24th Sep 2008 07:00
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Press release |
24 September 2008 |
MOTIVCOM PLC ("THE COMPANY" or "THE GROUP")
INTERIM RESULTS
FOR THE SIX MONTHS TO 30 JUNE 2008
Motivcom plc (AIM:MCM), a leading provider of a range of business services to assist major blue chip corporate clients to win and retain customers whilst incentivising and retaining employees, is pleased to announce its unaudited interim results for the six months to 30 June 2008.
Financial Highlights
|
• |
Gross profit increased by 75% to £12,247,000 (2007: £7,014,000) |
|
• |
Headline operating profit* increased by 73% to £2,049,000 (2007: £1,182,000) |
|
• |
Operating profit increased by 42% to £1,661,000 (2007: £1,173,000) |
|
• |
Headline profit before tax† increased by 42% to £1,767,000 (2007: £1,242,000) |
|
• |
Profit before tax increased by 12% to £1,379,000 (2007: £1,233,000) |
|
• |
Headline basic earnings per share‡ increased by 16% to 4.09 pence (2007: 3.53 pence) |
|
• |
Basic earnings per share decreased by 9% to 3.17 pence (2007: 3.49 pence) |
|
• |
Interim dividend increased by 60% to 0.80 pence (2007: 0.50 pence) |
|
• |
Continuing successful new product development |
* Operating profit of £1,661,000 (2007: £1,173,000) plus amortisation of intangibles of £388,000 (2007: £9,000)
† Profit before tax of £1,379,000 (2007: £1,233,000) plus amortisation of intangibles of £388,000 (2007: £9,000)
‡ See reconciliation in note 5
Commenting on the results, Colin Lloyd, Chairman of Motivcom plc, said:
"These are encouraging results as we endeavour to maintain the consistent year-on-year growth of our operating profit, which has exceeded a compound rate of 30% for the past five years. With increased levels of profit and good cash reserves, we are pleased to be able to offer the improved dividend announced today and aim to continue our progressive dividend policy. These results reinforce our belief that many areas of the Group are suited to the current economic climate giving us prudent optimism in our forward prospects."
For further information please contact:
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Motivcom plc |
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Sue Hocken |
Tel: +44 (0) 1908 608 000 |
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www.motivcom.com |
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Grant Thornton UK LLP |
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Philip Secrett |
Tel: +44 (0)207 383 5100 |
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www.gtuk.com |
Media enquiries:
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Abchurch Communications |
Tel: +44 (0) 20 7398 7700 |
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Heather Salmond / Jack Ballantyne |
Tel: +44 (0) 20 7398 7714 |
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www.abchurch-group.com |
CHAIRMAN'S STATEMENT
I am pleased to report that the interim results for Motivcom plc for the six-month period to June 2008 are in line with market expectations reflecting a combination of organic growth and consolidation which currently characterises the sector, together with the success from new products recently developed and launched by Motivcom.
Financial update
The results for the six month period show that headline operating profit has increased by 73% to £2,049,000 (2007: £1,182,000) on gross profit that has increased by 75% to £12,247,000 (2007: £7,014,000). Headline profit before tax increased by 42% to £1,767,000 (2007: £1,242,000) and headline basic earnings per share increased by 16% to 4.09 pence (2007: 3.53 pence). Net assets increased to £17,337,000 from £16,707,000 at 31 December 2007, providing the Group with continued scope to make appropriate investments to further its development.
The Board has approved an interim dividend of 0.80 pence per ordinary share, an increase of 60% (2007: 0.50 pence per share). This will be paid on 31 October 2008 to all shareholders on the register at close of business on 3 October 2008.
Trading update
As I reported in my last statement to shareholders following our results for the financial year for 2007, the Group made three important acquisitions towards the end of the year. These acquisitions have been integrated into the Group structure and are currently operating to expectations. In the case of Motivation Travel Management, this acquisition has been merged with our Archer Young subsidiary to form AYMTM, in turn creating a significant company in the events and motivation sector. AYMTM has exceeded our expectations and is making a valuable contribution to the Group's results. Protravel, acquired in November 2008, has been fully integrated into the Group's sales promotion and employee benefits division. The integration has removed substantial duplicate costs, which has and will enhance profitability. The acquisition of the Zibrant group of companies in November 2007, our largest acquisition to date, has created significant Group client opportunities and integration efficiencies. Zibrant had a dedicated motivation division that has now been incorporated into the P&MM motivation division in Milton Keynes.
