25th Apr 2006 07:03
Thomson Intermedia PLC25 April 2006 Thomson Intermedia plc Underlying pretax profits up 254% Thomson Intermedia, a leading provider of media intelligence, today announcesits preliminary results for the year ended 31 January 2006 Group Financial Highlights • Turnover increased by 88% to £11.1m (2005: £5.9m)• Underlying pretax profit* increased by 254% to £2.2m (2005: £0.6m)• Adjusted earnings per share** increased by 178% to 7.15p (2005: 2.57p)• Gross sales increase by 30% to £12.3m (2005: £9.5m)• Deferred income up 68% to £4.7m (2005: £2.8m) Operational highlights • Acquisition of billetts, the UK market leader in media and marketing performance consultancy, in August 2005 for an initial consideration of £7.5m o Integration progressing well• 101 new group contracts secured and 32 upgraded• Exclusive long-term deals signed with top six regional media owners• Group renewal rate exceeds 90% *pre amortisation and share incentives ** pre amortisation, share incentives and deferred tax Sarah Jane Thomson, Joint Chief Executive Officer of Thomson Intermedia, said: "The year to January 2006 has been one of the most exciting and dynamic for theGroup, as we not only reported very strong organic growth but completed thestrategically important acquisition of billetts in August 2005. These resultsprove the significant benefit of the billetts acquisition across all metricsdespite the fact that both businesses largely traded independently during thebilletts earn-out phase." "The focus now is to complete in May the full integration of the two businesses,products and personnel, in order to benefit from the combined strength ofThomson Intermedia's technology & data with billetts value-added mediaconsultancy." "Next year will see the launch of unique products and we look forward tobenefiting financially & operationally from our strengthening customer base aswell as from a fully integrated Group in the UK." 25 April 2006Enquiries: Thomson Intermedia Sarah Jane Thomson, Joint Chief Executive Today 020 7457 2020 David Trendle, Finance Director Thereafter 020 8466 2906 College Hill Adrian Duffield/Ben Way 020 7457 2815/2055 Financial Results Group turnover in the year to 31 January 2006 increased by 88% to £11.1m (2005:£5.9m), of which billetts contributed £3.7m. The original Thomson Intermediabusiness showed strong organic revenue growth up 26% to £7.5m (2005: 5.9m),whilst billetts' revenue increased by 16% for the comparative five months in its2005 financial year. Thomson Intermedia gross sales contracts grew by 26% to £8.1m (2005: £6.3m)including fees of £400,000 (2005: £233,000) from its German investment. Newsales contracts continued at a strong pace, up 38%, to £3.4m (2004: £2.4m).Retrospective vouching continued its growth contributing £1.0m (2005: £0.4m).billetts billings (gross sales) were £4.3m for the five month period to January2006, with £3.5m relating to subscription contracts and £0.8m to consultancyprojects. The Group deferred income, secured on future contracts, increased by 68% to£4.7m (2005: £2.8m), £0.5m which relates to billetts contracts. Gross profit increased by 73% to £7.0m (2005: £4.1m), with billetts contributing£1.6m. The original Thomson Intermedia's gross margin continues to improve, upfrom 68.4% to 72.5%. billetts' gross margin improved to 43.5%. Overall Groupmargin was 63%. Underlying operating margins, before long term incentives and goodwillamortisation, increased sharply to 23.4%, for the original Thomson Intermediabusiness (2005: 10%) with billetts margin improving from 7% to 13%. Theresultant Group operating margin was 20%. This improvement was aided by tightcost control resulting in single digit cost growth for both businesses. Underlying group pretax profit increased by 254% to £2.2m (2005: £0.6m),including a contribution of £0.4m from billetts. Group pretax profit was £1.8m(2005: £0.4m). Adjusted earnings per share improved by 178% to 7.15p from 2.57p. Basicearnings per share improved from 3.30p to 7.00p. The Group has a tax credit movement of £0.4m, with £3.8m of tax losses carriedforward. A tax charge of £0.1m has arisen against billetts profits. The Board is not recommending a dividend in this financial year. In order tocreate distributable reserves and provide flexibility, if required, theDirectors plan to apply to the courts to eliminate its cumulative losses againstits share premium account. This will be put forward for shareholder approval atthe AGM. The Board will review its dividend policy following this restructure. The Group is operationally cash generative with cash flow improving by 223% to£1.2m (2005: £0.4m). The Group has moved to a net debt