14th Oct 2008 07:00
Next Fifteen Communications Group plc Preliminary Results for the year ended 31 July 2008 (Unaudited) Next Fifteen Communications Group plc ("Next Fifteen" or "the Group"), theinternational public relations consultancy group, today announces recordpreliminary results for the year to 31 July 2008. Financial highlights: -- Adjusted profit before tax up 18% to £6.58 million (2007: £5.58 million) (see note 3) -- Revenues up 6.5% to £63.1 million (2007: £59.3 million) -- Adjusted pre-tax profit margins improved to 10.4% from 9.4% in the comparative period -- Adjusted earnings per share up 21.6% to 8.62p (2007: 7.09p) (see note 7) -- Final dividend of 1.25p (2007: 1.1p), making a total dividend for the year of 1.7p (2007: 1.5p), up 13.3% -- Net cash of £3.4m, following strong cash generation of £3.5m in the year Corporate progress: -- Strong overall performance by the Group's technology and non-technology orientated consulting businesses; growth of existing client revenue and significant new client wins including AMD, Sony, Sybase and Facebook -- Organic revenue growth (at constant currencies) in US up 8.8%, in EMEA up 8.5%, in India up 18.5% -- Ownership of Lexis Public Relations was increased to 87.15% in April 2008, further strengthening the Group's presence beyond the technology sector. Remaining equity to be purchased in the current financial year -- Bite Sweden strengthened by acquisition of the business of Stockholm-based AIM PR in September 2008 Commenting on the results, Chairman of Next Fifteen, Will Whitehorn, said: "The Group has managed its fundamentals well in the last year, showing solidgrowth and improved profits margins. Unlike most others in the marketingservices sector it was also cash positive having ended the year with £3.4m onits balance sheet. Given the current climate, the Group will continue to take aconservative approach to running the business and focus heavily on the three Csof customers, cost base and cash. As things stand the Group is stillexperiencing good trading conditions but it seems prudent to manage the businessin a way that reflects the general uncertainty that surrounds the currenteconomy." For further information contact: \* TNext Fifteen Communications GroupTim Dyson, Chief Executive 001 415 350 2801David Dewhurst, Finance Director 07974 161183 InfernoLiam Jacklin+44(0)20 8735 [email protected] Elijah Lawal+44(0)20 8735 [email protected]\* T \* TAttached:Chairman and Chief Executive StatementConsolidated Income StatementConsolidated Statement of Recognised Income and ExpenseConsolidated Balance SheetConsolidated Statement of Cash FlowNotes to the Preliminary Statement\* T Next Fifteen Communications Group plc Preliminary Results for the year ended 31 July 2008 (Unaudited) Chairman and Chief Executive's statement Next Fifteen Communications Group plc ('Next Fifteen' or 'the Group'), theglobal public relations consultancy group, is pleased to announce itspreliminary results for the year to 31 July 2008. The Group has continued toperform well and has again produced record results, with revenue increasing 6.5%to £63.1m (2007: £59.3m). Reporting for the first full-year under IFRS, profitbefore tax was up 7.7% at £5.52m (2007: £5.12m) but the adjusted profit beforetax increased 18% to £6.58m (2007: £5.58m) (see note 3). Adjusted earnings pershare have increased 21.6% to 8.62p (2007: 7.09p) (see note 7), while basicearnings per share have increased 11.8% to 7.08p (2007: 6.33p). The Group hassignificantly improved its cash position, with net cash of £3.4m at year-end upfrom a small net debt of £0.1m at last year-end. The Group's results were affected by currency movements during the year,particularly the strengthening of the Euro, somewhat offset by further weaknessof the US dollar. Using exchange rates prevailing for the year ended 31 July2007, the Group would have shown revenue of £62.6m, an increase of 5.6%. On theback of these strong results the Board has proposed a final dividend of 1.25pper share, bringing the total dividend for the year to 1.7p, which represents anincrease of 13.3% (2007: 1.5p). Margin improvement The Group saw its adjusted profit margin improve from 9.4% to 10.4% during theyear despite continued investments made in new operations. Before head officecosts (see note 2), the businesses improved their overall adjusted profit marginfrom 13.2% to 15.9%. The biggest improvement came from our US businesses whocollectively achieved a margin of over 20%. Strengthened client base During the last twelve months the Group added significant brands to its clientroster including: Sybase, MTV, Sony and Facebook. In addition, the Group hasexpanded its relationships with Yahoo!, Nokia and AMD. Given the retainer natureof many of the contracts the Group holds with its clients, the Group has goodvisibility on revenues from its current client base. The Group has experienced agrowing trend of clients prioritizing their PR spend towards new media. It isexpected that clients will continue to do this and that our businesses are wellpositioned to serve their needs. Growth strategy The Group has continued to explore organic growth opportunities and selectiveacquisitions of specialist agencies that will either extend the internationalreach of our existing businesses or provide new markets or market-share for theGroup. With strong cash generation and net cash on the company's balance sheet,the Group is well placed to make targeted acquisitions of a size that would notlead to a significantly geared balance sheet; an approach that the Board feelsis prudent given the current economic climate. Prospects The Group has managed its fundamentals well in the last year, showing solidgrowth and improved profits margins. Unlike most others in the marketingservices sector it was also cash positive having ended the year with £3.4m onits balance sheet. Given the current climate, the Group will continue to take aconservative approach to running the business and focus heavily on the three Csof customers, cost base and cash. As things stand the Group is stillexperiencing good trading conditions but it seems prudent to manage the businessin a way that reflects the general uncertainty that surrounds the currenteconomy. In the first two months of the current financial year, the Group hasmaintained its momentum and the Board remains optimistic about the prospects forthe year. IFRS impact These results for the full-year are the first reported under adoptedInternational Financial Reporting Standards (IFRS). Under IAS 39 Financial Instruments: Recognition and Measurement we are requiredto report the value of the financial instruments we use to protect the Groupfrom rising interest rates and weaker currencies, at fair market value. Thiseffectively means that we are obliged to record in the Income Statement all themovement in the market value of these longer-term protection measures which haveoccurred during the year. In 2007, we took out five-year interest rateprotection on the dollar denominated loan used to finance the acquisition ofOutCast. We also have an ongoing programme of currency protection to mitigatethe impact on reported sterling results of any weakening of the US Dollar andthe Euro. The impact of reporting the value of financial instruments at theirfair value was minimal in the comparative period. However, in the year-ended 31July 2008 we experienced a dramatic reduction in US borrowing costs in responseto the credit crisis, as well as a similarly dramatic strengthening of the Euroover the same period, which