As a result of organic growth, acquisitions and new products, the Group has an extensive portfolio of blue chip clients. Motivcom, in some capacity, acts for some 30% of the FTSE 100 companies and 15% of the Fortune 500 companies.
Following our acquisitions last year we have used the first half of this financial year as a period of integration. As I reported in my statement six months ago we now have an excellent opportunity to cross-fertilise business across our clients. As 85% of our clients currently only buy one service from us and a further 8% only two services, there are significant revenue opportunities ahead. To this end we have initiated activity to introduce our clients to more services and I am delighted that this is already showing results. As there is much to achieve in this area, we are taking a view that for the time being we will only consider acquisitions that are opportunistic or small "bolt-on"s. For a group our size with net debt at £1.9 million and overdraft facilities of £2.4 million we are ideally placed to take advantage of such opportunities should they arise.
I would now like to report in more detail on the activities in each of the Group divisions:
Meetings and Events Division
The successful integration of Zibrant and Motivation Travel Management has continued into 2008 with the centralisation of many support services, product procurement, and specialist delivery services, such as aviation, hotel procurement, audio visual, media design and communications. We have reviewed all the distinct digital and live communications offerings within our businesses to provide a more integrated solution and expect to see significant benefit in these areas moving into 2009.
In 2008 the wider economic slowdown has meant that the Meetings, Incentives, Conferences and Events (MICE) industry has experienced market changes. We have maintained our position as a significant and stable force in this sector and benefited from client and market consolidation. I am pleased to report that our MICE business has undertaken a significant review of its marketing strategy and taken action to protect existing and grow future profitability. Resources have been directed toward growing the client base and increasing client penetration with excellent successes. We have secured many new clients including major FTSE financial, telecommunications, business services and energy clients. As a result, I can report that we have more clients buying a more diverse range of services and, therefore, excellent prospects going into 2009.
Sales Promotion and Employee Benefits
Employee Benefits
This division has had a record number of client wins, with 22 new clients secured for the Greentravel2work product launched last year. Client retention across our various products exceeds 90% and trading-up opportunities are occurring. 76 new client programmes, benefiting 200,000 employees, have begun in this period.
Sales Promotion
Many of the products developed in recent years are achieving success across a wide range of clients and industries. Our latest Filmology Cinema Promotion product has seen a 40% increase in bulk ticket sales across all major cinema groups and we have recently begun to penetrate the film distributor market. New products in the sector are being developed.
Fotorama has celebrated a quarter of a century at the forefront of the fixed free promotion business in the UK. The number of client wins was similar to 2007 but many of these wins were for larger contacts. Client enquiries for 2009 are also significantly higher than in previous years.
The Travel and Leisure Promotion business has successfully integrated the Protravel acquisition made at the end of 2007 with the cost savings identified prior to the acquisition materialising. As a promotion technique Travel and Leisure Promotions do somewhat better in an economic downturn as winning travel prizes becomes an antidote to more pressured household budgets and this area of our business is reflecting this. This should, however, be balanced with longer client decision times, again, in view of the business climate.
'Entice' the division's affinity product has again generated significant wins, building on last year's launch. It enjoys a 100% retention rate and is continuing to sell more products to its existing client base
Summersault, the Group's employee communications subsidiary, has enjoyed a number of high profile business wins. Client retention is very positive and the client pipeline is healthy, however, this should be somewhat balanced with pricing pressures and clients seeking greater value. Of particular interest the company has developed a specialism within the rail operator industry where it has won three new clients with more in prospect.
Motivation Division
The motivation division has seen a solid first half to 2008 and has been able to respond well to market demands. Two key market developments have driven a number of new client wins and subsequent growth. The first of these is the inevitable consolidation of spend within UK blue chip companies. The size and stature of Motivcom combined with its buying power in the retail voucher arena has allowed us to secure a steady stream of new clients seeking cost reductions from a previous model of non-centralised procurement. Voucher volumes are up 15% on 2007. Whilst this has also resulted in margin pressure from existing clients our retention has been excellent and the net effect positive.
