27th Mar 2007 07:02
Gresham Computing PLC27 March 2007 Embargoed until 07.00 HRS (BST)27 March 2007 Gresham Computing plc ("Gresham," "the Group" or "the Company") Preliminary Results for the year ended 31 December 2006 Gresham, the specialist provider of real-time financial solutions and storagesolutions, today announces preliminary results for the year ended 31 December2006. Highlights: • Revenue stream improved 4% to £14.5m (2005: £13.9m); • 67% reduction in Loss before Tax to £414,000 (2005: £1.25m); • Enhanced year-end cash position at £3.56m (2005: £1.97m); • Successful re-branding of product suite under the 'Clareti' name to broaden and drive sales; • Real Time Nostro - rebranded as Clareti Cash Reporting - continues to benefit from Gresham's role as sales and support lead: 22 major banks now provide data, 5 major banks have agreed to receive data as a live feed, and 5 use the secure web browser. • Signed a new agreement in December 2006 to provide a hosted intraday cash management solution to a major bank's corporate customers which is expected to go live in 2007 and be rolled out over several years. • Further expansion of global footprint with opening of new offices in the key financial centres of New York and Kuala Lumpur. • Today announced a cash reporting and payables financing service with Cable & Wireless as the first customer. Financial Highlights: FY 2006 FY 2005 £,000 £,000 Revenue 14,522 13,982Trading Loss (530) (1,356)Loss before Tax (414) (1,246)Attributable to equity holders of the Parent (374) (1,101)Loss per share (pence) (0.74) (2.20)Cash 3,557 1,973 Commenting on the results Andrew Walton-Green, Gresham Chief Executive Officer,said: "In recent years we have invested heavily in building up a full range ofinnovative solutions for the payments, cash management and storage segments.Our primary focus now rests on getting these products to market. As a result wecontinue to invest in high calibre sales, pre-sales and marketing resources tohelp us service our global markets. We also continue to expand our globalfootprint and have recently opened new offices in the key financial centres ofNew York and Kuala Lumpur. Our payment and cash reporting solutions for both the banking and corporatemarkets are already delivering revenues. We expect these revenues to growconsiderably in the medium to long-term. Furthermore, we believe that theaddition of supply chain financing to our solutions portfolio will substantiallyenhance our medium to long-term prospects and we anticipate making significantprogress on this strategic initiative during the coming financial year." For further information please contact: Gresham Computing plcAndrew Walton-Green +44 (0)20 7653 0228FDJames Melville-Ross / Matt Dixon +44 (0)20 7831 3113 CHAIRMAN'S STATEMENT Gresham is a specialist in real-time financial and storage solutions. Today weprovide our products and solutions to more than 500 businesses around the worldincluding nearly a quarter of the Fortune 500. We pride ourselves in offering innovative business solutions backed byenterprise class technology. The dedication of our staff ensures superb deliveryand support of our customers globally. As a result, in our 35th year sinceincorporation, we have a well-deserved reputation for innovation, technicalexcellence and reliability, borne of a strong service culture. As a group, we have high aspirations. I am pleased to report that we are makingsolid progress towards realising our ambitions. Overview of the year 2006 can be characterised as a year of increased focus and of growth. Perhapsthe most visible result of this increased focus has been the successfulre-branding of our product suite under the 'Clareti' brand name. The Claretibrand now forms a solid platform on which we can continue to improve ourefficiency in bringing Gresham's innovative solutions to market. Real-time financial solutions In April 2006, Gresham took on the leading sales and technical support roles forthe Clareti Cash Reporting Service ("CCRS"), previously known as Real TimeNostro. CCRS is a global solution to SWIFTNet Cash Reporting that provides asingle, consolidated view of multi-currency cash positions. Through closecooperation with Cable & Wireless and our joint customers, the major banks, wehave effected a smooth transition of operational responsibilities to enable usto lead this global initiative. Cable & Wireless continue to provide securehosting and a global telecommunications infrastructure. We currently have 22 major banks that have agreed to provide data to theservice, the latest being The Bank of New York. Today, 14 of these banks providenear real-time data to our hub. The increase in the number