position of £0.2m aspart of the the acquisition of billetts was funded by cash. The initial consideration paid for billetts was £7.5m. The Group raised £4.5min a vendor placing, with the balance being funded by 403,153 shares to thevendor and £3m of bank facilities. The Group has a maximum contingent consideration of £5.6m, payable in loan notesdependent on billetts' performance between 1 May 2005 and 30 April 2007. TheBoard estimate that the maximum earn-out of £3.9m will be payable based on thebilletts' performance relating to year ending 30 April 2006. The performance ofthe US subsidiary, MPMA, is encouraging with a number of recent new businesswins. Strategy Thomson Intermedia's vision to be the leading provider of advertising and mediatransparency and intelligence has been significantly advanced by the earningsenhancing acquisition of billetts. The enlarged Group will provide aninvaluable and comprehensive turnkey solution to advertisers, delivered directlyto the desktop supported by expert media consultants, to ensure they receivemaximum benefit from every pound of their marketing spend. Thomson Intermedia is now capitalising on its proprietary technology and eightyears of data to penetrate the UK market and expand its product reach. Thecombination of the Group's leading technology and scale of its dataset havecreated significant barriers to entry for any potential competitors. With the strength of billetts, the UK's leading media performance managementconsultancy, the enlarged Group is now placed at the hub of the advertisingtriangle (advertiser - agency - media owner). Thomson Intermedia will provideessential solutions to all three groups. The developed product suite will help advertisers throughout their wholecommunications cycle, ensuring and monitoring every pound of marketing spend isas effective as possible. The constituents of the cycle offered by the Group now include: • Agency Management: billetts consultancy services help advertisers toidentify the best agency for their requirements, construct the most appropriatecontract for their needs, and structure relevant incentivisation packages forthe agency. • Planning & Insight: billetts consultants can help clients gain impartialadvice on the best strategy for them, independently reviewing agencies proposalson levels of spend and which media routes to use. • Market Intelligence: Thomson Intermedia's systems provide the insight intothe weight of competitor activity, the mix of communications channels beingused, and the likely impact of the clients' messages in real time. • Verification: Thomson Intermedia's online vouching enables an instant auditof a client's ads having appeared • Performance & ROI: billetts' econometric capability coupled with ThomsonIntermedia technology and data can provide unique and valuable insights into theeffect of marketing spend. This is the final stage of the communications cycle,thereby completing the product circle. The Group can also extend its reach to advertisers targeting the top 5,000 withhighly functional web-based systems, for the first time enabling media auditingand ROI analysis to be presented to this group via a Thomson Intermediainterface. The addition of the high value added consultancy, which billetts brings, willalso enable deeper penetration within the existing customer base as well ascross selling opportunities for the full suite of products. The technologicaland database skills held by Thomson Intermedia will enable a more efficient andvaluable service alongside the potential to be the independent supplier for allthe marketing needs of the advertiser. The move into the publisher platform (details below) will allow the Group notonly to cut costs and improve it's product; it will provide the backbone fornumerous services to the media owners to assist them in reducing costs andimproving efficiencies. It will also place the Group at the forefront ofregional media in terms of intensity of data, cementing its position as the mostaccurate and technologically advanced provider of marketing information. Acquisition of billetts The acquisition of a value added media consulting was logical for the businessas a complimentary area which enhanced Thomson Intermedia's position and furtherdifferentiated its service as the key provider of independent and transparentmarketing information and knowledge. The acquisition was structured to include two tranches of contingentconsideration based on the earnings performance of the billetts business in thefirst instance, and the earnings of its US subsidiary, MPMA, in the secondinstance. This was to accommodate the potential earnings growth of thedeveloping marketing