The second market development has been the demand from UK businesses for value added services that will help stretch their employees' pay packets. Businesses are under pressure on pay increases and fear this may disenfranchise their high performing employees. Employee recognition programmes, flex vouchers (where retail discounts are passed on to employees) and the divisions new 'SpreeFlex' pre-paid card, which also provides retail savings, have proven to be popular options and have resulted in some significant new business wins that will contribute in the second half of the year and into 2009.
The integration of the Zibrant motivation division into the P&MM business was successfully completed by the end of May and the one off costs of this exercise are accounted for within the first half of 2008. The team is now well established in Milton Keynes, and the synergies are evidenced by a number of high profile new client gains.
Conclusion
The Group continues to meet its strategic objectives and has welcomed many new clients and staff in what we recognise as an uncertain macro-economic climate. However, we are cautiously optimistic about our forward prospects, with many areas of the Group particularly suited to these current conditions. Some of our services are designed to cut costs for our clients, incurred from unnecessary absenteeism and poor employee retention, whilst others drive staff productivity and sales leading to top-line growth. However, in certain sectors the client decision making process is taking longer and there will inevitably be some margin pressure. My experience suggests that these economic cycles (and this will be my sixth) follow a similar pattern. If history repeats itself, the forward prospects for our Group are encouraging. Whatever the outlook, our clients will retain the need to market their products, their staff will need to be motivated to achieve and their consumers will still make purchases. As market leaders in many of the areas in which we operate and employing nearly 500 of the sector's best professionals, we are well positioned to maximise the short and long term market potential.
Colin Lloyd
Chairman
CONSOLIDATED INTERIM INCOME STATEMENT (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2008
|
6 months ended 30 June 2008 |
6 months ended 30 June 2007 |
12 months ended 31 December 2007 |
||
|
Note |
£000 |
£000 |
£000 |
|
|
Sales |
3 |
55,874 |
38,721 |
85,704 |
|
Cost of sales |
(43,627) |
(31,707) |
(68,787) |
|
|
Gross profit |
12,247 |
7,014 |
16,917 |
|
|
Administrative expenses |
(10,586) |
(5,841) |
(13,651) |
|
|
Operating profit |
3 |
1,661 |
1,173 |
3,266 |
|
Finance costs - net |
(282) |
60 |
45 |
|
|
Profit before income tax |
1,379 |
1,233 |
3,311 |
|
|
Income tax expense |
4 |
(399) |
(349) |
(981) |
|
Profit for the period |
8 |
980 |
884 |
2,330 |
|
Attributable to: |
||||
|
Equity holders of the Company |
980 |
884 |
2,330 |
|
|
Earnings per share for profit attributable to the equity holders of the Company during the year (expressed in pence) |
||||
|
- basic |
5 |
3.17 |
3.49 |
8.90 |
|
- diluted |
5 |
3.12 |
3.39 |
8.63 |
There are no gains and losses other than the profit for the period.
