6th Dec 2007 07:00
RDF Group PLC ("RDF" or "the Group") Interim Results RDF Group plc (AIM: RFG), the I.T. services group, with offices in Brighton,Bristol, Edinburgh and London, today announces its unaudited interim resultsfor the six months to 30 September 2007.
Key Points
* Group revenues increased 38% to ‚£14.735 million (2006: ‚£10.644 million)
* Operating profit before depreciation, amortisation of intangible assets and
exceptional items of ‚£0.336 million (2006: ‚£0.800 million) * Operating profit of ‚£0.136 million (2006: ‚£0.643m) * Profit before tax of ‚£0.044 million (2006: ‚£0.603 million) * Basic earnings per share of 0.19 pence (2006: 3.94 pence) * Following the acquisition of Aqua Resources Group Limited, the Group's
Temporary Staffing and Permanent Recruitment has performed well, increasing
income by 91% to ‚£7.775m (2006: ‚£4.080m)
* Profits before tax have fallen as a result of increased costs and reduced
margins required in order to build the Group's profile as a niche I.T.
services group
Commenting on the results, Chief Executive David Wood said:
"The performance of the IT Recruitment business has, as predicted, developedstrongly over the past six months. The need for investment in the ManagedSoftware business has, however, resulted in an overall reduction in the Group'sprofitability in the period compared to last year.
Subject to the continued uncertainty in the Financial Services sector, the Group expects to see an improvement in the results for the second half compared to the results for the period to 30 September 2007."
For further information, please contact:
RDF Group plc David Wood 01273 200100 Smith & Williamson Corporate Azhic Basirov/Siobhan 020 7131 4000 Finance Sergeant Editor's NotesFounded in 1994, RDF Group plc is a company dedicated to providing high qualitymanaged IT services and recruitment services to their growing portfolio of bothlocal businesses and blue chip clients. From a standing start, the companycurrently has a turnover in excess of ‚£22 million. RDF currently has a staff ofover 300 across the UK, including 120 in Brighton.RDF also provides IT recruitment services for high value contract and permanentstaff for clients. Clients include Northern Rock, National Australia Group, SkyTV and a large number of other blue chip companies, many of whom have beenclients of RDF for several years and have gradually increased the value oftheir contracts to substantial levels with the Group.
In 2006, RDF has opened new offices in Bristol and London, whilst investing further in their Head Office in Brighton and regional development centre in Livingston, near Edinburgh.
For further information on the RDF Group visit www.rdfgroup.com or telephone 01273 200100.
Chairman's StatementThe results for the six months to 30 September 2007 are mixed. The results ofthe Managed Software Development division mask the achievements in the strongresults of the Temporary Agency and Permanent Recruitment division which isable to grow and produce profits without significant additional investment andis now a core part of the business.
These figures are the first results to be prepared on the basis of International Financial Reporting Standards (IFRS). Reconciliations of prior periods' results and balance sheets under IFRS are presented in note 6.
Group income for the six months ended 30 September 2007 increased by 38% to
‚£14.735m (2006: ‚£10.644m) through a combination of organic growth and the acquisition of Aqua Resources Group which took place in January 2007. However, the Group's profit before tax has fallen to ‚£44,000 (2006: ‚£603,000).
Basic earnings per share fell to 0.19p (2006 restated: 3.94p) with a similar fall in the fully diluted earnings per share to 0.18p (2006 restated: 3.88p).
At the start of the period the Group had net debt of ‚£1.085m (2006: net funds ‚£246,000). As a result of the significant growth over the period the Group had net cash outflows of ‚£811,000 from operating activities (2006: net inflows ‚£680,000). Cash outflows from investing activities were ‚£140,000 (2006: ‚£221,000) and cash outflows from financing activities were ‚£134,000 (2006: ‚£68,000). As a result at the end of the period net debt had increased to ‚£2.114m(2006: net funds ‚£581,000).
Managed Software Development division
Income from managed services software development has increased slightly to
‚£6.960m (2006: ‚£6.564m) and accounts for 47% (2006: 62%) of total income.