of live providerbanks who are populating our database with multi-currency payment informationclearly increases the value of the hub service to both new and existing users.We currently have 5 major banks that have agreed to receive data as a live datafeed and 5 for the browser. The browser is an effective tool to gain nearreal-time visibility of an individual transaction; a single customer; a bank'sposition in a single currency; a single correspondent or a real-time statusreport on its global multi-currency multi-correspondent position. The service isused to monitor both what has happened as well as what is expected to happenproviding alerts and reports to manage exceptions as they occur. As a result,the service is proving a valuable tool for management and investigations inglobal cash management. While the live data feed is more expensive than ourbrowser service, the benefits of aggregated, normalised data being fed into abank's core systems enables intraday reconciliation. This in turn enables all ofa bank's core processes to be enabled to extract the maximum value from thisdata. Our strategy has been to expand our service offering of real-time intraday cashmanagement into the corporate market, providing national data as well asinternational data. We therefore offer a range of Clareti solutions to enableour banking customers to provide intraday/real-time payment information to theircustomers. We are pleased to announce that in December 2006 we signed a newagreement to provide a hosted solution for a major global bank to provideintraday cash management services to their UK corporate customers. The serviceis expected to go live in 2007 and be rolled out to several thousand of thebank's key customers over time, with the bank acting as the sales channel. As well as providing cash reporting technology to understand what has happened,we have developed a simple and effective cash reporting solution that providesvital information about what will happen in the future. This patent pendingsolution combines Gresham cash reporting and payables financing technology andenables a supplier to see payments that it will receive from a buyer in thefuture, information that is of immense value to a corporate. The payablesfinancing technology module then enables a supplier to take early payment from abuyer with a financial institution funding the gap between early payment and theactual payment from the buyer. Unlocking the financial supply chain represents ahuge market opportunity both for Gresham and the wider market. We are currentlyengaged in a number of exciting opportunities with this technology combinationin Europe and Asia. I am pleased to announce that this combination of cash reporting and payablesfinancing technology is now available to both banks and companies through aGresham service that is securely hosted by Cable & Wireless. In addition, Cable& Wireless will be our first customer providing the cash reporting and payablesfinancing service to their own suppliers in the UK. Together we will enableCable & Wireless' major suppliers to have "Clareti" around the financial supplychain and access to early payment of amount due. Once payment data enters the corporate environment, it typically needs to bemanaged. For the largest companies in the world, this necessitates the use ofcash management software, reconciliation software and treasury managementsoftware. Gresham has some but not all of the software required to deliver acomplete solution. As a result we have chosen to work with major partners toensure we are able to provide a best of breed solution to some of the largestbanks and corporate groups in the world. We are very pleased to act as a keyintegration partner for Wall Street Systems in Asia Pacific where we arebuilding upon our credentials established from successfully implementing globalcash management solutions for Khazanah Nasional and Petronas; the regionslargest and most influential organisations. All banks are under pressure to reduce payment costs. In Europe, the SingleEuropean Payments Area initiative and Target 2 are key drivers for costreduction, greater visibility and control. However, there are also significantopportunities for banks that can deliver fully integrated payment solutions toenhance customer value through "netting" or re-routing of high cost payments aslow cost payments. Through years of experience in this area and in particularthe core banking technology now developed and implemented with some of thelargest banks in the world for the CCRS initiative, we are now able to provide afully integrated and configurable payments hub which enables a bank to leverageit's existing payment silos to deliver