The accompanying accounting policies and notes form part of these financial statements
CONSOLIDATED INTERIM BALANCE SHEET (UNAUDITED)
AT 30 JUNE 2008
|
|
As restated (see note 7) |
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|
Note |
At 30 June 2008 £000 |
At 30 June 2007 £000 |
At 31 December 2007 £000 |
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|
ASSETS |
||||
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Non-current assets |
||||
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Property, plant and equipment |
4,341 |
405 |
4,430 |
|
|
Intangible assets |
21,615 |
5,238 |
21,978 |
|
|
Deferred income tax assets |
28 |
388 |
28 |
|
|
25,984 |
6,031 |
26,436 |
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|
Current assets |
||||
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Inventories |
1,059 |
730 |
937 |
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|
Trade and other receivables |
21,600 |
12,229 |
21,276 |
|
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Cash and cash equivalents |
6,562 |
5,052 |
7,294 |
|
|
29,221 |
18,011 |
29,507 |
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|
Non-current assets classified as held for sale |
||||
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Property, plant and equipment |
800 |
- |
800 |
|
|
Total assets |
56,005 |
24,042 |
56,743 |
|
|
EQUITY |
||||
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Capital and reserves attributable to the Company's equity holders |
||||
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Share capital |
155 |
128 |
154 |
|
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Share premium account |
9,900 |
3,152 |
9,769 |
|
|
Other reserves |
75 |
75 |
75 |
|
|
Retained earnings |
7,207 |
5,493 |
6,709 |
|
|
Total equity |
8 |
17,337 |
8,848 |
16,707 |
|
LIABILITIES |
||||
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Non-current liabilities |
||||
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Borrowings |
7,535 |
- |
7,981 |
|
|
Deferred income tax liabilities |
657 |
- |
750 |
|
|
8,192 |
- |
8,731 |
||
|
Current liabilities |
||||
|
Provisions |
- |
- |
360 |
|
|
Trade and other payables |
28,963 |
14,626 |
29,434 |
|
|
Current income tax liabilities |
573 |
385 |
548 |
|
|
Obligations under finance leases |
3 |
- |
10 |
|
|
Borrowings |
937 |
183 |
953 |
|
|
30,476 |
15,194 |
31,305 |
||
|
Total liabilities |
38,668 |
15,194 |
40,036 |
|
|
Total equity and liabilities |
56,005 |
24,042 |
56,743 |
The accompanying accounting policies and notes form part of these financial statements.
CONSOLIDATED INTERIM CASHFLOW STATEMENT (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2008
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
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|
Cash flows from operating activities |
||||
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Cash generated from/(used in) operations |
1,052 |
(2,040) |
3,088 |
|
|
Interest paid |
(346) |
(15) |
(144) |
|
|
Income tax paid |
(502) |
(432) |
(917) |
|
|
Net cash generated from/(used) in operating activities |
204 |
(2,487) |
2,027 |
|
|
Cash flows from investing activities |
||||
|
Acquisition of subsidiary, net of cash acquired and dividends due to former shareholders |
(25) |
- |
(16,303) |
|
|
Purchases of property, plant and equipment (PPE) |
(186) |
(126) |
(409) |
|
|
Proceeds from sale of PPE |
11 |
- |
- |
|
|
Interest received |
100 |
125 |
293 |
|
|
Net cash used in investing activities |
(100) |
(1) |
(16,419) |
|
|
Cash flows from financing activities |
||||
|
Proceeds from issue of shares |
132 |
272 |
6,190 |
|
|
Receipts from loans |
- |
- |
8,650 |
|
|
Repayments of borrowings |
(505) |
(260) |
(554) |
|
|
Dividends paid |
(463) |
(226) |
(354) |
|
|
Net cash (used in)/generated from financing activities |
(836) |
(214) |
13,932 |
|
|
Net decrease in cash |
(732) |
(2,702) |
(460) |
|
|
Cash at beginning of period |
7,294 |
7,754 |
7,754 |
|
|
Cash at end of period |
6,562 |
5,052 |
7,294 |
Cash generated from operations
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
||
|
Profit before income tax |
1,379 |
1,233 |
3,311 |
|
|
Adjustments for: |
||||
|
- depreciation |
263 |
88 |
239 |
|
|
- net interest payable/(receivable) |
282 |
(60) |
(45) |
|
|
- share based payments |
17 |
17 |
35 |
|
|
- loss on disposal of fixed assets |
1 |
- |
6 |
|
|
- amortisation of intangibles |
388 |
9 |
39 |
|
|
Changes in working capital (excluding the effects of acquisitions and exchange differences on consolidation): |
||||
|
- inventories |
(123) |
46 |
(161) |
|
|
- trade and other receivables |
(324) |
1,974 |
2,126 |
|
|
- trade and other payables |
(831) |
(5,347) |
(2,462) |
|
|
Cash generated from/(used in) operations |
1,052 |
(2,040) |
3,088 |
The accompanying accounting policies and notes form part of these financial statements.