sciences and international revenue streams within thebilletts business and the continued improvement in securing new revenue andmoving further into profitability for MPMA, which is still in the early stagesof the growth cycle in an emerging and transforming market in the US. As the Group approaches the end of the first period to 30 April 2006, thebilletts business has continued to strengthen, not only winning moreinternational work, but also gaining market share in the UK, securing work innew media and securing a healthy improvement in its marketing effectivenessbrand (marketing sciences). Operational review (i) Thomson Intermedia Core business Thomson Intermedia has continued to develop the core subscription business. Newcontract activity was strong with 63 new contracts secured alongside a further32 upgrades to existing contracts. Renewal rates continue to improve; up to 88%(2005: 83%), with the corporate renewal rate over 90%, whilst continuing toincrease yields from existing clients. Average rates for new subscriptionbusiness increased to £28,000 from £25,000. Publisher platform Thomson Intermedia has already signed exclusive contracts with the top sixregional media owners to its publisher platform. This enables the media ownersto gain efficiencies through an electronic vouching system directly accessibleby the agencies. Using the Thomson Intermedia technology, over 1,000publications are moving from a manual scanning process to electronic receipt ofpdf and metadata. Thomson Intermedia will therefore significantly enhance itsdatabase to include the vast majority of the £3 billion regional advertisingspend. Thomson Intermedia will also be able to expand its offering to media owners byproviding the first ever electronic system which enables communication andanalysis between media owners and agencies and will be used by most mediaagencies in the UK. System developments will include electronic approval,invoicing and sales ledger processes Retrospective Vouching Thomson Intermedia has continued to drive the importance of transparency and haswon additional clients for whom Thomson Intermedia has identified errors.. Thebusiness model continues to be developed and will be integrated into the fullproposition over time. Germany Having now completed a year, the German operation is improving its offering withmore trend data. Operations are progressing well as they have benefited fromthe latest versions of Thomson Intermedia's systems, with sales continuing toimprove. Recent wins include Sony and Unilever. The German operation expectsto break even in early 2007 with increasing returns as revenue exceeds therelatively fixed cost base. The profit share agreement commences in 2007 whenthe royalties agreement lapses at the end of 2006. This is pleasing progress asit shows that the business is replicable in other countries and proves therequirement for the products in other territories. (ii) billetts billetts media consulting This division accounts for 78% of the billetts group's turnover and providesmedia performance monitoring for high spending advertisers. billetts mediaconsulting has enhanced its position in the UK with further wins both fromcompetitors and new business. In addition, the billetts brand has beenbroadening its international presence with numerous multi-national contractswhich have grown to nearly 30% of billetts media consulting's revenue. billettshas developed a strong partnership network to assist this growth across Europeand more recently into Asia. A measure of the value and calibre of media consulting is demonstrated in itsexceptionally high retention rate with the loss of only three subscriptionclients during the last nine months. billetts marketing services (ROI) This division accounts for 18% of the billetts group's turnover and providesconsultancy focused on optimising marketing return on investment for advertisersthrough ad hoc consultancy projects. In the nine months to January 2006, 25contracts were secured with an average value of £43,000. Revenue for thisperiod shows a 21% increase on the previous year, which is consistent with thegrowing need and the enormous potential within the division. The division has grown its client base with a large number of clients providingrecurring work and will be benefiting from developments providing ongoingsolutions to clients. Media Performance Marketing America (MPMA) billetts 80% owned US subsidiary, MPMA, continues to gain traction in thisemerging market, with revenue growth of circa 120% to $1.3m expected comparingthe year ending 30 April 2006 to the previous year. With John Billett's mainfocus being MPMA from May 2006 along with the