19th Jul 2005 07:00
NCC Group PLC19 July 2005 Notes 1. Basis of preparation The financial information in this preliminary announcement has been prepared inaccordance with the accounting policies set out in the financial statements ofNCC Group Plc (formerly the NCC Group (Holdings) Limited for the year ended 31May 2005 which have remained unchanged from the financial year 2004. The financial information set out above does not constitute the Group'sstatutory accounts for the year ended 31 May 2005 or 2004, but is derived fromthose accounts. Statutory accounts for the year ended 31 May 2004 have beenfiled with the Registrar of companies. The statutory accounts for 2005 will bedelivered to the Registrar of Companies following the Company's Annual GeneralMeeting. The auditors have reported on those accounts; their reports wereunqualified and did not contain a statement under Section 237(2) or (3) of theCompanies Act 1985. When published, the Company's Annual Report and Accounts will be sent toshareholders and will be made available to the public at the Company'sregistered office, Manchester Technology Centre, Oxford Road, Manchester. M17EF 2. Segmental information 2005 2004a) Turnover by geographical segment £000 £000 UK 15,790 12,452Rest of Europe 1,104 1,011Rest of the World 1,077 1,056Total turnover 17,971 14,519 2005 2004b) Turnover by business segment £000 £000 Escrow Solutions 8,238 6,721Testing Solutions 4,352 3,441Consultancy 5,381 4,357Total turnover 17,971 14,519 Operating profit by business segmentEscrow Solutions 4,954 3,760Testing Solutions 1,039 884Consultancy 1,028 900Segment operating profit 7,021 5,544Amortisation of goodwill (1,500) (1,505)Head office costs (920) (738)Operating profit 4,601 3,301 Net assets / (liabilities) by business segmentEscrow Solutions (3,688) (3,003)Testing Solutions 48 150Consultancy 280 453Unallocated net assets 25,087 3,222Total net assets 21,727 822 Unallocated net assets consist of goodwill, cash, tax payable and othercentrally held assets and liabilities. 3. Exceptional finance costs and goodwill amortisation During the year ended 31 May 2005, unamortised capitalised deal fees of £861,000(2004: nil) were written off to the profit and loss account when the debtfinancing was repaid on 17 July 2004 following the Group's listing on AIM. Only£35,000 had a cash impact in the year as the rest were paid in prior periods. 4. Profit on ordinary activities before taxation 2005 2004 £000 £000Profit on ordinary activities before taxation is statedafter charging/(crediting): Auditors' remuneration:Group 26 17Company 1 2Non audit 15 38 Depreciation and other amounts written off tangible andintangible fixed assets:Owned 354 262 Amortisation of goodwill 1,500 1,505 Operating lease rentals charged:Hire of plant and equipment 300 236Other operating leases 340 169Profit on disposal of fixed assets (11) (12) Non audit fees relate to taxation advice and consultancy services regarding theintroduction of international financial reporting standards. In addition to thenon audit fees noted above, the auditors provided due diligence services inrespect of the floatation on AIM totalling £217,000. 5. Staff numbers and costs The average number of persons employed by the Group during the year, includingdirectors is analysed by category as follows: Number of employees 2005 2004 Operational 55 50Administration, sales and marketing 134 101 189 151 6. Interest receivable and interest payable 2005 2004 £000 £000Interest receivable and similar incomeShort term deposits 123 104Profit on disposal of interest rate swap 39 - 162 104 Interest payable and similar chargesAmounts payable on bank loans and overdrafts (527) (836)Amounts payable on loan notes - (1,007)Amortisation of deal fees on term loans (7) (159) (534) (2,002) 7. Taxation Analysis of charge in period 2005 2004 £000 £000 UK corporation taxCurrent tax on income for the year 1,488 893Adjustment to tax charge in respect of prior periods (9) -Total Current tax 1,479 893Deferred tax (6) -Tax on profit on ordinary activities 1,473 893 The company envisages that its effective rate of tax will remain consistent withprior periods. 