resulted in a £754k reduction in the fair value ofthe financial protection instruments we hold. There is no immediate cash impactof this movement in fair value but the negative fair value will unwind as theunderlying contracts are realised and settled in cash. A consequence of movingto IAS 39 is that the Company's reported pre-tax profits will reflect themovements in the fair value of the Group's financial protection measures betweenbalance sheet dates and will be more difficult to predict. For this reason wehave decided to adjust for this item in the underlying measure of profits andearnings that we present, to give a better understanding of the performance ofthe Group (see note 3). The other key impacts of the adoption of IFRS are explained in note 10 to thisPreliminary Announcement. NEXT FIFTEEN COMMUNICATIONS GROUP PLC CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 JULY 2008 \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) Note £'000 £'000 £'000 £'000 Billings 73,916 69,422 =========================================================================================== Revenue 2 63,107 59,268 Staff costs 42,455 39,963Depreciation 1,203 1,421Amortisation 113 44Reorganisation costs - 295Other operating charges 12,630 11,852 ---------- ---------- Total operating charges (56,401) (53,575) ------------- -------------- Operating profit 6,706 5,693 ------------- -------------- Finance expense (1,481) (769)Finance income 174 142 ------------- --------------Net finance expense 6 (1,307) (627) ------------- -------------- Share of profit of equity accounted associates 117 56 ------------- --------------Profit before income tax 2,3 5,516 5,122 Income tax expense 4 (1,655) (1,781) ------------- -------------- Profit for the period 3,861 3,341 ============= ============== Attributable to:Equity holders of the parent 3,663 3,100Minority interest 198 241 ------------- -------------- 3,861 3,341 ============= ============== Earnings per share 7Basic (pence) 7.08 6.33Diluted (pence) 6.99 6.23\* T NEXT FIFTEEN COMMUNICATIONS GROUP PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE YEAR ENDED 31 JULY 2008 \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) £'000 £'000 Foreign currency translation differences for foreign operations 15 (206) Translation differences on long-term foreign currency inter-company loans 28 (124) -------------- ----------- Income and expense recognised directly in equity 43 (330) Profit for the period 3,861 3,341 -------------- ----------- Total recognised income and expense for the period 3,904 3,011 -------------- ----------- Attributable to: Equity holders of the Company 3,706 2,770 Minority interest 198 241 -------------- ----------- Total recognised income and expense for the period 3,904 3,011 -------------- -----------\* T NEXT FIFTEEN COMMUNICATIONS GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2008 \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) Note £'000 £'000 £'000 £'000Assets Property, plant and equipment 2,435 2,162Intangible assets 15,462 13,507Investments in equity accounted associates 190 124Deferred tax asset 1,468 2,252Other receivables 651 397 -------- --------Total non-current assets 20,206 18,442 Trade and other receivables 15,720 14,991Cash and cash equivalents 9,525 5,834Corporation tax asset 701 -Derivative financial assets - 69 -------- --------Total current assets 25,946 20,894 -------- --------- Total assets 2 46,152 39,336 -------- --------- Liabilities Loans and borrowings 5,315 5,170Deferred tax liabilities 32 95Other payables 385 20Deferred consideration 139 1,662Share purchase obligation 10(e) - 1,737 -------- --------Total non-current liabilities (5,871) (8,684) Loans and borrowings - 320Trade and other payables 14,914 13,229Corporation tax liability 677 29Deferred consideration 2,630 766Derivative financial liabilities 685 -Share purchase obligation 10(e) 1,737 1,326 -------- --------Total current liabilities (20,643) (15,670) -------- --------- Total liabilities (26,514) (24,354) -------- --------- TOTAL NET ASSETS 19,638 14,982 ======== ========= EquityShare capital 1,354 1,334Share premium reserve 5,157 5,157Merger reserve 2,659 2,160Share purchase reserve 10(e) (1,380) (2,890)Foreign currency translation reserve (191) (206)Investment in own shares (663) (681)Treasury shares (504) -Retained earnings 12,960 9,910 -------- --------- Total equity attributable to equity holders of the Company 9 19,392 14,784Minority interests 246 198 -------- --------- TOTAL EQUITY 19,638 14,982 ======== =========\* T NEXT FIFTEEN COMMUNICATIONS GROUP PLC CONSOLIDATED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 JULY 2008 \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) £'000 £'000 £'000 £'000 Cash flows from operating activities Profit for the period 3,861 3,341Adjustments for:Depreciation 1,203 1,421Amortisation 113 44Finance income (174) (142)Finance expense 1,481 769Share of profit from equity accounted associates (117) (56)Loss on sale of property, plant and equipment 2 151Income tax expense 1,655 1,781Share based payments 237 262 --------- ----------- Net cash inflow from operating activities before changes in working capital 8,261 7,571 Change in trade and other receivables (1,417) (2,294)Change in trade and other payables 2,755 1,926 --------- ----------- 1,338 (368) ------------- ----------- Net cash generated from operations 9,599 7,203 Income taxes paid (1,090) (1,992) ------------- ----------- Net cash from operating activities 8,509 5,211 Cash flows from investing activities Acquisition of subsidiary, net of cash acquired (829) (1,959)Acquisition of property, plant and equipment (1,591) (643)Acquisition of intangible assets (329) (525)Payments for long-term cash deposits (233) (78)Interest received 174 113 --------- ----------- Net cash outflow from investing activities (2,808) (3,092) ------------- ----------- Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) £'000 £'000 £'000 £'000 Cash flows from financing activities Proceeds from sale of own shares 64 953Acquisition of own shares (504) -Proceeds from bank borrowings - 539Repayment of bank borrowings (337) -Capital element of finance lease rental repayment (217) (299)Interest paid (414) (424)Dividends paid to holders of the parent (807) (691) --------- ----------- Net cash (outflow)/inflow from financing activities (2,215) 78 ------------- -----------Net increase in cash and cash equivalents 3,486 2,197Cash and cash equivalents at beginning of the period 5,834 3,791Exchange gains/(losses) on cash held 205 (154) ------------- -----------Cash and cash equivalents at end of period 9,525 5,834 ------------- -----------\* T NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 1) ACCOUNTING POLICIES The principal accounting policies applied in the preparation of the consolidatedfinancial statements are set out below. These policies have been consistentlyapplied to all the periods presented, unless otherwise stated. A. Basis of Preparation The financial information in this announcement does not constitute the Group'sstatutory accounts for the years ended 31 July 2008 or 31 July 2007. Thefinancial information for the year ended 31 July 2007 is derived from thestatutory accounts for that year, which were prepared under UK GAAP, which havebeen delivered to the Registrar of Companies. The auditors reported on thoseaccounts; their report was unqualified, did not include references to anymatters to which the auditors drew attention by way of emphasis withoutqualifying their reports and did not contain statements