strengthening of the US basedteam, the signs for continued expansion are extremely positive. MPMA's clients collectively represent 7% of all US broadcast, cable andsyndication advertising spend for 2005. Analysis shows that TV advertisersusing MPMA services have on average enjoyed a 26% improvement in their mediavalue in 2005 compared to 2003, providing their advertisers with unparalleledmarketing efficiencies. The analysis identifies price ranges to be +/- 30%around the average. MPMA have completed a comprehensive review of its data tounderstand this differential including a review of upfront versus scattermarkets, the quality of buying and the size of budget available. Integration & management During the second half of the year there have been a number of working groupsset up to ensure a successful integration of the two businesses, both from aproduct point of view and importantly from a staff perspective. The main areas of focus have been: • Personnel and organisational changes into a new structure• Group strategy and vision• Development of billetts media audit product for new advertiser segments• Improvement of data provision to billetts• Development of Group products The IT developers have been working extremely hard applying technology to thebilletts business which provides integrated databases across the Group business.They have developed an extremely powerful and impressive new online audit systemplanned to be launched in the summer. One of the significant benefits of the acquisition was the high calibreadditional management resource which existed in billetts. The restructuremaximises the potential of this resource within the Group to drive theintegrated business forward. On 1 May 2006 the integration of all the non US businesses will be finally andfully implemented, which will include new key management Group roles for five ofthe billetts staff. Current trading and outlook The focus over the last six months, has been to integrate the businesses inorder to capitalise on their combined influence and strengths. The integrationhas been progressing well, and following the UK earn out completion date of 30April 2006, Thomson Intermedia will be moving ahead with an exciting jointdevelopment plan. The Group already enjoys a strong client base, with over 70 of the top 100 UKadvertisers as ongoing clients. The Board looks forward to deepening theserelationships and providing more products and services to these clients as wellas driving penetration deeper into the additional 4,650 advertisers for whom ithas data and systems, as well as agencies and media owners. The new structurewill encourage both enhanced customer relationships and new business growth. With a dedicated resource on international expansion Thomson Intermedia aims tobuild on the lessons and experience of its German business and the opportunitiesthat exist both in the US, as part of MPMA and billetts partners to identify anddrive international expansion of the Group's products. The Board is confident that the enlarged Group is in a significant and strongposition to continue its UK penetration, capitalise in the short to medium termon revenue synergies from the integration of the businesses and develop itsinternational strategy to launch its scalable solution in other markets. The first quarter of the year has started well, in line with the Board'sexpectations, with a strong pipeline of business across the entire productsuite. ------- Consolidated Profit and Loss Accountfor the year ended 31 January 2006 Note 2006 2006 2005 2005 £'000 £'000 £'000 £'000 Turnover - continuing operations 7,459 5,924Turnover - acquisitions 3,677 -Total Turnover 2 11,136 5,924 Cost of sales - continuing operations (2,051) (1,870)Cost of sales - acquisitions (2,078) -Total cost of sales (4,129) (1,870) Gross profit - continuing operations 5,408 4,054Gross profit - acquisitions 1,599 -Total Gross Profit 7,007 4,054 Overheads - continuing operations (3,676) (3,475)Long term incentives (229) (258)Overheads - acquisitions (1,345) - Administrative Expenses - continuing operations (3,905) (3,733)Administrative Expenses - acquisitions (1,345) -Total Administrative Expenses (5,250) (3,733) Operating profit - continuing operations 1,503 321Operating profit - acquisitions 254 -Total Operating Profit 2 1,757 321 Interest receivable 49 39Interest payable and other finance costs (55) -Profit on ordinary activities before taxation 1,751 360Research and development tax credit - 114UK Corporation tax on profits at 30% 5 (126) (6)Deferred tax 5 430 480Taxation 5 304 588Profit on ordinary activities after taxation 2,055 948Minority Interest 10 - Retained profit for the year 