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2008
1 General information
Motivcom plc ("the Company") and its subsidiaries (together "Motivcom plc" or "the Group") are involved in (1) the development and administration of third party motivation and incentive programmes (2) the provision of incentive travel, live events and venue finding and (3) the provision of trade and consumer sales promotions and employee benefits products.
The Company is a limited liability company incorporated and domiciled in England. The address of its registered office is Rockingham Drive, Linford Wood, Milton Keynes MK14 6LY.
The Company has its primary and only listing on the AIM market of London Stock Exchange plc.
These consolidated interim financial statements have been approved for issue by the Board of Directors on 24 September 2008.
2 Basis of preparation
These condensed consolidated interim financial statements of Motivcom plc are for the six months ended 30 June 2008. They have been prepared under the historical cost basis and in accordance with International Accounting Standard 34 Interim Financial Reporting. The above financial information does not constitute statutory accounts within the meaning of Section 240, Companies Act 1985 and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2007.
These interim consolidated financial statements have been prepared on the basis of the Group's accounting policies. These are set out in its Annual Report and Accounts for the year ended 31 December 2007 which is available on the Group's website (www.motivcom.com). As of 1 January 2008 various new standards and interpretations apply to financial statements prepared in accordance with IFRS. However, none apply to the Group.
3 Segment Information
At 30 June 2008, the Group is organised into three main business segments - (1) development and administration of third party motivation and incentive programmes ("Motivation") - (2) the provision of incentive travel, live events and venue finding ("Events") - (3) trade and consumer sales promotions and employee benefit products ("Promotions"). Unallocated costs represent corporate expenses.
The segment results for the six months ended 30 June 2008 are as follows:
|
Motivation £000 |
Events £000 |
Promotions £000 |
Unallocated £000 |
Group £000 |
|
|
Total gross segment sales |
17,968 |
26,829 |
11,077 |
- |
55,874 |
|
Operating profit/(loss) |
250 |
1,104 |
451 |
(144) |
1,661 |
|
Finance costs - net |
(282) |
||||
|
Profit before income tax |
1,379 |
||||
|
Income tax expense |
(399) |
||||
|
Profit for the period |
980 |
The segment results for the six months ended 30 June 2007 are as follows:
|
Motivation £000 |
Events £000 |
Promotions £000 |
Unallocated £000 |
Group £000 |
|
|
Total gross segment sales |
19,164 |
11,689 |
7,868 |
- |
38,721 |
|
Operating profit/(loss) |
277 |
810 |
267 |
(181) |
1,173 |
|
Finance costs - net |
60 |
||||
|
Profit before income tax |
1,233 |
||||
|
Income tax expense |
(349) |
||||
|
Profit for the period |
884 |
The segment results for the year ended 31 December 2007 are as follows:
|
Motivation £000 |
Events £000 |
Promotions £000 |
Unallocated £000 |
Group £000 |
|
|
Total gross segment sales |
42,339 |
26,051 |
17,314 |
- |
85,704 |
|
Operating profit/(loss) |
951 |
1,147 |
1,436 |
(268) |
3,266 |
|
Finance costs - net |
45 |
||||
|
Profit before income tax |
3,311 |
||||
|
Income tax expense |
(981) |
||||
|
Profit for the period |
2,330 |
4 Income tax expenses
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
|
|
Current tax |
527 |
394 |
1,019 |
|
Overprovision of tax for prior year |
- |
(17) |
(17) |
|
Deferred tax |
(128) |
(28) |
(31) |
|
Change in rate of provision of deferred tax |
- |
- |
10 |
|
399 |
349 |
981 |
5 Earnings per share and dividends
Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
|
|
Profit attributable to equity holders of the Company |
980 |
884 |
2,330 |
|
Weighted average number of ordinary shares in issue (thousands) |
30,872 |
25,312 |
26,185 |
|
Basic earnings per share in pence |
3.17 |
3.49 |
8.90 |
Diluted
Diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all contracted dilutive potential ordinary shares. The Company has only one category of dilutive potential ordinary shares, share options.
The calculation is performed for the share options to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options and taking account of the yet unexpensed share based payment charge relating to those options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. Tranches two to four of the options granted to C T Lloyd have been excluded from this calculation as all the conditions attaching to the proposed options had not been met at 30 June 2008.