8. Dividends 2005 2004 £000 £000 Interim paid (0.75p per ordinary share) (245) -Final proposed (1.75p per ordinary share) (571) -Preference dividend (6% preference shares) - (4) (816) (4) 9. Earnings per share The calculation of earnings per share is based on the following: 2005 2004 £000 £000 Profit for the period 1,079 506Dividends 816 4Earnings used in basic and diluted 1,895 510 Earnings per shareAmortisation and exceptional item net of tax 2,103 1,505Adjusted Earnings used in basic and diluted 3,998 2,015 Earnings per share Number of Number of Shares Shares 000's 000'sBasic weighted average number of shares in issue 31,292 19,545Dilutive effect of share options 472 -Diluted weighted average shares in issue 31,764 19,545 10. Intangible fixed assets Goodwill arising on consolidation £000CostAt beginning and end of year 29,121AmortisationAt beginning of year (1,720)Charge for year (1,500)At end of year (3,220) Net book valueAt 31 May 2005 25,901At 31 May 2004 27,401 11. Tangible fixed assets Computer Plant and Fixtures Motor vehicles Total equipment equipment and fittingsGroup £000 £000 £000 £000 £000 CostAt beginning of year 1,249 117 126 130 1,622Additions 241 227 328 38 834Disposals (3) - - (65) (68)At end of year 1,487 344 454 103 2,388DepreciationAt beginning of year 878 88 59 51 1,076Charge for year 222 42 63 27 354On disposals (1) - - (43) (44)At end of year 1,099 130 122 35 1,386Net book value At 31 May 2005 388 214 332 68 1,002Net book value At 31 May 2004 371 29 67 79 546 Company The company does not have any tangible fixed assets. 12. Debtors Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000 Trade debtors 2,666 2,407 - -Amounts owed by Group undertakings - - 207 134Deferred tax (see below) 77 71 - -Prepayments and accrued income 929 1,046 - - 3,672 3,524 207 134 All debtors fall due within one year. 13. Creditors: amounts falling due within one year Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000 Bank loans 1,200 1,362 1,200 1,362Trade creditors 331 365 - -Amounts owed to Group - - - 4 UndertakingsCorporation tax 728 290 - -Other taxation and social security 892 701 - -Dividends payable 571 4 571 4Other creditors - 56 - 56 3,722 2,778 1,771 1,426 The gross amount of the bank loan for both the company and the Group is£1,200,000 (2004: £1,400,000) from which capitalised deal fees of nil (2004:£38,000) have been deducted. The bank loan is unsecured. 14. Accruals and deferred income Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000 Deferred income 4,885 4,033 - -Accruals 1,340 1,550 142 586 6,225 5,583 142 586 Deferred income of £4,885,000 (2004: £4,033,000) consists of Escrow Solutionsagreement revenue and maintenance revenue that has been deferred to be releasedto the profit and loss account over the contract term on a pro-rata basis. 15. Creditors: amounts falling due after one year Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000 Lease incentives 122 - - -Term loan A 3,900 7,575 3,900 7,575Term loan B - 3,000 - 3,000Loan notes - 16,779 - 16,779Total 4,022 27,354 3,900 27,354 Issue costs (25) (961) (25) (961)Amortisation of issue costs 7 173 7 173Net book value 4,004 26,566 3,882 26,566 The issue costs are being amortised over the term of the loan. Term loan A attracts an interest rate of LIBOR plus 0.975%. Loan repayments areto be made quarterly on the last day of March, June, September and December ofeach year. The loan is unsecured. No outstanding loans are due for repayment after five years. 16. Financial instruments Financial instruments policy All instruments utilised by the Group are for financing purposes. Theday-to-day financial management and treasury are controlled centrally for alloperations. During the year ended 31 May 2005 the Group realised proceeds of£39,000 (2004: nil) on disposal of an interest rate swap, the proceeds areincluded within interest receivable. 