real-time payment solutions. Batch processing and legacy systems are still prevalent in most parts of thefinancial services market place. Whilst much of what we do today is focused onreal-time financial solutions and modern technology, we have a real advantagefrom our ability to unite legacy and modern using know-how and technologydeveloped over many years. Gresham is currently working with some of thelargest financial institutions in the world to unlock the value from thesesystems with world class enterprise solutions spanning internet banking,automated lending decisions and delivery of real-time stock exchange data to aPC or a mobile device. Storage solutions Our storage software currently resides in some of the largest data centres inthe world providing a key link between the business and its tape storage silos.Since we first came to market with a product around 10 years ago, we have builtup over 4300 installations of Clareti EDT in hundreds of customers around theworld; 70 of which are Fortune 500 companies. Clareti EDT dynamically managestape drives and works in a TSM/StorageTek, TSM/IBM and TSM/ADIC environment.TSM is a high-end enterprise back-up product from IBM used by many of thelargest companies in the world. As a result, Clareti EDT remains a strong feature of our storage business, bothin terms of maintenance revenues and new license sales. Our interaction withtruly global customers ensures that we remain at the leading edge of enterprisestorage and as a result we are recognised by our customers as experts in ourfield. From this deep understanding of the market and enterprise customer needs,we developed our new flagship storage product Clareti VTL (Virtual TapeLibrary), launched in mid 2006. Emerging VTL solutions provide companies with the ability to more efficientlymanage their data storage requirements. By creating a "virtual tape" on a disk,open systems and mainframe systems perform their normal back-up operations andinstead of backing up to tape they are fooled into backing up to multiple diskarrays. This enables very fast back-up times. However, since disk isconsiderably more expensive than tape as a storage media and arguably lessresilient, the largest data users globally still then want to move the data totape. Clareti VTL was developed to enable back up to tape via disk and as aresult is the only virtual tape system that can address each of these concernswith a single solution. Integrating seamlessly into existing environments,Clareti VTL will work with any back up application, any tape drive or mediatype. Superior management and support features ensure business continuance,while letting you control the storage enterprise. In addition, Clareti VTL isflexible enough to scale from the enterprise level down to the small business. The capabilities of our Clareti VTL solution were put to the test in mid 2006when we came second to EMC in an external analysts assessment of the VTL diskmarket. We beat 11 other competing solutions in the VTL disk storage marketwithout even demonstrating our key benefit of then actually writing data totape. We secured our first OEM partner for Clareti VTL in mid 2006 and anticipatesecuring further OEM deals in 2007. We also started making direct approaches tocustomers supported by our enhanced sales and marketing resources. The solutionis now live in the market with a growing customer base. In February 2007, we completed the restructuring of our small French databack-up business and this business is now in maintenance mode. Financial Results Group revenues were up 4% to £14.52m (2005: £13.98m) generating a loss of £0.37mafter tax (2005: loss £1.10m) with cash at year end of £3.58m (2005: £1.97m). EMEA revenues grew 6% to £8.82m (2005: £8.33m) from an overall net increase insales of real-time financial solutions after taking into account reductions inour IT staff placement business and French storage business. Profitability inEMEA improved significantly with growth in the real-time financial solutionsbusiness and reduced losses from our French storage business driving thischange. North American revenues grew 2% to £3.94m (2005: £3.87m) as sales of our new VTLstorage solution and growth in our real-time financial solutions business.Overall we increased costs in the second half as we added new management, salesand marketing resources in this region. Asia Pacific revenues remained relatively static year on year as we completed amajor cash management integration project and saw further pipeline sales delayedto 2007 and from weakening of the A$ against the £. This coupled, with aplanned increase in sales and marketing cost base, resulted in a small reductionin profitability