Operating profit before depreciation and amortisation and exceptional items hasdeclined significantly to ‚£31,000 (2006: ‚£552,000) as a result of the increasedcosts in staff and infrastructure needed to support the demands of existing,new and prospective clients. Your Directors are reviewing the performance ofthe division in light of both the continued investment needed to ensure that itis adequately capitalised for growth and that it meets current and prospectivecustomer needs and the ongoing turmoil in the financial markets, in which itskey clients operate.
Temporary Agency Staff and Permanent Recruitment division
The division now accounts for 53% (2006: 38%) of the Group's income. Fees generated in the six months total ‚£7.775m (2006: ‚£4.080m) generating an operating profit before depreciation and amortisation and exceptional costs of ‚£494,000 (‚£426,000).
The division has secured a number of new customers in the period and is nowfocussing on improving margins and reducing cost levels. Over the past twelvemonths, the division has increased turnover to ‚£12.991m and continues to grow.This is an excellent result from a division which only two years ago had incomeof less than ‚£2m.
Current trading and future prospects
The first half of this year has seen the Group report a strong growth inturnover, mainly from the Temporary Agency and Permanent Recruitment division.The Board is focused on ensuring costs are kept under control and investing ininitiatives to continue to grow the businesses. It is important that theseinvestments continue to be directed towards the appropriate market sectors andthat the Group is offering services to fulfil the needs of these sectors. TheBoard has also been pursuing the identification and appointment of additionalnon executive directors and expects to make an appointment early in the newyear. The Board remains confident that the second half results will be animprovement on those of the first half.Jim CarrNon Executive Chairman5 December 2007
Independent Review Report to RDF Group plc
Introduction
We have been engaged by the Company to review the condensed set of financialstatements in the interim financial report for the six months ended 30September 2007 which comprises the Consolidated Income Statement, ConsolidatedBalance Sheet, Consolidated Cash Flow Statement, Consolidated Statement ofShareholders' Equity and the related explanatory notes. We have read the otherinformation contained in the interim financial report and considered whether itcontains any apparent misstatements or material inconsistencies with theinformation in the condensed set of financial statements.This report, including the conclusion, has been prepared for and only for theCompany for the purpose of meeting the requirements of the AIM Rules forCompanies and for no other purpose. We do not, therefore, in producing thisreport, accept or assume responsibility for any other purpose or to any otherperson to whom this report is shown or into whose hands it may come save whereexpressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim financial report, is the responsibility of, and has been approvedby the directors. The directors are responsible for preparing and presentingthe interim financial report in accordance with the AIM Rules for Companies.As disclosed in note 1, the annual financial statements of the Group areprepared in accordance with International Financial Reporting Standards andInternational Financial Reporting Interpretations Committee ("IFRIC")pronouncements as adopted by the European Union. The condensed set of financialstatements included in this interim financial report has been prepared inaccordance with the measurement and recognition criteria of InternationalFinancial Reporting Standards and International Financial ReportingInterpretations Committee ("IFRIC") pronouncements, as adopted by the EuropeanUnion.Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the interim financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with the measurement and recognition criteriaof International Financial Reporting Standards and International FinancialReporting Interpretations Committee ("IFRIC") pronouncements as adopted by theEuropean Union, and the AIM Rules for Companies.Baker Tilly UK Audit LLPChartered AccountantsInternational HouseQueens RoadBrightonBN1 3XE5 December 2007Consolidated Income StatementFor the six months ended 30 September 2007 (unaudited) Six months ended 30 Year ended September 31 March 2007 2006 2007 Note ‚£000 ‚£000 ‚£000 Revenue 2 14,735 10,644 22,227 Cost of sales (12,665) (8,521) (17,967) -------------------------------- Gross profit 2,070 2,123 4,260 Administrative expenses (1,734) (1,323) (2,755) -------------------------------- Operating profit before 2 336 800 1,505 depreciation, amortisation of intangible assets and exceptional items Depreciation (89) (44) (103) Amortisation of intangible fixed (111) - (87) assets Exceptional items - (113) (122) -------------------------------- Operating profit 136 643 1,193 Finance costs (93) (40) (89) Finance income 1 - 4 ------------------------------- Profit before tax 44 603 1,108 Income tax expense (24) (193) (362) ------------------------------- Profit for the period 20 410 746 attributable to equity =============================== shareholders Earnings per share 3 Pence Pence Pence Basic 0.19 3.94 7.17 =============================Diluted earnings per share 0.18 3.88 6.87 ============================= Consolidated Balance SheetAs at 30 September 2007 (unaudited) Six months ended 30 Year ended September 31 March 2007 2006 2007 ‚£000 ‚£000 ‚£000 ASSETS Non-current assets Intangible assets 838 - 949 Property, plant and equipment 491 426 440 Deferred tax asset - 12 - ----------------------------------- 1,329 438
1,389
===================================
Current assets Trade and other receivables 6,208 3,755 5,287 Cash and cash equivalents 40 581 44 ----------------------------------- 6,248 4,336
5,331
=================================== Total assets 7,577 4,774
6,720
=================================== LIABILITIES Current liabilitiesTrade and other payables 2,744 2,273 2,894 Current tax liabilities 344 292 336 Financial liabilities 2,114 - 1,034 ----------------------------------- 5,202 2,565 4,264 Non-current liabilities Financial liabilities 40 51 43 Deferred tax liabilities 14 - - ----------------------------------- 54 51
43
=================================== Total liabilities 5,256 2,616
4,307
=================================== Net assets 2,321 2,158
2,413
===================================
EQUITY Share capital 208 208 208 Share premium account 103 103 103 Equity option reserve 71 30 53 Retained earnings 1,939 1,817 2,049 ----------------------------------- Total equity 2,321 2,158
2,413
=================================== Consolidated Cash Flow StatementFor the six months ended 30 September 2007 (unaudited) Six months ended 30 Year September ended 31 March 2007 2006 2007 Note ‚£000 ‚£000 ‚£000 Cash flows from operating activities
Cash generated from operations 5 (717) 852
499 Net interest (paid)/received (92) (40) (85) Income tax paid (2) (132) (208) ------------------------------------ Net cash from operating (811) 680 206 activities Cash flows from investing activities Acquisition of subsidiaryundertakings net of cash and overdraft acquired - - (620)
Purchase of property plant, and equipment (140) (221) (338) Investment in intangible assets - -
(299)
------------------------------------ Net cash flows from investing (140) (221) (1,257) activities Cash flows from financing activities
Payment to cancel share options - (20)
(20) Finance leases advanced - 60 60 Repayment of finance leases (4) (4) (9) Equity dividend paid (130) (104) (208) ------------------------------------ Net cash outflow from financing (134) (68) (177) activities ------------------------------------ (Decrease)/ Increase in cash and (1,085) 391 (1,228) cash equivalents for the period ------------------------------------ Reconciliation of net cash flow to movement in net funds (Decrease) / increase in cash and (1,085) 391 (1,228) cash equivalents Decrease/ (Increase) in finance 4 (56) (51) leases ------------------------------------- Change in net funds (1,081) 335 (1,279) Net (debt)/ funds at 1 April (1,033) 246 246 ------------------------------------ Net (debt)/funds at 30 September (2,114) 581
(1,033)
==================================== Consolidated Statement of Shareholders EquityFor the six months ended 30 September 2007 (unaudited)Six months ended Share Share Equity Retained Total30 September 2007 Capital Premium Option earnings Reserve ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 At 1 April 2007 208 103 53 2,049 2,413 Share based payments - - 18 - 18 Profit for the period - - - 20 20 Dividend - - - (130) (130)
---------------------------------------------- At 30 September 2007 208 103 71 1,939
2,321
==============================================
Six months ended Share Share Equity Retained Total30 September 2006 Capital Premium Option earnings Reserve ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 At 1 April 2006 208 103 23 1,511 1,845 Share based payments - - 27 - 27 Share options lapsed or - - (20) - (20) exercised Profit for the period - - - 410 410 Dividend - - - (104) (104)
------------------------------------------------ At 30 September 2006 208 103 30 1,817
2,158
===============================================
Year ended Share Share Equity Retained Total31 March 2007 Capital Premium Option earnings Reserve ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 At 1 April 2006 208 103 23 1,511 1,845 Share based payments - - 50 - 50 Share options lapsed or - - (20) - (20) exercised Profit for the period - - - 746 746 Dividend - - - (208) (208)
--------------------------------------------- At 31 March 2007 208 103 53 2,049
2,413
=============================================