under the Companies Act1985, Section 237(2) or (3). The statutory accounts for the year ended 31 July2008, prepared in accordance with IFRSs as adopted by the EU, will be finalisedon the basis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the Group's annual general meeting. The AIM rules require that the annual consolidated financial statements of theGroup for the year ending 31 July 2008 be prepared in accordance withInternational Financial Reporting Standards as adopted by the European Union('adopted IFRS'). The Group's consolidated financial statements were prepared in accordance withUnited Kingdom Generally Accepted Accounting Principles (UK GAAP) until 31 July2007. UK GAAP differs in some areas from adopted IFRS. In preparing the 2008consolidated financial statements, management has amended certain accountingmethods applied under UK GAAP financial statements to comply with adopted IFRS. B. Transitional provisions of IFRS accounting policies An explanation of how the transition to adopted IFRS has affected the reportedfinancial position, financial performance and cash flows of the Group isprovided in note 10. The Group's date of transition to adopted IFRS is 1 August2006. IFRS 1 First-time Adoption of International Financial Reporting Standards setsout the procedures that the Group has followed as the basis for preparing its2008 consolidated financial statements under IFRS. The Group was required toestablish its IFRS accounting policies as at 31 July 2008 and, in general, applythese retrospectively to determine the IFRS balance sheet at the date oftransition. The standard provides a number of optional exemptions to this general principal.The most significant of these are set out below, together with the descriptionin each case of the exemptions adopted by the Group. i) Business combinations that occurred before the transition date (IFRS 3Business Combinations) The Group has elected not to apply IFRS 3 retrospectively to businesscombinations that took place before the date of transition. As a result, in thetransition balance sheet, goodwill arising on past business combinations remainsas stated under UK GAAP as at 31 July 2006. In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates,goodwill arising on the acquisition of foreign subsidiaries is treated as amonetary asset and restated using exchange rates prevailing at each balancesheet date. This treatment is the same as that applied under UK GAAP with theexception that under adopted IFRS, all translation differences be transferred toa separate foreign currency translation reserve within equity. In the 2008Interim Report, the Group had taken advantage of the exemption allowed by IAS 1Presentation of Financial Statements (Exemption iii), and treated the goodwillon foreign subsidiaries acquired prior to 1 August 2006 as a sterling item,using exchange rates applied at that date. The Group has elected to no longerapply this exemption, and this change in accounting treatment has required arestatement of the comparative goodwill and foreign currency translation reservereported at 31 January 2008 within the Interim Accounts. ii) Fair value or revaluation at deemed cost (IAS 16 Property and Equipment) The option to restate items of property, plant and equipment to their fair valueat the transition date has not been taken by the Group. For all items, the Grouphas elected to take their carrying value as shown previously under UK GAAP astheir deemed cost. iii) Foreign currency translation reserve (IAS 21 The Effects of Changes inForeign Exchange) For accounting periods beginning on or after the transition date, IFRS requiresamounts taken to reserves on the translation of foreign subsidiaries, associatesand branches to be recorded in a separate foreign currency translation reserveand to be included in the future calculation of profit or loss on disposal ofthe subsidiary, associate or branch. The foreign currency translation reservewas set at zero at the transition date. C. Basis of consolidation The Group's financial information consolidates the financial information of NextFifteen Communications Group plc and all of its subsidiary undertakings usingthe acquisition method of accounting. In the consolidated balance sheet, the acquiree's identifiable assets,liabilities and contingent liabilities are initially recognised at their fairvalues at the acquisition date. The results of acquired operations are includedin the consolidated income statement from the date on which control is obtained.Business combinations that took place prior to the transition date have not beenrestated. Inter-company transactions, balances and unrealised gains on transactionsbetween Group companies (Next Fifteen Communications Group plc and itssubsidiaries) are eliminated. Unrealised losses are also eliminated unless thetransaction provides evidence of an impairment of the asset transferred.Accounting policies for subsidiaries have been changed where necessary to ensureconsistency with the policies adopted by the Group. D. Merger reserve Where the conditions set out in Section 131 of the Companies Act 1985 are met,shares issued as part of the consideration in a business combination arerecorded at their fair value in the consolidated balance sheet, and thedifference between the nominal value and fair value of the shares issued isrecognised in the merger reserve. E. Associates Where the Group has the power to exercise significant influence over (but notcontrol) the financial and operating policy decisions of another entity, it isclassified as an associate. Associates are initially recognised in theconsolidated balance sheet at cost. The Group's share of post-acquisitionprofits and losses is recognised in the consolidated income statement, exceptthat losses in excess of the Group's investment in the associate are notrecognised unless there is an obligation to make good those losses. Profits and losses arising on transactions between the Group and its associatesare recognised only to the extent of unrelated investors' interests in theassociate. The investor's share in the associate's unrealised profits and lossesresulting from these transactions is eliminated against the carrying value ofthe associate. Any premium paid for an associate above the fair value of the Group's share ofthe identifiable assets, liabilities and contingent liabilities acquired iscapitalised and included in the carrying amount of the associate and subject toimpairment in the same way as goodwill arising on acquisitions described below. F. Revenue Billings represents amounts receivable from clients, exclusive of sales taxes,in respect of charges for fees, commission and rechargeable expenses incurred onbehalf of clients. Revenue is billings less amounts payable on behalf of clients to externalsuppliers where they are retained to perform part of a specific client projector service, and represents fees, commissions and mark-ups on rechargeableexpenses. Revenue is recognised on the following basis: -- Retainer and other non-retainer fees are recognised as the services are performed. -- Project fees are recognised on a percentage completion basis. -- Expenses are recharged to clients at cost plus an agreed mark-up when the services are performed. G. Intangible assets Goodwill Goodwill represents the excess of the cost of a business combination over theinterest in the fair value of identifiable assets, liabilities and contingentliabilities acquired. Cost comprises the fair values of assets given,liabilities assumed and equity instruments issued, plus