617 7,647 Adjustments to exclude loss/(profit) for the year from discontinued operations 61 (20) Adjustment to exclude loss for the year from the sale of associate 140 - Earnings from continuing operations for the purposes of basic earnings per share excluding discontinued operations 8,818 7,627 The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. From discontinued operations 2007 2006 Basic - - Diluted - 0.01p The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. 4. Dividends 2007 2006 £'000 £'000 Amounts recognised as distributions to equity holders in the year (approved): Interim dividend for the year ended 31 December 2007 of 0.22p (2006: 0.18p) per share 581 450 Final dividend for the year ended 31 December 1,043 793 2006 of 0.40p (2005:0.32p) per share 581 450 1,624 1,243 Amounts not recognised as distributions to equity holders in the year (declared): Proposed final dividend for the year ended 31 1,262 1,001 December 2007 of 0.48p (2006 - 0.40p) per share 1,262 1,001 The proposed final dividend is subject to shareholder approval at the AnnualGeneral Meeting and has not been included as a liability as at 31 December 2007.The dividend will be paid on 20 June 2008 to those shareholders on the register at 30 June 2008. The expected ex-dividend date is 28 May 2008. Under an arrangement dated 3 April 1996, The Chime Communications Employee Trustwhich holds 5,510,667 ordinary shares representing 2.07% of the company'scalled-up share capital, has agreed to waive dividends on 3,477,007, thedifference being those shares held under the deferred share scheme. 5. Notes to the consolidated cash flow statement 2007 2006 £'000 £'000 Operating profit Adjustments for: 15,745 12,235 (Loss)/profit from discontinued operation (86) 29 Share based payment expense 968 371 Translation differences 119 (76) Depreciation of property, plant and equipment 1,403 1,026 Amortisation of other intangible assets 19 130 Amortisation of acquired intangibles 159 - Gain/(loss) on disposal of property, plant and Equipment 29 (1) Increase/(decrease) in provisions 281 (328) Operating cash flows before movements in working capital 18,637 13,386 Increase in work in progress (840) (121) Increase in receivables (8,027) (6,499) Increase in payables 10,169 3,692 Cash generated by operations 19,939 10,458 Income taxes paid (3,869) (2,306) Interest paid (870) (458) Net cash from operating activities 15,200 7,694 6. Reconciliation of equity attributable to equity holders of parent 2007 2006 £'000 £'000 Balance at 1 January 59,858 53,471 Dividends paid (1,624) (1,243) Buy back of warrants - (800) Deferred tax benefit in respect of share based payments - - Credit in relation to share based payments 557 947 Purchase of own shares (1,160) (541) Own shares disposed of on exercise of options 200 334 Net profit for the year attributable to equity 8,985 7,541 holders of the parent Increase in share capital 6,258 149 Balance at 31 December 73,074 59,858 7. Events after balance sheet date As a result of their rapid growth, VCCP have achieved their full earn-out in2007. This will result in a payment of £15.5 million in late March/early April2008. Under the terms of the agreement this is payable 50% in Chime shares and50% in cash, but Chime has the option to pay a greater proportion or all in cash.Given the current level of the share price and in order to minimise dilutionto shareholders, the Board is considering paying a greater proportion in cash. From 1 April 2008 the Corporation tax rate changes from 30% to 28%. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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