2,065 948 Earnings per share, pence- basic 3 7.00 3.30- diluted 3 6.67 3.14 All amounts relate to continuing activities and acquisitions as part ofcontinuing operations All recognised gains and losses are shown other than £6k of foreign currencylosses, which will be shown in the full statutory accounts within the Statementof Total Recognised Gains and Losses. Consolidated Balance Sheet as at 31 January 2006 Note 2006 2006 2005 2005 £'000 £'000 £'000 £'000Fixed assets Intangible fixed assets 11,054 31Tangible fixed assets 706 518Investments 122 - 11,882 549Current assets Debtors: Due within one year 5,926 2,290Debtors: Due after more than one year 1,235 2Total Debtors 7,161 2,292 Deferred tax 910 480Cash at bank and in hand 2,774 1,598 3,684 2,078Total current assets 10,845 4,370 Creditors: amounts falling due within one year (2,479) (848) Net current assets 8,366 3,522 Total assets less current liabilities 20,248 4,071 Creditors: amounts falling due after one year (2,687) - Provisions for liabilities and charges 6 (4,119) - Accruals and deferred income (5,767) (3,535) 2 7,675 536Capital and reserves Share capital 7,823 7,186Share premium 8,869 5,064Merger reserve (4,504) (5,250)Profit and loss account (4,405) (6,464)Shareholders' funds 7,783 536 Minority Interest 108 - 7,675 536 Consolidated Cash Flow Statementfor the year ended 31 January 2006 Note 2006 2005 £'000 £'000 Net cash inflow from operating activities 7a 1,231 381 Returns on investments and servicing of finance 7b (28) 32 Taxation 7b (6) 251 Capital expenditure and financial investment 7b (264) (295) Acquisitions and disposals 7b (7,099) - Cash inflow before financing and management of liquid (6,166) 369resources Management of liquid resources 7b (515) (91) Financing 7b 7,280 - INCREASE IN CASH IN THE YEAR 599 278 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2006 2005 £'000 £'000 Increase in cash in the year 599 278 Cash inflow from increase in debt (2,937) - Cash outflow from change in liquid resources 515 91 Movement in net funds in the year (1,823) 369 Net funds at start of year 1,598 1,229 Net (Debt)/Funds at end of year 7c (225) 1,598 Notes to the Financial Statementsfor the year ended 31 January 2006 1. Accounting policies The financial statements have been prepared in accordance with applicableAccounting Standards under the historical cost convention. The principal accounting policies are: Acquisition method of accounting As per FRS 7 Fair Values in acquisition accounting, any subsidiary'sidentifiable net assets acquired will be attributed fair values reflectingconditions at the date of acquisition. Under the acquisition method the resultsof subsidiaries acquired are included from the effective date of acquisition.When the cost of acquisition exceeds the fair values attributable to the group'sshare of acquired net assets, the difference is treated as purchased goodwill.This is capitalised and amortised as per the group goodwill policy stated below. Future anticipated payments to vendors in respect of earn-outs are based on thedirectors best estimates of future obligations, which are dependent on thefuture performance of the interests acquired and assume the acquired companymaintain/improve profits in line with directors estimates. When earn outs areto be settled by cash consideration, the fair value of the consideration isobtained by discounting to present value the amounts expected to be payable inthe future. The discount rate used is that at which the group could obtain asimilar amount of borrowing. The resulting interest charge is included withinother finance costs adjacent to interest. Transactions and balances between subsidiary undertakings are eliminated. Theresults, assets and liabilities, including related goodwill, of overseassubsidiaries are translated into sterling at rates of exchange ruling at thebalance sheet date. Exchange adjustments arising when the opening net assetsand the profits for the year retained by an overseas subsidiary are translatedinto sterling, less exchange differences arising on related foreign currencyborrowings, are taken directly to reserves and reported in the statement oftotal recognised gains and losses. Goodwill Goodwill is the difference between the cost of an acquired entity and theaggregate of the fair value of that entity's identifiable assets andliabilities. Positive goodwill is capitalised, classified as an asset on the balance sheetand amortised on a straight-line basis over its useful economic life. It isreviewed for impairment at the end of the first full financial year followingthe acquisition and in other periods if events or changes in circumstancesindicate that the carrying value may not be recoverable. Acquisitions that entail significant market positions and which are of long-termstrategic significance to the Company's operations are classified as strategicacquisitions, with goodwill amortised over 20 years. For acquisitions of complementary operations in markets where the Company isalready established, the amortisation period for goodwill is between 5 and 10years. 