Notes to the Financial Statements
1. Basis of preparation
RDF Group plc is incorporated in England and domiciled in the United Kingdom.Its registered office is 2 Bartholomews, Brighton, BN1 1HG and its principalactivities are the provision of software solutions to companies, the provisionof contract staff and the sourcing of permanent staff in the InformationTechnology sectors. The financial statements are prepared in pounds sterling.The Group has historically prepared its audited financial statements andunaudited interim results on the basis of UK Generally Accepted AccountingPractice ("UK GAAP"). In the current year the Group has adopted InternationalFinancial Reporting Standards ("IFRS") for the first time as the Group isrequired to present its annual consolidated financial statements in accordancewith accounting standards adopted for use in the European Union. As a resultthese interim accounts, which are unaudited, have been prepared on the basis ofthe accounting policies which will apply for the financial year to 31 March2008. These standards remain subject to ongoing amendment and/or interpretationand are therefore still subject to change. Accordingly, information containedin these interim financial statements may need updating for subsequentamendments to IFRS required for first time adoption or for new standards issuedpost the balance sheet date. This document includes reconciliations of theGroup's equity to IFRS at the date of transition of 1 April 2006 and at thecomparative balance sheet dates of 30 September 2006 and 31 March 2007, andreconciliations of the Group's results for the comparative periods ended 30September 2006 and 31 March 2007.The comparative information for the six months ended 30 September 2006 and theyear ended 31 March 2007 have been restated on the basis of IFRS.Reconciliations between financial statements previously reported under UK GAAPand on the basis of IFRS are set out in note 6 to this interim statement inrespect of the Consolidated Income Statements for the year ended 31 March 2007and six months ended 30 September 2006 and Consolidated Balance Sheets as at 31March 2007.The interim financial statements do not include all of the information requiredfor full annual financial statements and do not comply with all therequirements of IAS 34 `Interim Financial Reporting'. Accordingly whilst theinterim financial statements have been prepared in accordance with thetransitional rules governing the move from UK GAAP to IFRS they cannot beconstrued as being in full compliance with IFRS.The interim financial statements are unaudited and were approved by the boardof directors on 6 December 2007. The financial information contained in thesestatements does not constitute statutory accounts as defined in Section 240 ofthe Companies Act 1985. The financial information for the year to 31 March 2007has been extracted from the statutory accounts for that year and adjusted forthe conversion to IFRS. The statutory accounts for the year ended 31 March2007, which were prepared under UK GAAP, received an unqualified audit reportand did not contain a statement made under Section 237(2) and (3) of theCompanies Act 1985, and have been filed with the Registrar of Companies.Following the implementation of IFRS, the Group's accounting policies have beenconsistently applied to all the periods presented unless otherwise stated. Theprincipal policies are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements ofRDF Group plc and of its subsidiaries. Subsidiaries are all entities over whichthe Group has the power to govern financial and operating policies, generallyaccompanying a shareholding of more than one half of the voting rights.Subsidiaries are fully consolidated from the date on which the Group takescontrol of a subsidiary.The Group adopts the purchase method in accounting for the acquisition ofsubsidiaries. On acquisition the cost is measured at the fair value of theassets given, plus equity instruments issued and liabilities incurred orassumed at the date of exchange plus any costs directly attributable to theacquisition. The assets acquired and liabilities and contingent liabilitiesassumed in a business combination are measured at their fair value at the dateof acquisition. Any excess of the fair value of the consideration over the fairvalue of the identifiable net assets acquired is recorded as goodwill. Anydeficiency of the fair value of the consideration below the fair value ofidentifiable net assets acquired is credited to the Income Statement in theperiod of the acquisition.The results of subsidiary undertakings acquired or disposed of during the yearare included in the Consolidated Income Statement from the effective date ofacquisition or up to the effective date of disposal.Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe Group. Inter-company transactions and balances between Group companies
areeliminated.Segmental reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments.
Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that arebelieved to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. Whilst thedirectors believe that the estimates and assumptions used in the preparation ofthe interim financial statements are reasonable, the resulting accountingestimates will, by definition, seldom equal the related actual results. Theestimates that have a significant risk of causing a material adjustment to thecarrying values of assets and liabilities within the next financial year arediscussed below. i. Impairment of goodwill
The Group tests annually whether the goodwill has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations which require the use of estimates.
ii. Customer contracts and relationships
Similarly the computation of the fair value of customer contracts and relationships acquired is based on an estimate of future cash flows arising from those existing customers.
Revenue recognition
The income shown in the Consolidated Income Statement represents the value ofservices provided during the period, exclusive of Value Added Tax. Income isrecognised when the risks and rewards of the underlying services have beensubstantially transferred to the customer.
Exceptional items
Items which are non-recurring and sufficiently material are presented separately within their relevant Consolidated Income Statement category. The separate reporting helps provide a better understanding of the Group's underlying business performance.
Property, plant and equipment
Depreciation is calculated to write down the cost less estimated residual valueof all tangible fixed assets by equal annual instalments over their expecteduseful lives. The rates generally applicable are:
Computer equipment and software 33% per annum
Office equipment 10% per annum
Motor vehicles 33% per annum
Leasehold property improvements Over the lease term
Intangible assets
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the company's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is included in intangible assets and is tested annually for impairment. Any impairment is recognised immediately in the Income Statement and is not subsequently reversed.
Computer software
Costs associated with the production of identifiable and unique software products, including the payroll costs of the development teams, are recognised as intangible assets when they meet the following criteria:
i. the technical feasibility of the product can be demonstrated
ii. it is probable that the product will generate future economic benefit
iii. the costs of the product can be reliably measured
iv. the Group has the necessary resources available to complete the development
of the product
Computer software development costs capitalised as assets are amortised over their expected useful lives of 2 years.
Customer contracts and customer relationships
Customer contracts and customer relationships acquired with subsidiaries are recognised at their fair value at the date of acquisition. The value is amortised over a period not exceeding ten years.
Impairment of intangible assets and property, plant and equipment
Intangible assets that have an indefinite life and are not subject toamortisation are tested annually for impairment. Other property, plant andequipment and intangible assets that are subject to amortisation ordepreciation are tested for impairment whenever events or changes incircumstances indicate that the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which the asset's carryingamount exceeds its recoverable amount. Any impairment losses are charged to theIncome Statement in the period in which they are identified. Where an assetdoes not generate cash flows that are independent of other assets, the assetsare allocated to cash-generating units and the Group tests the recoverableamount of the cash-generating unit to which the asset belongs.
Employee benefits
Pensions
Pension contributions are made for a number of directors and employees on a defined contribution basis. Contributions payable for the year are charged in the Income Statement. The Group has no further payment obligations once the contributions have been paid.
Share based payments
The Group operates a number of share option schemes which allow employees to acquire shares in the company. Where the company awards share options under these schemes, the fair value of options granted is calculated at the grant date using the Black Scholes Model and the resulting cost is charged to the Income Statement over the vesting period during which the recipient becomes unconditionally entitled to exercise the option and credited to the Equity Option Reserve.
Taxation
Income tax expense represents the aggregate of the current tax and deferred taxcharges. The current tax charge is based on taxable profit for the period.Taxable profit differs from profit before tax as reported in the IncomeStatement as it excludes items of income or expense that are taxable ordeductible in other years or are never taxable or deductible. The Group'sliability for current tax is calculated using tax rates that have been enactedor substantively enacted by the balance sheet date.Deferred taxation is provided in full using the liability method on temporarydifferences between the tax bases of assets and liabilities and their carryingamounts in the consolidated financial statements. Deferred tax is determinedusing tax rates that have been enacted at or substantively enacted by thebalance sheet date and are expected to apply when the related deferred taxasset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
LeasesWhere an asset is acquired under a finance lease, the asset is capitalised andthe corresponding liability to the finance company is included in creditors.Depreciation on assets held under finance leases is provided in accordance withthe policy noted under property, plant and equipment above. Finance leasepayments are treated as consisting of capital and interest elements and theinterest is charged to the Income Statement on a geometric basis over theperiod of the agreement.