17. Called up share capital Number of shares 2005 2004 £000 £000AuthorisedPreferred ordinary shares £1.00 (nonequity) 65,000 - 65A Ordinary shares £1.00 30,000 - 30B Ordinary shares £1.00 5,000 - 5R Ordinary shares £1.00 1 - -Ordinary shares of 1.00p each 50,000,000 500 - 500 100Allotted, called up and fully paidPreferred ordinary shares £1.00 (nonequity) 65,000 - 65A Ordinary shares £1.00 30,000 - 30B Ordinary shares £1.00 5,000 - 5R Ordinary shares £1.00 1 - -Ordinary shares of 1.00p each 32,604,185 326 - 326 100 On 8 July 2004 the Company conducted a share reorganisation which increased itsauthorised share capital to £500,000 divided into 50,000,000 ordinary shares of1.00p each which 32,604,185 were issued and fully paid and 17,395,815 ordinaryshares were un-issued. Share options and share incentives The Company has a number of share option schemes under which options tosubscribe for the Company's shares have been granted to directors and staff.Options granted under these share option schemes as at 31 May 2005 were asfollows. Other than these options granted there have been no other optionsgranted during the year. Exercisable Options at in year ended 31 May 2005 Exercise price 31 May Approved EMI scheme 1,132,080 £1.70 2008-2015Share save scheme 343,678 £1.36 2008LTIP 169,118 £nil* 2008 \* The exercise price of the LTIP scheme is nil although £1.00 is payable on eachoccasion of exercise. There were no share options granted in the year ended 31 May 2004. 18. Reserves Share premium Profit and loss account account £000 £000GroupAt beginning of year 219 526Premium on share issue 19,600 -Retained profit for the year - 1,079Currency translation adjustment - -At end of year 19,819 1,605 Share premium Profit and loss account account £000 £000CompanyAt beginning of the year 219 691Premium on share issue 19,600 -Retained profit for the year - 3,233At end of year 19,819 3,924 19. Minority interests 2005 2004 £000 £000 At beginning of year (23) (23)Acquired with subsidiary undertakings - -At end of year (23) (23)Equity (3) (3)Non-equity (20) (20) (23) (23) 20. Contingent liabilities There is no group banking, performance bond or guarantee to any fellow company.In 2004 each group company was party to a group banking facility under which itguaranteed the bank borrowings, performance bonds and guarantees of its fellowcompanies. The drawings under this group facility were £11,975,000 in 2004. 21. Reconciliation of movements in shareholders' funds andmovements on reserves Group Group Company Company 2005 2004 2005 2004 £000 £000 £000 £000Profit / (loss) for the financial year 1,895 510 (1,351) 1,028Dividends (816) (4) 4,584 (4) 1,079 506 3,233 1,024 New share capital subscribed 226 223 226 223Increase in share premium 19,600 - 19,600 -Currency translation loss - (1) - -Net increase in shareholders' funds 20,905 728 23,059 1,247Opening shareholders' funds 845 117 1,010 (237)Closing shareholders' funds 21,750 845 24,069 1,010 22. Notes to the consolidated cash flow statement a. Reconciliation of operating profit to net cash flows from operatingactivities 2005 2004 £000 £000 Operating profit 4,601 3,301Depreciation charge 354 262Amortisation of goodwill 1,500 1,505Profit on sale of fixed assets (11) (12)Increase in debtors (142) (524)Increase in creditors 1,359 686Net cash inflow from operating activities 7,661 5,218 b. Analysis of net funds / (debt) At Cash Non cash At end of beginning Flow Items Year of year £000 £000 £000 £000 Cash in hand and at bank 4,278 825 - 5,103Loan and loan notes (27,928) 23,680 (834) (5,082)Total (23,650) 24,505 (834) 21 c. Reconciliation of net cash flow to movement in net funds / (debt) 2005 2004 £000 £000 Increase in cash in the year (Note 22b) 825 413Cash outflow from movement in loans and loan notes 23,680 2,763Non cash items (834) (182)Movement in net debt in the year 23,671 2,994Net debt at start of year (23,650) (26,644)Net funds / (debt) at end of the year 21 (23,650) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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