taking the region to an £81k loss (2005: £96k profit). Revenue from real-time financial solutions grew 9% to £11.82m (2005: £10.81m)notwithstanding a £0.48m reduction in revenue from our IT staff placementbusiness. Revenue from storage solutions fell 15% to £2.70m (2005: £3.17m), arisingprimarily from a planned restructuring of our French storage business and ageneral weakening of the US$. People and Technology Two of Gresham's greatest assets are its people and technology. In 2006, we significantly increased our investment in senior management, sales,pre sales and marketing people. As well as strengthening the main Board with theappointment of a group sales and marketing director, we hired proven countryleaders in EMEA and North America, both of whom brought strong sales backgroundsin our chosen markets. We intend to further strengthen the team in 2007, takinginto account market opportunities. I welcome those that have chosen to join usat this exciting time and look forward to working with them in the future. Our staff numbers however remained relatively static year on year taking intoaccount the reduction from restructuring our French operations and newrecruitment activity. Gresham creates enterprise-class software based solutions, with Clareti CashReporting and more recently Clareti VTL exemplifying our abilities. Softwaredevelopment is only half the work and we are now placing much greater emphasison taking these solutions to market and becoming sales and marketing led. Wecontinue to invest in technology that adds significant value in our chosenmarkets and during 2006 we launched a number of new technologies to supportorganic growth. The Board In May, we underlined our focus on becoming sales and marketing led with thecreation of a new role and appointment to the Board of Rob Glenn as group salesand marketing director. Rob is an experienced sales professional and this newposition was created to drive our sales and marketing efforts globally. In June, Dean Osman stepped down from the Board after 8 years and took up a newoperational role in Gresham EMEA to drive our real-time financial solutionsbusiness in this key market. Strategy Our strategy is to grow the business organically by focusing on real-timefinancial solutions and storage solutions, whilst controlling costs. In supportof this strategy, we opened an office in Kuala Lumpur to support our work withWall Street Systems in Asia Pacific and more recently opened an office in NewYork to step up our North American real-time financial solutions business inwhat is the largest market in the world for our solutions. We will continue to work with partners to bring solutions to existing and newcustomers and extend our reach globally. Where appropriate, we will seekacquisitions to accelerate our growth in the real-time financial solutionsmarket. Over the past six months, we have engaged heavily with analysts, customers,suppliers and the market generally to verify our position and propositions. Themarkets for real-time financial solutions and storage solutions are very largeand we believe that Gresham technology is well placed to satisfy both existingand growing demand in both. We have strengthened our businesses with theaddition of new people and increased our sales and marketing capabilities toachieve growth based on meeting the needs of our customers. Outlook We have invested heavily over the last few years to build an innovative range ofproducts in the payments, cash management and storage markets. Our current investment is in getting our products to market. We will continue toinvest in high calibre sales, pre-sales and marketing resources to service ourglobal markets and at present, we are making this investment ahead of revenues.We are also investing in key geographies and have recently opened new offices inNew York and Kuala Lumpur. Our solutions are intended to deliver short, medium and long-term returns in thereal-time financial and storage solutions markets. Our new storage product,mobile real-time data solutions, integration and cash management solutions allafford short-term revenue opportunities, complementing the existing revenuesfrom our legacy products. Our payment and cash reporting services and solutions for both the banking andcorporate markets are already delivering revenues. We would expect these to growconsiderably over the medium to long-term. The addition of supply chainfinancing to this portfolio we believe will add substantially to our medium andlong-term prospects and we anticipate making significant progress on thisstrategic initiative this year. Alan HowarthChairman26 March 2007 Group income statementFor the year ended 31 December 2006 Notes 