2. Turnover The turnover and operating profit for the year was derived from the Group'sprincipal activities, which were carried out in the following regions: 2006 2005 U.K. Europe Rest of world U.S. Total U.K. Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Turnover 9,569 834 452 281 11,136 5,924 5,924 Operating profit 1,363 193 239 (38) 1,757 321 321 Net assets 7,979 - - (304) 7,675 536 536 The segmentation is based on origination, which is not materially different fromdestination. 3. Earnings per share 2006 2005 £'000 Weighted Earnings per £'000 Weighted Earnings average number share pence average per share of shares number of pence sharesBasic Earnings per share 2,055 29,380,750 7.00 948 28,744,247 3.30attributable to ordinaryshareholdersEffect of options - 1,432,829 - - 1,437,212 -Diluted Earnings per share 2,055 30,813,608 6.67 948 30,181,459 3.14Adjustment for deferred tax (430) - - (480) - -Adjustment for amortisation 246 - - 12 - -Adjustment for share incentives 229 - - 258 - -Adjusted Basic Earnings per 2,100 29,380,750 7.15 738 28,744,247 2.57share before deferred tax,amortisation and shareincentivesEffect of options - 1,432,829 - - 1,437,212 -Adjusted Diluted Earnings per 2,100 30,813,608 6.82 738 30,181,459 2.45share Earnings per share before deferred tax, amortisation and share incentives arepresented as the Directors consider that this represents a meaningful measure ofperformance of the Group. For diluted earnings per share, the weighted averagenumber of shares in issue is adjusted to assume full conversion of all dilutivepotential ordinary shares: those share options granted to employees where theexercise price is less than the market price of the Company's ordinary shares. 4. Fixed asset investments Company Subsidiary undertaking £'000Cost and net book valueAt 1 February 2005 5,250Additions ( see 24d ) 12,320At 31 January 2006 17,570 At 31 January 2006 the company had interests in the following subsidiaryundertakings: Direct Indirect Nature of business Subsidiary undertaking Country of Class of share incorporation capital heldThomson Intermedia England and Wales Ordinary £1 100% - Technology and mediaAssociates Limited monitoring business Acquisitions and other investments acquired during the year Thomson Media Control Germany Baden-Baden Fixed capital 50% - Media consultantsGmbh & Co Kg (TMC) BCMG Ltd England and Wales Ordinary £1 100% - Holding companybilletts media consulting England and Wales Ordinary £1 100% - Media consultantsLtdbilletts international England and Wales Ordinary £1 100% - Media consultantsLtdbilletts marketing England and Wales Ordinary £1 100% - Marketingsciences Ltd consultants Barsby Rowe Ltd England and Wales Ordinary £1 - 100% Non-tradingbilletts consulting England and Wales Ordinary £1 100% - Holding companyLimitedBCMG Acquisitions Limited England and Wales Ordinary £1 - 100% Holding companybilletts media management England and Wales Ordinary £1 - 100% DormantLtdBCMG US Inc US Corporation Ordinary $1 100% - Holding companybilletts America LLC US LLC Ordinary $1 - 80% Media consultants During the year Thomson Intermedia PLC (TI) added or acquired the aboveinvestments for the group. For fair values of billetts group assets acquired see note 7d. On the 23rd August 2005 the company acquired the entire share capital of BCMGLimited (billetts Group) for a maximum total consideration of £13.1m. Theinitial consideration comprised the allotment and issue of £0.85m ordinaryshares and £6.7m in cash. The final consideration is dependent on the financialperformance of the billetts Group for the period to 30th April 2006 and thefinancial performance of billetts America LLC, BCMG's subsidiary in the UnitedStates, to 30th April 2007. The maximum amount of deferred consideration is£3.85m and £1.75m respectively. The deferred consideration has been discounted in line with the Group's policyand FRS 7. The deferred consideration is secured by Loan notes issued in favourof BCMG's directors. The Loan note amounts reflect the estimated financialperformance against targets and a provision has been made for the contingentconsideration as shown in note 6. The loan notes as well as the Group's facilitywith the Bank of Scotland are secured by way of a debenture agreement over theassets of the Group. The acquisition method of accounting has been used in the consolidation of thebilletts Group accounts with the Thomson Intermedia PLC Group's accounts.Merger relief has been taken for the consideration shares. 