Rentals payable under operating leases are charged to the Income Statement on a straight line basis over the period of the lease.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call withbanks, other short term highly liquid funds with original maturities of threemonths or less and bank overdrafts. Bank overdrafts are shown within borrowingin current liabilities on the balance sheet.
Financial instruments
Financial assets and liabilities are recognised in the balance sheet when the Group becomes party to the contractual provisions of the instrument.
Trade and other receivables
Trade and other receivables are measured at cost less any provision necessarywhen there is objective evidence that the Group will not be able to collect allamounts due. They are non interest bearing and are initially recognised at fairvalue and subsequently at amortised cost using the effective interest ratemethod.
Trade and other payables
Trade and other payables are not interest bearing and are measured at original invoice amount.
2. Segmental Review i) Primary business segmentSegmental information is presented in respect of the Group's business segments.The primary business segments are based on the Group's reporting structure andcomprises of Managed Software Solutions and Temporary Agency Staffing andPermanent Recruitment Fees.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate and head office expenses.
The Group's operating units do not operate as separate business units. Thesegmental reporting of revenue and operating profit before depreciation and theamortisation of intangible assets and exceptional costs has been prepared inorder to provide a better understanding of the Group's performance and is not afull segmental report. The assets and liabilities of the Group are centrallymanaged, and therefore it is not possible to allocate them to the business
segments. Six months ended 30 September Year ended 31 March 2007 2006 2007 ‚£000 ‚£000 ‚£000 RevenueManaged Software Developments 6,960 6,564 12,931 Temporary Agency Staffing and Permanent Recruitment Fees 7,775 4,080 9,296 ------------------------------------ 14,735 10,644
22,227
====================================
Operating profit before depreciation and the amortisation of intangible
assets and exceptional costs Managed Software Developments 31 552 927 Temporary Agency Staffing and Permanent Recruitment Fees 494 426 917 Software and other sales Central departments (189) (178) (339) ------------------------------------- 336 800
1,505
=====================================
ii. Secondary business segment
All of the Group's activities take place in the United Kingdom for clients located in the United Kingdom.
3. Earnings per share
The basic earnings per share is based on attributable profit for the period of‚£20,000 (September 2006: ‚£410,000; year ended 31 March 2007: ‚£746,000) and on10,400,000 ordinary shares (September 2006: 10,400,000; year ended 31 March2007: 10,400,000) being the weighted average number of ordinary shares in issueduring the periods.The diluted earnings per share is based on attributable profit for the periodof ‚£20,000 (September 2006: ‚£410,000; year ended 31 March 2007: ‚£746,000) and on 10,782,508 ordinary shares (September 2006: 10,553,664; yearended 31 March 2007: 10,864,537), calculated as follows: Six months ended Year ended 30 September 30 March 2007 2006 2007 No. No. No.
Basic weighted average number of shares 10,400,000 10,400,000 10,400,000 Dilutive potential ordinary shares:
Share options 382,508 153,664
464,537
------------------------------------ 10,782,508 10,553,664
10,864,537
====================================
4. Dividend Six months ended Year ended 30 September 30 March 2007 2006 2007 ‚£000 ‚£000 ‚£000
Dividends paid to equity shareholders Interim 1.25 per share (2006: 1.0p) 0 0
104
Final 1.25p per share (2006: 1.0p) 130 104
104
------------------------------ 130 104
208
==============================
5. Reconciliation of operating profit to net cash generated from operatingactivities Six months ended Year ended 30 September 30 March 2007 2006 2007 ‚£000 ‚£000 ‚£000 Operating profit 136 643 1,193
Depreciation of property, plant and 89 44
103
equipment Amortisation of intangible assets 111 -
87
Share based payment expense 18 27
50
(Increase)/decrease in receivables (921) 530
(370)
(Decrease)/increase in payables (150) (392)
(564)
------------------------------- Cash (used)/generated by operations (717) 852
499
===============================
6. Principal impact of IFRS
The key differences between UK GAAP and IFRS that will impact the Group are set out below.