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
|
|
Profit attributable to equity holders of the Company |
980 |
884 |
2,330 |
|
Weighted average number of ordinary shares in issue (thousands) |
30,872 |
25,312 |
26,185 |
|
Adjustment for share options (thousands) |
527 |
754 |
818 |
|
Weighted average number of ordinary shares for diluted earnings per share (thousands) |
31,399 |
26,066 |
27,003 |
|
Diluted earnings per share in pence |
3.12 |
3.39 |
8.63 |
Headline basic
Headline basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company plus the amortisation of intangible assets by the weighted average number of ordinary shares in issue during the period.
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
|
|
Profit attributable to equity holders of the Company |
980 282 |
884 9 |
2,330 33 |
|
Amortisation of intangibles (after deduction of tax) |
|||
|
Headline profit attributable to equity holders of the |
|||
|
Company |
1,262 |
893 |
2,363 |
|
Weighted average number of ordinary shares in issue (thousands) |
30,872 |
25,312 |
26,185 |
|
Headline basic earnings per share in pence |
4.09 |
3.53 |
9.02 |
Headline diluted
Headline diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all contracted dilutive potential ordinary shares. The profit is also adjusted to exclude the effects of amortisation of intangible assets. The Company has only one category of dilutive potential ordinary shares, share options.
The calculation is performed for the share options to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options and taking account of the yet unexpensed share based payment charge relating to those options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. Tranches two to four of the options granted to C T Lloyd have been excluded from this calculation as all the conditions attaching to the proposed options had not been met at 30 June 2008.
|
6 months ended 30 June 2008 £000 |
6 months ended 30 June 2007 £000 |
12 months ended 31 December 2007 £000 |
|
|
Profit attributable to equity holders of the Company |
980 282 |
884 9 |
2,330 33 |
|
Amortisation of intangibles (after deduction of tax) |
|||
|
Headline profit attributable to equity holders of the |
|||
|
Company |
1,262 |
893 |
2,363 |
|
Weighted average number of ordinary shares in issue (thousands) |
30,872 |
25,312 |
26,185 |
|
Adjustment for share options (thousands) |
527 |
754 |
818 |
|
Weighted average number of ordinary shares for headline diluted earnings per share (thousands) |
31,399 |
26,066 |
27,003 |
|
Headline diluted earnings per share in pence |
4.02 |
3.43 |
8.75 |
Dividends
During the first six months of 2008, Motivcom plc paid a final dividend of £463,000 to its equity shareholders (2007: £226,000). This represents a payment of 1.50 pence per share (2007: 0.90 pence).
6 Share-based payments
The Group has seven contracted share option schemes, comprising those disclosed in the Group's most recent financial statements and a Sharesave Scheme introduced on 3 June 2008. The following options have been valued in accordance with the provisions of IFRS 2.
|
Scheme |
Date of original grant |
Number of options |
Option price |
Vesting conditions |
Life of option |
Fair Value |
|
EMI Option Scheme |
29/03/2004 |
150,000 |
£0.04285 |
2 years from 25/08/2004 |
10 Years |
£0.01 |
|
Sharesave Scheme 1 |
28/04/2005 |
192,736 |
£0.64 |
3 Years |
3 Years |
£0.08 |
|
EMI Option Scheme |
21/11/2005 |
111,111 |
£0.945 |
3 Years |
10 Years |
£0.11 |
|
Sharesave Scheme 2 |
07/06/2006 |
75,014 |
£0.815 |
3 Years |
3 Years |
£0.10 |
|
Sharesave Scheme 3 |
04/06/2007 |
34,608 |
£1.125 |
3 Years |
3 Years |
£0.23 |
|
Sharesave Scheme 4 |
03/06/2008 |
461,433 |
£0.685 |
3 Years |
3 Years |
£0.16 |
|
C T Lloyd Option Scheme |
21/06/2007 |
768,588 |
£0.005 |
Each £20m growth in market value |
10 Years |
£0.12 |