any direct costs ofacquisition. Goodwill is capitalised as an intangible asset with any impairmentin carrying value being charged to the consolidated income statement. Computer Software Licenses for software that are not integral to the functioning of a computer arecapitalised as intangible assets. Costs that are directly associated with theproduction of identifiable and unique software products controlled by theCompany, and that are expected to generate economic benefits exceeding costsbeyond one year, are recognised as intangible assets. Direct costs includesoftware development employee costs. Included within software are assets in the course of construction which comprisepayments on account in respect of software licenses and consultancy feesrelating to the construction of a new IT system which is not yet operational inthe business. Only the incremental costs which are directly attributable to theasset in the course of construction are capitalised. Amortisation is provided on software at rates calculated to write off the cost,less estimated residual value, of each asset evenly over its expected usefullife. No amortisation is charged on assets in the course of construction until theyare available for operational use in the business. Capitalised computer softwarethat is not an asset in the course of construction is amortised over its usefuleconomic life of 5 years. Costs associated with maintaining computer softwareprogrammes are recognised as an expense as incurred. H. Property, plant and equipment Property, plant and equipment is stated at cost, net of depreciation.Depreciation is provided on all property, plant and equipment at annual ratescalculated to write off the cost, less estimated residual value, of each assetevenly over its expected useful life as follows: \* TLeasehold premises - Over the term of the lease, or until the first break clause .Office equipment - 20%-50% per annum straight line.Office furniture - 20% per annum straight line.Motor vehicles - 25% per annum straight line.\* T I. Impairment Impairment tests on goodwill are undertaken annually at the financial year end.Other non-financial assets (including investments in associates but excludingdeferred tax) are subject to impairment tests whenever events or changes incircumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which ismeasured as the higher of value in use and fair value less costs to sell, theasset is impaired accordingly. Where it is not possible to estimate the recoverable amount of an individualasset, the impairment test is carried out on the asset's cash-generating unitdefined as the lowest group of assets in which the asset belongs for which thereare separately identifiable cash flows. Goodwill is allocated on initialrecognition to each of the group's cash-generating units that are expected tobenefit from the synergies of the combination giving rise to the goodwill. Impairment charges are included in the other operating charges line item in theconsolidated income statement, except to the extent they reverse gainspreviously recognised in the consolidated statement of recognised income andexpense. An impairment loss recognised for goodwill is not reversed. J. Foreign currency Transactions entered into by group entities in a currency other than thecurrency of the primary economic environment in which they operate (their"functional currency") are recorded at the exchange rates ruling when thetransactions occur. Foreign currency monetary assets and liabilities aretranslated at the exchange rates ruling at the balance sheet date. Exchangedifferences arising on the retranslation of unsettled monetary assets andliabilities are recognised immediately in the consolidated income statement. On consolidation, the results of overseas operations are translated intosterling at the average exchange rates for the accounting period. All assets andliabilities of overseas operations, including goodwill arising on theacquisition of those operations, are translated at the exchange rates ruling atthe balance sheet date. Exchange differences arising on translating the openingnet assets at opening rates and the results of overseas operations at actualrates are recognised directly in the foreign currency translation reserve withinequity. On disposal of a foreign operation, the cumulative translation differencesrecognised in the foreign currency translation reserve relating to thatoperation up to the date of disposal are transferred to the consolidated incomestatement as part of the profit or loss on disposal. In accordance with IFRS 1First-time Adoption of International Financial Reporting Standards, cumulativetranslation differences at the date of transition to IFRS are deemed to be zero(see note B iii) within this accounting policies section) and the gain or losson a subsequent disposal of those foreign operations would exclude thedifferences that arose before the date of transition. K. Segment reporting A business segment is a distinguishable component of the group that is engagedin providing an individual product or service or a group of related products orservices and that is subject to risks and returns that are different from thoseof other business segments. A geographical segment is a distinguishablecomponent of the group that is engaged in providing products or services withina particular economic environment and that is subject to risks and returns thatare different from those of components operating in other economic environments. \* TPrimary segment: The Group has one business segment being the provision of public relations services. A second business segment, being research, is not large enough to require segmental disclose.Secondary segments: The Group operates in four geographical segments being the UK, Europe, the Middle East and Africa, North America and Asia Pacific.\* T L. Financial instruments Financial assets and liabilities are recognised on the Group's balance sheetwhen the Group becomes party to the contractual provisions of the asset orliability. The Group's accounting policies for different types of financialasset and liability are described below. Trade receivables Trade receivables are initially recognised at fair value and will subsequentlybe measured at amortised cost less allowances for impairment. An allowance forimpairment of trade receivables is established when there is objective evidencethat the Company will not be able to collect all amounts due according to theoriginal terms of receivables. The amount of the allowance is the differencebetween the asset's carrying amount and the present value of estimated futurecash flows and is recognised as an expense in the consolidated income statement. Cash and cash equivalents Cash and cash equivalents comprise cash in hand and short-term call depositsheld with banks. Bank overdrafts are shown within loans and borrowings incurrent liabilities on the consolidated balance sheet. Derivative financial instruments Derivative instruments utilised by the Group are cap and collar interest rateand foreign exchange contracts. Derivative financial instruments are initiallyrecognised at fair value at the contract date and continue to be stated at fairvalue at the balance sheet date with gains and losses on revaluation beingrecognised immediately in the consolidated income statement. Bank borrowings Interest-bearing bank loans and overdrafts are recognised at their fair valuenet of direct issue costs and, thereafter, at amortised cost. Finance costs arecharged to the consolidated income statement over the term