31 December 31 December 2006 2005 £'000 £'000 Revenue 2 14,522 13,982Cost of goods sold (6,928) (7,205) Gross profit 7,594 6,777 Administrative expenses (8,124) (8,133) Trading loss 2 (530) (1,356) Finance revenue 132 124Finance costs (16) (14) Loss before taxation (414) (1,246)Taxation 40 145 Attributable to equity holders of the parent 5 (374) (1,101) Loss per share (total and continuing)Basic loss per share - pence 3 (0.74) (2.20)Diluted loss per share - pence 3 (0.74) (2.20) Group statement of recognised income and expenseFor the year ended 31 December 2006 2006 2005 £'000 £'000 Exchange differences on translation of foreign operations (103) - Net expense recognised directly in equity (103) 0 Attributable loss for the period (374) (1,101) Total recognised income and expense for the period (477) (1,101) Group balance sheetAt 31 December 2006 Notes 31 December 31 December 2006 2005 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 1,195 1,271Intangible assets 5,879 1,879 7,074 3,150Current assetsTrade and other receivables 3,543 8,175Income tax receivable 305 252Other financial assets 32 40Cash and cash equivalents 3,557 1,973 7,437 10,440 TOTAL ASSETS 2 14,511 13,590 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentCalled up equity share capital 2,518 2,513Share premium account 10,037 10,009Other reserves 1,039 1,039Foreign currency translation reserve (132) (29)Retained earnings (6,383) (5,973) 5 7,079 7,559 Non-current liabilitiesFinancial liabilities 0 21Deferred income 1,562 680 Current liabilitiesFinancial liabilities 0 43Income tax payable 121 109Trade and other payables 5,749 5,178 Total liabilities 2 7,432 6,031 TOTAL EQUITY AND LIABILITIES 14,511 13,590 Group cashflow statementFor the year ended 31 December 2006 Notes 2006 2005 £'000 £'000Cashflows from operating activitiesTrading loss (530) (1,356)Depreciation, amortisation and impairment 481 586Share based payment (credit) / expense (36) 42Decrease / (Increase) in trade and other receivables 1,321 (1,424)Increase in trade and other payables 1,441 976 Cash inflow / (outflow) from operations 6 2,677 (1,176)Net income taxes received 0 431 Net cash inflow / (outflow) from operating activities 2,677 (745) Cash flows from investing activitiesInterest received 132 84Repayment of convertible bonds 0 400Purchase of property, plant and equipment (180) (155)Disposal of property, plant and equipment 0 4Payments to acquire intangible fixed assets (956) (709) Net cash used in investing activities (1,004) (376) Cash flows from financing activitiesProceeds from issue of ordinary share capital 33 140Share issue costs 0 (10)Interest paid (8) (14)Decrease in obligations under finance leases (59) (65) Net cash (used in) / generated by financing activities (34) 51 Net increase / (decrease) in cash and cash equivalents 1,639 (1,070)Cash and cash equivalents at beginning of period 1,973 3,016Exchange adjustments (55) 27 Cash and cash equivalents at end of period 3,557 1,973 Notes to the financial information 1 Basis of preparation The above financial information does not constitute statutory financialstatements as defined by section 240 of the Companies Act 1985. The results forthe year ended 31 December 2006 and the balance sheet at that date are extractedfrom the statutory financial statements (on which the auditors have given anunqualified opinion) which will be filed with the Registrar of Companies. Thecomparative financial information is extracted from the statutory accounts forthe year ended 31 December 2005 (on which the auditors gave an unqualifiedopinion). The financial statements are prepared under the historical costconvention, except for certain financial instruments which are measured at fairvalue. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements, and the reportedamounts of revenues and expenses during the reporting period. Although theseestimates are based on the Directors' best knowledge of current events andactions, actual results ultimately may differ from those estimates. 