The fair value of services received in return for share options granted to employees is measured by reference to the fair value of share options granted. The estimate of fair value of the services received is measured based on a binomial lattice model for the EMI and Sharesave Schemes and a Monte Carlo model for the C T Lloyd Option Scheme. The vesting period is used as an input to those models. The following additional assumptions were used for all schemes except Sharesave Schemes 3 and 4:
- Expected volatility of 24% based on the average volatility of the Company since flotation in August 2004
- A dividend yield of 1.20%
- Risk free interest rate of 5.31%
The following additional assumptions were used for Sharesave Scheme 3:
- Expected volatility of 22% based on the average volatility of the Company since flotation in August 2004
- A dividend yield of 1%
- Risk free interest rate of 5.50%
The following additional assumptions were used for Sharesave Scheme 4:
- Expected volatility of 34% based on the average volatility of the Company since flotation in August 2004
- A dividend yield of 2.35%
- Risk free interest rate of 4.92%
7 Adjustments to provisional fair values of prior year business combination
The acquisition of Protravel TB Limited was completed on 15 November 2007 and was disclosed in the financial statements for the year to 31 December 2007. As this acquisition was completed approximately six weeks before the end of the financial year, there was insufficient time to fully assess the impact of any potential onerous contracts. The fair value of the identifiable assets and liabilities for this acquisition were, therefore, provisional. The financial statements for the year to 31 December 2007 did not, however, correctly disclose that fact.
The fair value of the identifiable assets and liabilities of Protravel TB Limited has now been adjusted to reflect the value of one onerous contract. The accounting effect of this adjustment is to recognise a provision for an onerous contract at 31 December 2007 of £360,000, create a deferred tax asset of £28,000 and increase goodwill by £332,000. The reported profits and cash flows of the Group for the year to 31 December 2007 and the reported net assets of the Group as at 31 December 2007 remain unchanged.
The now discovered liabilities in respect of the onerous contract existed at the date of acquisition on 15 November 2007. The outcome of this contract was not in anyway affected by the actions or inactions of the Group. Legal action is being undertaken against the vendor.
The adjustments have been made as at the date of the combination and the comparative amounts in the balance sheet as at 31 December 2007 have therefore been restated accordingly.
8 Statement of changes in equity
|
Share capital £000 |
Share Premium £000 |
Other Reserves £000 |
Retained earnings £000 |
Total equity £000 |
|
|
Balance at 1 January 2007 |
126 |
2,882 |
75 |
4,745 |
7,828 |
|
Issue of shares |
2 |
270 |
- |
- |
272 |
|
Profit for the period |
- |
- |
- |
884 |
884 |
|
Dividends paid |
- |
- |
- |
(226) |
(226) |
|
Share based payments |
- |
- |
- |
17 |
17 |
|
Deferred tax on equity |
|||||
|
based share payments |
- |
- |
- |
73 |
73 |
|
Balance at 30 June 2007 |
128 |
3,152 |
75 |
5,493 |
8,848 |
|
Issue of shares |
26 |
6,797 |
- |
- |
6,823 |
|
Issue costs |
- |
(180) |
- |
- |
(180) |
|
Profit for the period |
- |
- |
- |
1,446 |
1,446 |
|
Dividends paid |
- |
- |
- |
(128) |
(128) |
|
Share based payments |
- |
- |
- |
18 |
18 |
|
Deferred tax on equity |
|||||
|
based share payments |
- |
- |
- |
(112) |
(112) |
|
Change in rate for |
|||||
|
Provision of deferred tax |
- |
- |
- |
(8) |
(8) |
|
Balance at 31 December 2007 |
154 |
9,769 |
75 |
6,709 |
16,707 |
|
Issue of shares |
1 |
131 |
- |
- |
132 |
|
Profit for the period |
- |
- |
- |
980 |
980 |
|
Dividends paid |
- |
- |
- |
(463) |
(463) |
|
Share based payments |
- |
- |
- |
17 |
17 |
|
Deferred tax on equity based share payments |
- |
- |
- |
(36) |
(36) |
|
Balance at 30 June 2008 |
155 |
9,900 |
75 |
7,207 |
17,337 |
A copy of this report will be posted to shareholders in due course and is also available on the Company website at www.motivcom.com.
Related Shares:
MCM.L