of the debt so thatthe amount charged is at a constant rate on the carrying amount. Finance costsinclude issue costs which are initially recognised as a reduction in theproceeds of the associated capital instrument and unwound over the term of thedebt. Share purchase obligation Liabilities in respect of put option agreements that allow the Group's equitypartners to require the Group to purchase the minority interest are treated asderivatives over equity instruments and are recorded in the balance sheet atfair value. The fair value of such put options is re-measured at each periodend. The movement in fair value is recognised in the income statement. The Grouprecognises its best estimate of the amount it is likely to pay, should theseoptions be exercised by the minority interests, as a liability in the balancesheet. When the initial fair value of the liability in respect of the put optionis created the corresponding debit is included in the share purchase reserve. Trade payables Trade payables are initially recognised at fair value and, thereafter, atamortised cost. M. Retirement benefits Pension costs, which relate to payments made by the Company to employees' owndefined contribution pension plans are charged to the profit and loss account asincurred. N. Share-based payments The Group issues equity-settled share-based payments to certain employees. Theshare-based payments are measured at fair value at the date of the grant andexpensed on a straight line basis over the vesting period. The cumulativeexpense is adjusted for failure to achieve non-market vesting conditions. Inaccordance with the transitional provisions, IFRS 2 has been applied to allgrants of equity instruments after 7 November 2002 that were unvested as at 1August 2006. There are equity instruments granted prior to 7 November 2002 whichremain outstanding at 31 July 2008 for which no expense has been recognised. Fair value is measured by use of a Black Scholes model on the grounds that thereare no market related vesting conditions. The expected life used in the modelhas been adjusted, based on management's best estimate, for the effects ofnon-transferability, exercise restrictions and behavioural considerations. O. Leased assets Where substantially all of the risks and rewards incidental to ownership of aleased asset have been transferred to the Group (a "finance lease"), the assetis treated as if it had been purchased outright. The amount initially recognisedas an asset is the lower of the fair value of the leased asset and the presentvalue of the minimum lease payments payable over the term of the lease. Thecorresponding lease commitment is shown as a liability. Lease payments areanalysed between capital and interest. The interest element is charged to theconsolidated income statement over the period of the lease and is calculated sothat it represents a constant proportion of the lease liability. The capitalelement reduces the balance owed to the lessor. Where substantially all of the risks and rewards incidental to ownership are nottransferred to the group (an "operating lease"), the total rentals payable underthe lease are charged to the consolidated income statement on a straight-linebasis over the lease term. The aggregate benefit of lease incentives isrecognised as a reduction to the rental expense over the lease term on astraight-line basis. The land and buildings elements of property leases are considered separately forthe purposes of lease classification. P. Deferred taxation Deferred tax assets and liabilities are recognised where the carrying amount ofan asset or liability in the balance sheet differs from its tax base, except fordifferences arising on: • the initial recognition of goodwill; • the initial recognition of an asset or liability in a transaction which is nota business combination and at the time of the transaction affects neitheraccounting or taxable profit; and • investments in subsidiaries and jointly controlled entities where the group isable to control the timing of the reversal of the difference and it is probablethat the difference will not reverse in the foreseeable future. Recognition of deferred tax assets is restricted to those instances where it isprobable that taxable profit will be available against which the asset can beutilised. The amount of the asset or liability is determined using tax rates that havebeen enacted or substantively enacted by the balance sheet date and are expectedto apply when the deferred tax liabilities/(assets) are settled/(recovered). Deferred tax assets and liabilities are offset when the group has a legallyenforceable right to offset current tax assets and liabilities and the deferredtax assets and liabilities relate to taxes levied by the same tax authority oneither: • the same taxable group company; or • different group entities which intend either to settle current tax assets andliabilities on a net basis, or to realise the assets and settle the liabilitiessimultaneously, in each future period in which significant amounts of deferredtax assets or liabilities are expected to be settled or recovered. Q. Dividends Equity dividends are recognised when they become legally payable. Interim equitydividends are recognised when paid. Final equity dividends are recognised whenapproved by the shareholders at an annual general meeting. R. Employee Share Ownership Plan (ESOP) As the Group is deemed to have control of its ESOP trust, it is treated as asubsidiary and consolidated for the purposes of the Group accounts. The ESOP'sassets (other than investments in the company's shares), liabilities, income andexpenses are included on a line-by-line basis in the Group financial statements.The ESOP's investment in the Company's shares is deducted from equity in theconsolidated balance sheet as if they were treasury shares and presented in theinvestment in own shares reserve. S. Treasury shares When the Group re-acquires its own equity instruments, those instruments(treasury shares) are deducted from equity. No gain or loss is recognised in theconsolidated income statement on the purchase, sale, issue or cancellation ofthe Group's treasury shares. Such treasury shares may be acquired and held byother members of the Group. Consideration paid or received is recogniseddirectly in equity. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 2) SEGMENT INFORMATION Primary reporting format - business segments The Group operates in one business segment, being the provision of publicrelations services. A second business segment, being research, is not largeenough to require segmental disclosure. Secondary reporting format - geographical segments The Group's operations are based in four main geographical areas. The UK is thehome country of the Parent Company. \* T Profit Adjusted before profit Total Capital Revenue income before assets expenditure tax income tax(£) £'000 £'000 £'000 £'000 £'000 Year ended 31 July 2008(Unaudited) UK 18,787 2,336 2,520 13,096 775EMEA(£) 10,074 1,164 1,164 4,085 52North America 27,522 5,576 5,704 16,186 559Asia Pacific 6,724 667 667 4,262 366Head Office - (4,227) (3,473) 8,523 349 -------------------------------------------------------- 63,107 5,516 6,582 46,152 2,101 ======================================================== Year ended 31 July 2007(Unaudited) UK 18,443 2,349 2,493 9,048 280EMEA(£) 8,567 609 609 3,128 69North America 25,922 3,966 4,136 15,722 236Asia Pacific 6,336 611 611 3,409 487Head Office - (2,413) (2,269) 8,029 538 -------------------------------------------------------- 59,268 5,122 5,580 39,336 1,610 ========================================================\* T (£) EMEA means Europe (excluding the UK), Middle East and Africa. (£) Adjusted profit before income tax has been reached by adjusting profitbefore income tax for movements in fair value of financial instruments and theunwinding of the discount on deferred consideration and share purchaseobligation. See note 3 Reconciliation of pro-forma financial measures. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 3) RECONCILIATION OF PRO-FORMA FINANCIAL MEASURES \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) £'000 £'000 Profit before income tax 5,516 5,122Movement in fair value of financial instruments(£) 754 (29)Reorganisation costs - 295Unwinding of discount on deferred consideration(£) 128 170Unwinding of discount on share purchase obligation(£) 184 173Profit on sale of division - (151) ------------------- ------------------- Adjusted profit before income tax 6,582 5,580 =================== ===================\* T Adjusted profit before income tax has been presented to provide additionalinformation which may be useful to the reader. (£) See note 6 (2) As required by IAS39 Financial Instruments, an interest charge of £128,000has been recognised during the period in relation to the deferred considerationpayable for OutCast Communications. (£) As required by IAS39 Financial Instruments: Recognition and Measurement, aninterest charge of £184,000 has been recognised during the period in relation tothe unwinding of the discount on the share purchase obligation for Lexis PublicRelations Limited. 4) INCOME TAX EXPENSE The tax charge is based on the effective tax rate of 30% for the year. 5) DIVIDEND A final dividend of 1.25p per share (2007: 1.1p) has been proposed. This has notbeen accrued in accordance with IAS10 Events after the Balance Sheet Date. Theinterim dividend was 0.45p per share (2007: 0.40p), making a total for the yearof 1.70p per share (2007: 1.50p). The final dividend, if approved at the AGM on27 January 2009, will be paid on 6 February 2009 to all shareholders on theRegister of Members on 9 January 2009. The ex-dividend date for the shares is 7January 2009. 6) FINANCE EXPENSE The net finance expense of £1,307,000 (2007: £627,000), includes a charge of£754,000 (2007: gain of £29,000) on financial instruments reflecting themovement in the fair value since 31 July 2007. These financial instrumentscomprise of financial products used for hedging interest rate risk on long termdebt and currency exposure on USD and EUR. Also included within finance expense is a charge of £312,000 for the period(2007: £343,000) relating to the unwinding of the discount on the deferredconsideration of OutCast Communications and share purchase obligation of LexisPublic Relations Limited. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 7) EARNINGS PER SHARE \* T Year ended Year ended 31 July 2008 31 July 2007 (Unaudited) (Unaudited) £'000 £'000Earnings attributable to ordinary shareholders 3,663 3,100Reorganisation costs after taxation - 207Unwinding of discount on deferred consideration after tax 80 112Unwinding of discount on share purchase obligation 184 173Profit on sale of division after taxation - (106)Movement in fair value of financial instruments after tax 532 (14) --------------------- ---------------------Adjusted earnings attributable to ordinary shareholders 4,459 3,472 ===================== ===================== Number Number Weighted average number of ordinary shares 51,737,491 48,954,264Dilutive shares 652,320 819,624 --------------------- ---------------------Diluted weighted average number of ordinary shares 52,389,811 49,773,888 --------------------- --------------------- Basic earnings per share 7.08p 6.33pDiluted earnings per share 6.99p 6.23pAdjusted earnings per share 8.62p 7.09pDiluted adjusted earnings per share 8.51p 6.98p\* T The adjusted earnings per share is the performance measure used for the vestingof employee share options and performance shares. 8) ACQUISITIONS 1. On 31 October 2007, the Company paid £977,000 ($2,030,000) relating to thedeferred consideration for the purchase of OutCast Communications Limited("OutCast"). £791,000 ($1,644,000) of the £977,000 was settled in cash and theremainder in shares. OutCast is a wholly owned subsidiary acquired in June 2005. 2. On 31 October 2007, the Company acquired a further 0.6% stake in the UKpublic relations company Lexis Public Relations Limited ("Lexis") by thepurchase of a 0.6% stake in Panther Communications Group Limited ("Panther"),the parent company of Lexis. The stake was acquired for a total consideration of£51,000 of which £38,000 was satisfied in cash and the remainder in shares,taking the Company's total stake to 76.6%. 3. On 31 March 2008, the Company acquired a further 10.55% stake in Lexis by thepurchase of a 10.55% stake in Panther, the parent company of Lexis. An initialpayment in shares of £314,000 was made on the transaction date with theremainder to be satisfied in cash during the year ended 31 July 2009. This takesthe Company's total stake to 87.15%. The Company is contracted to acquire the whole of Panther and Panther's existingmanagement has agreed to sell further stakes in the company over the next 12months. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 9) RECONCILIATION OF MOVEMENT IN RESERVES \* T Called Share Merger Share Foreign ESOP Treasury Retained Equity up premium reserve purchase currency reserve shares earnings attributable share account reserve translation to capital reserve shareholders of the Company £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 August 2007 1,334 5,157 2,160 (2,890) (206) (681) - 9,910 14,784-------------Profit attributable to shareholders - - - - - - - 3,663 3,663-------------Dividends - - - - - - - (807) (807)-------------Shares issued on acquisitions 20 - 499 - - - - - 519-------------Movement in share purchase obligation - - - 1,510 - - - - 1,510-------------Credit in relation to share- based payments - - - - - - - 237 237-------------Deferred tax on share -based payments - - - - - - - (117) (117)-------------Translation differences on foreign currency net investments - - - - 15 - - - 15-------------Movement due to ESOP share option exercises - - - - - 18 - 46 64-------------Purchase of own shares - - - - - - (504) - (504)-------------Translation differences on long-term inter- company loans - - - - - - - 28 28 ---------------------------------------------------------------------------------------------At 31 July 2008 1,354 5,157 2,659 (1,380) (191) (663) (504) 12,960 19,392 =============================================================================================\* T NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 JULY 2008 10) TRANSITION TO ADOPTED IFRS As stated in note 1, the financial information has been prepared on the basis ofthe recognition and measurement requirements of adopted IFRS. The accounting policies set out in note 1 have been applied (subject to IFRS 1exemptions taken) in preparing the financial statements for the year ended 31July 2008, the comparative information presented for the year ended 31 July 2007and the preparation of the opening IFRS balance sheet at 1 August 2006 (theGroup's transition date). The changes in accounting policies as a consequence ofthe transition to adopted IFRS and the reconciliations of the effects of thetransition to adopted IFRS on the Group's financial statements are presentedbelow. Only the presentation of the cashflow statement has changed as a resultof the