The rules for the first time adoption of IFRS are set out in IFRS1 `First TimeAdoption of International Financial Reporting Standards'. The rules state thata company should use the same accounting policies in its opening IFRS balancesheet and throughout all periods presented in its first IFRS financialstatements.
Goodwill
Under UK GAAP, the Group was amortising goodwill arising on acquisitions overperiods of 10 years. Under IFRS 3 `Business combinations', goodwill is notamortised but instead is subject to annual impairment tests or more frequentlyif there is an indication of impairment.
Reconciliations
The following pages show the reconciliation of Profit under UK GAAP to Profitunder IFRS for the year ended 31 March 2007 and Equity under UK GAAP to Equityunder IFRS at 31 March 2007.Reconciliation of Profit from UK GAAP to IFRS (unaudited)
Year ended 31 March 2007 Under UK Effect of Under IFRS GAAP transition to IFRS ‚£000 ‚£000 ‚£000 Revenue 22,227 - 22,227 Cost of sales (17,967) - (17,967) ---------------------------------- Gross profit 4,260 - 4,260 Administrative expenses (2,755) - (2,755) ---------------------------------- Operating profit before depreciation, 1,505 - 1,505 the amortisation of intangible assets
and exceptional items Depreciation of fixed assets (103) (103)
Amortisation of intangible fixed assets (75) (12) (87) Amortisation of goodwill on acquisition (12) 12 - Exceptional items (122) -
(122)
---------------------------------- Operating profit 1,193 - 1,193 Finance costs (89) - (89) Finance income 4 - 4 ---------------------------------- Profit on ordinary activities before tax 1,108 - 1,108 Tax on profit on ordinary activities (362) -
(362)
---------------------------------- Profit for the financial period 746 -
746
================================== Profit under UK GAAP
746
Amortisation of capitalised client
12 relationships Amortisation of goodwill (12) ---------------------------------- Profit under IFRS
746
================================== Earnings per share Basic 7.17p ================================== Diluted earnings per share
6.87p
==================================
There were no effects of the transition to IFRS on the income statements for the period ended 30 September 2006
Reconciliation of Equity at 31 March 2007 (unaudited)
As at 31 March 2007 Under UK Transition to Under IFRS GAAP IFRS ‚£000 ‚£000 ‚£000 ASSETS Non-current assets Intangible fixed assets 225 724 949 Goodwill 724 (724) -
Property, plant and equipment 440 - 440 Deferred tax assets -------------------------------------- 1,389 -
1,389
======================================
Current assets Trade and other receivables 5,287 - 5,287 Cash and cash equivalents 44 - 44
--------------------------------------- 5,331 -
5,331
======================================= Total assets 6,720 -
6,720
=======================================
LIABILITIES Current liabilities Trade and other payables 2,894 - 2,894 Current tax liabilities 336 - 336 Financial liabilities 1,034 - 1,034
--------------------------------------- 4,264 -
4,264
=======================================
Non-current liabilities Financial liabilities 43 - 43
======================================= Total liabilities 4,307 -
4,307
======================================= Net assets 2,413 -
2,413
=======================================
EQUITY Share capital 208 - 208 Share premium account 103 - 103 Equity option reserve 53 - 53 Retained earnings 2,049 2,049
--------------------------------------- Total equity 2,413 -
2,413
=======================================
There were no effects of the transition to IFRS on the balance sheet or equity at 1 April 2006 or 30 September 2006
Reconciliation of Cash Flows from UK GAAP to IFRS (unaudited)
There are no changes to the Group's cash flows as a result of the impact of the change from UK GAAP to IFRS
RDF GROUP PLCRelated Shares:
Roebuck Food