2 Segmental information Prior year adjustment and restatement of segment information comparatives In October 2006, the group announced the launch of its Clareti Real-TimeFinancial Solutions and Clareti Storage Solutions. On the same date, the groupbegan to re-organise such that reporting of results and operations was on ageographic basis with a managing director responsible for and reporting on eachcountry. From 1 January 2007, results have been reported to the board based ona primary geographic segment. Taking into account the requirements of IAS 14 in the context of the changesdescribed above, the directors consider that the dominant source and nature ofrisk and return is now geographic based and have revised the segments disclosedin these financial statements accordingly. Specifically, in these financial statements the primary segment has been changedfrom business segment to geographic segment and the secondary segment has beenchanged from geographic segment to business segment. In addition, the businesssegments themselves have been revised such that Real-Time Financial Solutionsand Storage Solutions have replaced Enterprise Solutions and Enterprise Storage. The identification of segments is part of the segment accounting policy andaccordingly the change has been accounted for and disclosed in accordance withIAS 8 as a prior year adjustment with restatement of comparative segmentinformation. Segments The primary segment reporting format is determined to be geographic segments asthe group's risks and rates of return are affected predominantly by differencesin geography. Secondary segment information is reported by business segment. Theoperating businesses are organised and managed separately according togeography, with each segment representing a strategic business unit that offersthe Clareti range of solutions to market. The group's geographic segments are based on the location of the group's assets.Sales to external customers disclosed in geographic segments are based on thegeographic location of its customers and destination. The geographic segmentsrelate primarily to operations in the following countries: Asia Pacific:Australia and Malaysia; EMEA: UK and Northern Europe; North America: UnitedStates of America, Canada and the Caribbean. The real time financial solutions segment is a supplier of solutionspredominantly to the finance and banking markets. Included within the real timefinancial solutions segment is the group's IT staff placement business and,because this business contributes significant revenues, certain additionalinformation concerning the results of this business have been provided to aidunderstanding of the overall segment results. The storage solutions segment isa supplier of solutions predominantly to the enterprise level storage market. Transfer prices between segments are set on an arm's length basis in a mannersimilar to transactions with third parties. Segment revenue, segment expense andsegment result include transfers between business segments. Those transfers areeliminated in consolidation. Primary reporting format - Geographic segments The information previously reported in respect of the year ended 31 December2005 has been restated as detailed above. The following tables present revenue and profit/loss and certain asset andliability information regarding the group's geographical segments for the yearsended 31 December 2006 and 2005 (as restated), all of which are continuing. Revenue by source Year ended 31 December 2006 Year ended 31 December 2005 Segment Inter- Sales to Segment Inter- Sales to revenue segment external revenue segment external sales customers sales customers £'000 £'000 £'000 £'000 £'000 £'000 Asia Pacific 2,384 (613) 1,771 2,269 (488) 1,781EMEA 8,869 (54) 8,815 8,337 (4) 8,333North America 3,936 0 3,936 3,874 (6) 3,868 15,189 (667) 14,522 14,480 (498) 13,982 Revenue by destination 2006 2005 £'000 £'000 Asia Pacific 3,104 2,571EMEA 9,817 9,910North America 1,601 1,501 14,522 13,982 Result by segment Year ended 31 December 2006 Year ended 31 December 2005 Asia EMEA North Total Asia EMEA North Total Pacific America Pacific America £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Segment result (81) 95 711 725 96 (1,101) 808 (197) Unallocated expenses (1,255) (1,159) Trading loss (530) (1,356)Net finance revenue 116 110 Loss before income tax (414) (1,246)Income tax credit 40 145 Net loss for the year (374) (1,101) Assets by segment Year ended 31 December 2006 Year ended 31 December 2005 Asia EMEA North Total Asia EMEA North Total Pacific America Pacific America £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Segment assets 1,438 5,943 2,166 9,547 1,843 7,277 1,384 10,504Unallocated assets 4,964 3,086Total assets 14,511 13,590 Segment liabilities (342) (5,219) (1,536) (7,097) (621) (3,725) (1,584) (5,930) Unallocated liabilities (335) (101)Total liabilities (7,432) (6,031) Other segment Year ended 31 December 2006 Year ended 31 December 2005information Asia EMEA North Total Asia EMEA North Total Pacific America Pacific America £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Capital expenditure:Tangible assets 14 65 101 180 5 90 52 147Intangible assets 0 380 576 956 78 352 479 909 14 445 677 1,136 83 442 531 1,056 Depreciation 12 186 42 240 25 213 42 280Amortisation 15 185 13 213 7 84 0 91Impairment losses 0 28 