adoption of IFRS. The transition to adopted IFRS resulted in the following changes in accountingpolicies: a) Goodwill The change to adopted IFRS means that goodwill is no longer amortised but istested for impairment annually or when external factors indicate that it may beimpaired. The carrying value of goodwill was tested for impairment at the date oftransition and as at 31 July 2007 and 31 July 2008. No impairment was required,therefore the amortisation charge for the year ended 31 July 2007 of £826,000has been fully reversed under IFRS and the carrying value of goodwill as at thetransition date remains the same as under UK GAAP in accordance with IFRS 1First-time Adoption of International Financial Reporting Standards. b) Short-term Compensated Absences In accordance with IAS 19 Employee Benefits, the Group must recognise theexpected cost of short-term employee benefits in the form of compensatedabsences, including contractual vacation and sick leave allowances. Accumulated unused allowances accrued at the transition date and at 31 July 2007were £1,148,000 and £1,181,000 respectively, resulting in an additional expensefor the year ended 31 July 2007 of £33,000. c) Financial Instruments As at 31 July 2007 the Group held a reset cap and collar interest rate contractand forward exchange contracts with a fair value of £69,000 (£40,000 as at 1August 2006). These contracts meet the IAS 39 Financial Instruments: Recognitionand Measurement definition of a derivative, falling into the category of a"financial asset at fair value through profit or loss". Therefore, in compliance with IAS 39, the fair value of these contracts isrecognised on the balance sheet at each post transition reporting date, withcorresponding finance income in the consolidated income statement for the yearended 31 July 2007 of £29,000. The fair value liability and finance expense carried in the balance sheet andconsolidated income statement for the year ended 31 July 2008 is £685,000 and£754,000 respectively. Of the total finance expense, £202,000 relates to a USDinterest rate hedge on borrowings used to finance the acquisition of OutCastCommunications, £42,000 to USD foreign exchange hedging and £441,000 to EURforeign exchange hedging. The negative fair value on these financial instrumentshas resulted from USD interest rate reductions and both EUR and USD foreignexchange strengthening during the year ended 31 July 2008. d) Income Tax IAS 12 looks at 'temporary differences' between tax and book values for deferredtax whereas UK GAAP assesses 'permanent' and 'timing differences' reversing infuture periods. The impact on the consolidated income statement and consolidatedbalance sheet arises in relation to share-based payments. As a result, adeferred tax asset of £210,000 was recognised as at 31 July 2007 (£78,000 at thetransition date) with the corresponding credit recognised partially in theincome statement and partially in equity. e) Contingent Consideration and Share Purchase Obligations Under IAS 32 Financial Instruments: Presentation, own shares issued in returnfor another financial asset should be classified as a liability rather thanwithin shareholders' equity. As at 31 July 2007 the Group had a balance of£190,000 of shares to be issued as contingent consideration for the acquisitionof OutCast Communications. This balance has been presented as a liabilityresulting in a reduction in equity of £190,000. Under IAS 32 Financial Instruments Presentation and IAS 39 FinancialInstruments: Recognition and Measurement, share purchase obligations must berecognised as a liability at fair value. The obligation to acquire the remainingshares in Lexis Public Relations Limited ("Lexis") is recorded, on transition,at the discounted expected settlement amount of £4,961,000 and a correspondingshare purchase reserve is recognised within equity. At each balance sheet date,the remaining liability is re-valued to its discounted expected settlementamount. Any changes in the carrying value of the liability will be recognised inthe consolidated income statement and an interest charge is recognised withinfinance expense in each period in relation to the unwinding of the discount rateon the share purchase obligation. During the year ended 31 July 2007 the Company acquired a further 25% stake inLexis by the acquisition of a 25% stake in the Panther Communications GroupLimited ("Panther"), the parent company of Lexis. The share purchase obligationwas reduced by the consideration of £2,071,000 with a corresponding decrease inthe share purchase reserve. The interest charge for the period ending 31 July2007 was £173,000 thus the share purchase liability as at 31 July 2007 was£3,063,000. During the year ended 31 July 2008 the liability was reduced by theconsideration of £1,510,000 for the purchase of a further 11.15% stake in Lexis,with a corresponding decrease in the share purchase reserve. The interest chargefor the period was £184,000. As at 31 July 2008 the share purchase obligation is£1,737,000. f) Software Under IAS 38 Intangible Assets, certain computer software must be classified asan intangible asset. Consequently, £829,000 as at 31 July 2007 (£298,000 as atthe transition date) has been reclassified from property, plant and equipment tointangible assets. £44,000 of amortisation on software is reclassified fromdepreciation to amortisation within the consolidated income statement for theyear ending 31 July 2008. g) Share-based payments Previously the company maintained a separate reserve within equity for sharebased payments under UK GAAP. For the sake of simplicity under adopted IFRS theGroup has included within retained earnings £491,000 as at 31 July 2007(£229,000 as at the transition date) which was previously presented as theshare-based payments reserve. h) Foreign currency translation In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates,goodwill arising on the acquisition of foreign subsidiaries is treated as amonetary asset and restated using exchange rates prevailing at each balancesheet date. This treatment is the same as that applied under UK GAAP with theexception that under adopted IFRS, all translation differences be transferred toa separate foreign currency translation reserve within equity. In the 2008Interim Report, the Group had taken advantage of the exemption allowed by IAS 1Presentation of Financial Statements (Exemptions iii), and treated the goodwillon foreign subsidiaries acquired prior to 1 August 2006 as a sterling item,using exchange rates applied at that date. The Group has elected to no longerapply this exemption, and this change in accounting treatment has required arestatement of the comparative goodwill and foreign currency translation reservereported at 31 January 2008. In accordance with IAS 21, exchange differences resulting from the translationof foreign subsidiaries in the consolidated balance sheet must be presented as aseparate reserve within shareholders' equity. As a result the Group hasreclassified £206,000 as at 31 July 2007 (£nil as at the transition date) fromretained earnings to the foreign currency translation reserve. i) Finance lease obligation Under UK GAAP finance lease obligations were classified as loans and borrowing.Under adopted IFRS the Group include within other payables. As a result theGroup has reclassified £20,000 as at 31 July to non-current other payables and£392,000 to current trade and other payables. An explanation of how the transition from UK GAAP to IFRS has affected theGroup's financial position and financial performance