5. Taxation on profit on ordinary activities 2006 2005Group £'000 £'000Corporation Tax at 30% 126 6Research and development tax credit - (114)Deferred tax (430) (480) 304 (588) 6. Contingent consideration for acquisitions The acquisition of billetts, includes a deferred element that is contingent onthe future financial performance of the acquired entity. No material contingentconsideration will become payable unless the acquired entity delivers greaterprofits during the earn-out period than prior to the acquisition. If theearn-out conditions are met, £3.85m of the consideration will become payable in2006, the remaining £1.75m will become payable in 2007. The provision forcontingent consideration for acquisitions represents the best estimate of theamount expected to be payable in cash or loan notes. The contingentconsideration has been discounted in line with the group's policy and FRS 7. Maturity of contingent consideration for acquisitions:- Group Company Cash or loan notes Cash or loan notes 2006 2005 2006 2005 £'000 £'000 £'000 £'000 In one year or less 3,793 - 3,793 -In more than one year but less than two 326 - 326 -years Total contingent consideration 4,119 - 4,119 - (See note 7d) 7. Notes to consolidated cash flow statementa Reconciliation of operating profit to net cash inflow from 2006 2005operating activities £'000 £'000Operating profit 1,751 321Depreciation 276 228Amortisation 246 12Foreign exchange non-cash movement (8) -Phantom share non-cash movement (106) 230Issue of share options under UITF 17 335 28Increase in debtors (2,648) (853)Decrease in creditors (145) 211Increase in accruals and deferred income 1,530 204Net cash inflow from operating activities 1,231 381 b Analysis of cash flows for headings netted in the cash 2006 2005flow statement £'000 £'000Returns on investments and servicing of finance Interest received 43 39Interest paid (71) (7) Net cash (outflow)/inflow from returns on investments and (28) 32servicing of finance Taxation Corporation tax (paid)/received (6) 251 Capital expenditure and financial investment Purchase of tangible fixed assets (264) (295) Acquisitions and disposals Purchase of investment (87) - Purchase of subsidiary undertakings (6,665) -Net cash acquired with subsidiaries 344 -Expenses paid in connection with purchase of subsidiary (691) -undertakings Net cash outflow from returns on investments and servicing of (7,099) -finance Management of liquid resources Payments to deposit accounts (515) (91) Financing Receipts from issue of shares 4,500 -Receipt of bank loan 3,000 -Repayments of bank loan (63) -New share issue costs (157) - Net cash inflow from financing 7,280 - c Analysis of net Opening Cash flow Acquisition Closing balancefunds balance £'000 £'000 £'000 £'000 Cash at bank and in hand 748 (164) 825 1,409Liquid resources 850 515 - 1,365 1,598 351 825 2,774Overdrafts - (62) - (62) 1,598 289 825 2,712Loans - (2,937) - (2,937) Net (Debt)/Funds 1,598 (2,648) 825 (225) d Purchase of subsidiary undertakingsDescription of item acquired Net Book Fair Value Fair Value Value £'000 adjustment £'000 £'000 Fixed Assets 196 - 196Debtors 1,162 - 1,162Other Debtors 851 - 851Bank and Cash 344 - 344Trade Creditors (421) - (421)Other Creditors (623) - (623)Taxation Liabilities (541) - (541)Accruals and Deferred Income (13) - (13) NET ASSETS ACQUIRED 955 - 955 Minority Interests 96 - 96 Goodwill Capitalised 11,269 - 11,269 Total 12,320 - 12,320 Comprising: Cash 6,665Shares 845Deferred consideration (discounted) 4,119Professional fees and costs 691 Total cost of acquisition 12,320 8. Financial Information The financial information set out above does not constitute the company'sstatutory accounts, within the meaning of Section 240 of the Companies Act 1985,for the year ended 31 January 2006 or 2005, but is derived from those accounts.Statutory accounts for the year ended 31 January 2005 have been filed with theregistrar of companies and those for 2006 will be delivered following theGroup's Annual general meeting. The auditors have reported on these accounts;their reports were unqualified and did not contain a statement under Section 237(2) or (3) of the Companies act 1985. When published, the Group's annual report and Accounts will be sent toshareholders and will be made available to the public at the Group's registeredoffice, 1 Westmoreland Road, Bromley, Kent BR2 0TB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ebiquity