0 28 0 215 0 215 Unallocated assets and liabilities comprise certain property, plant andequipment, cash and taxation. Secondary reporting format - Business segments The information previously reported in respect of the year ended 31 December2005 has been restated as detailed above. The following tables present revenue, expenditure and certain asset informationregarding the group's business segments for the years ended 31 December 2006 and2005 (as restated). Revenue by business segment 2006 2005 £'000 £'000 Real Time Financial Solutions 11,823 10,812Storage Solutions 2,699 3,170 14,522 13,982 Included in the Real Time Financial Solutions business segment is £3,411,000 ofrevenue in respect of the IT staff placement business (2005: £3,892,000). Other information Year ended 31 December 2006 Year ended 31 December 2005Assets by business segment Real Time Storage Total Real Time Storage Total Financial Financial Solutions Solutions £'000 £'000 £'000 £'000 £'000 £'000 Segment assets 7,849 1,698 9,547 9,402 1,102 10,504Unallocated assets 4,964 3,086 Total assets 14,511 13,590 Capital expenditure:Tangible assets 88 92 180 79 68 147Intangible assets 475 481 956 430 479 909 563 573 1,136 509 547 1,056 Unallocated assets and liabilities comprise certain property, plant andequipment, cash and taxation. 3 Loss per ordinary share Basic loss per share amounts are calculated by dividing net loss or profit forthe year attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year. Diluted loss per share amounts are calculated by dividing the net loss or profitattributable to ordinary equity holders of the parent by the weighted averagenumber of ordinary shares outstanding during the year plus the weighted averagenumber of ordinary shares that would be issued on the conversion of all thedilutive potential ordinary shares into ordinary shares except when suchdilutive instruments would reduce the loss per share. The following reflects the loss and share data used in the basic and dilutedloss per share computations: 2006 2005 £'000 £'000 Net loss attributable to equity holders of the parent (374) (1,101) 2006 2005 Basic weighted average number of shares 50,293,800 49,945,603Dilutive potential ordinary shares: Employee share options - - Diluted weighted average number of shares 50,293,800 49,945,603 Basic loss per share - pence (0.74) (2.20)Diluted loss per share - pence (0.74) (2.20) The employee share options are not dilutive because they would reduce the lossper share in both years. There have been no other transactions involving ordinary shares or potentialordinary shares between the reporting date and the date of completion of thesefinancial statements. 4 Dividends paid and proposed No dividends were declared or paid during the year and no dividends are proposedfor approval at the AGM (2005: None). 5 Reconciliation of movements in equity Share Share Other Currency Retained Total capital premium reserves translation earnings reserves £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2005 2,479 9,713 1,039 (29) (4,914) 8,288 Exchange differences on translation of foreign 0 0 0 0 0 0operationsShare based payment expense 0 0 0 0 42 42Issue of shares 34 306 0 0 0 340Share issue costs 0 (10) 0 0 0 (10)Attributable loss for the period 0 0 0 0 (1,101) (1,101) At 31 December 2005 2,513 10,009 1,039 (29) (5,973) 7,559 0Exchange differences on translation of foreign 0 0 0 (103) 0 (103)operationsShare based payment income 0 0 0 0 (36) (36)Issue of shares 5 28 0 0 0 33Share issue costs 0 0 0 0 0 0Attributable loss for the period 0 0 0 0 (374) (374) At 31 December 2006 2,518 10,037 1,039 (132) (6,383) 7,079 6 Change of arrangement with Cable & Wireless As a result of the new arrangement agreed with Cable & Wireless in April 2006, aone off payment of cash was made to Gresham by Cable & Wireless in the year. Inaddition, from April 2006 additional fixed quarterly payments are being made toGresham by Cable & Wireless. The initial one off payment is being deferred inthe balance sheet and released on a straight line basis to revenue over a periodof 3 years from May 2006 to match the cost of the additional obligations takenon by Gresham under this new agreement. The further fixed quarterly payments,which are paid in advance, are also being deferred in the balance sheet andreleased on a straight line basis to revenue over the quarters to which theyrelate. During the period, the revenue recognised in the income statement in respect ofthis arrangement totalled £916,000, with no impact on the comparative figures. The payments noted above led to an operating cash receipt during the period of£2.9m. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
GHT.L