is set out in the tablesbelow and the notes that accompany the tables. There are no material adjustmentsto the cash flow statement in any of the periods presented. Reconciliation of profit for the year ended 31 July 2007 (end of last periodpresented under UK GAAP) \* T UK GAAP IFRS 3 IAS 38 IAS 19 IAS 39 IAS 12 IAS IFRS 32/39 Period Period ended 31 ended 31 July 07 July 07 10(a) 10(f) 10(b) 10(c) 10(d) 10(e) £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Billings 69,422 - - - - - - 69,422======================================================================================================== Revenue 59,268 - - - - - - 59,268 Staff costs 39,930 - - 33 - - - 39,963Depreciation 1,465 - (44) - - - - 1,421Amortisation and amounts written off intangible assets 826 (826) 44 - - - - 44Reorganisation costs 295 - - - - - - 295Other operating charges 11,852 - - - - - - 11,852 -------------------------------------------------------------------------- Total operating charges (54,368) 826 - (33) - - - (53,575) -------------------------------------------------------------------------- Operating profit 4,900 826 - (33) - - - 5,693 -------------------------------------------------------------------------- Finance expense (596) - - - - - (173) (769)Finance income 113 - - - 29 - - 142 -------------------------------------------------------------------------- Net finance expense (483) - - - 29 - (173) (627) -------------------------------------------------------------------------- Share of profit of equity accounted associates 56 - - - - - - 56 --------------------------------------------------------------------------Profit before income tax 4,473 826 - (33) 29 - (173) 5,122 Income tax expense (1,746) (74) - 99 (9) (51) - (1,781) -------------------------------------------------------------------------- Profit for the period 2,727 752 - 66 20 (51) (173) 3,341 ========================================================================== Attributable to:Equity holders of the parent 2,486 752 - 66 20 (51) (173) 3,100Minority interest 241 - - - - - - 241 -------------------------------------------------------------------------- 2,727 752 - 66 20 (51) (173) 3,341 ========================================================================== Earnings per shareBasic (pence) 5.08 6.33Diluted (pence) 4.99 6.23\* T Reconciliation of equity for the year ended 31 July 2007 (end of last periodpresented under UK GAAP) \* T UK GAAP Reclass IFRS 3 IAS 19 IAS 39 IAS 12 IAS IFRS 32/39 Period Period ended 31 ended 31 July 07 July 07 10(f-,i) 10(a) 10(b) 10(c) 10 (d) 10(e)Assets £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Property, plant and equipment 2,991 (829) - - - - - 2,162Intangible assets 11,871 829 807 - - - - 13,507Investments in equity accounted associates 124 - - - - - - 124Deferred tax asset 1,725 - - 317 - 210 - 2,252Other receivables 397 - - - - - - 397 ----------------------------------------------------------------------------Total non-current assets 17,108 - 807 317 - 210 - 18,442 ---------------------------------------------------------------------------- Trade and other receivables 14,991 - - - - - - 14,991Cash and cash equivalents 5,834 - - - - - - 5,834Current tax assets - - - - - - - -Derivative financial assets - - - - 69 - - 69 ----------------------------------------------------------------------------Total current assets 20,825 - - - 69 - - 20,894 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------Total assets 37,933 - 807 317 69 210 - 39,336 ============================================================================ Liabilities Loans and borrowings 5,190 (20) - - - - - 5,170Deferred tax liability - - 74 - 21 - - 95Other payables - 20 - - - - - 20Deferred consideration 1,662 - - - - - - 1,662Share purchase obligation - - - - - - 1,737 1,737 ----------------------------------------------------------------------------Total non-current liabilities (6,852) - (74) - (21) - (1,737) (8,684) ---------------------------------------------------------------------------- Bank overdraft - - - - - - - -Loans and borrowings 712 (392) - - - - - 320Trade and other payables 11,656 392 - 1,181 - - - 13,229Corporation tax liability 29 - - - - - - 29Deferred consideration 576 - - - - - 190 766Share purchase obligation - - - - - - 1,326 1,326 ----------------------------------------------------------------------------Total current liabilities (12,973) - - (1,181) - - (1,516) (15,670) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------Total liabilities (19,825) - (74) (1,181) (21) - (3,253) (24,354) ----------------------------------------------------------------------------TOTAL NET ASSETS 18,108 - 733 (864) 48 210 (3,253) 14,982 ============================================================================EquityShare capital 1,334 - - - - - - 1,334Share premium reserve 5,157 - - - - - - 5,157Merger reserve 2,160 - - - - - - 2,160Share purchase reserve - - - - - - (2,890) (2,890)Foreign currency translation reserve - (187) (19) - - - - (206)Share-based payment reserve 491 (491) - - - - - -Shares to be issued 190 - - - - - (190) -Investment in owns shares (681) - - - - - - (681)Retained earnings 9,259 678 752 (864) 48 210 (173) 9,910 ----------------------------------------------------------------------------Total equity attributable to equity holders of the Company 17,910 - 733 (864) 48 210 (3,253) 14,784Minority interests 198 - - - - - - 198 ----------------------------------------------------------------------------TOTAL EQUITY 18,108 - 733 (864) 48 210 (3,253) 14,982 ============================================================================\* T \* T As at 1 August 2006 (date of transition) Effect of Under UK GAAP transition to Under IFRS IFRS £'000 £'000 £'000 £'000 £'000 £'000Assets Property, plant and equipment 3,063 (298) 2,765Intangible assets 11,188 298 11,486Investments in equity accounted associates 92 - 92Deferred tax asset 854 297 1,151Other receivables 335 - 335 -------- -------- --------Total non-current assets 15,532 297 15,829 Trade and other receivables 14,411 - 14,411Cash and cash equivalents 4,018 - 4,018Current tax assets 169 - 169Derivative financial assets - 40 40Total current assets 18,598 40 18,638 --------- --------- ---------- Total assets 34,130 337 34,467 ========= ========= ========== Liabilities Loans and borrowings 4,642 - 4,642Deferred tax liabilities - 12 12Deferred consideration 2,192 318 2,510Share purchase obligation - 3,098 3,098 -------- -------- --------Total non-current liabilities (6,834) (3,428) (10,262) Bank overdraft 227 - 227Loans and borrowings 588 - 588Trade and other payables 11,304 1,148 12,452Corporation tax liability - - -Deferred consideration 435 240 675Share purchase obligation - 1,863 1,863 -------- -------- --------Total current liabilities (12,554) (3,251) (15,805) --------- --------- ---------- Total liabilities (19,388) (6,679) (26,067) --------- --------- ---------- TOTAL NET ASSETS 14,742 (6,342) 8,400 ========= ========= ========== EquityShare capital 1,303 - 1,303Shares to be issued 558 (558) -Share premium reserve 5,157 - 5,157Merger reserve 1,353 - 1,353Share purchase reserve - (4,961) (4,961)Share-based payment reserve 229 (229) -Investment in own shares (1,487) - (1,487)Retained earnings 7,629 (594) 7,035 --------- --------- ---------- Total equity attributable to equity holders of the Company 14,742 (6,342) 8,400Minority interests - - - --------- --------- ---------- TOTAL EQUITY 14,742 (6,342) 8,400 ========= ========= ==========\* T Copyright Business Wire 2008Related Shares:
NFC.L