26th Nov 2009 07:00
Tangent Communications plc ("Tangent" or the "Company")
Results for the half-year ended 31 August 2009
26 November 2009
Tangent is a leading integrator of technology and marketing strategy, delivering for its clients improved customer engagement and revenue through direct mail, web, email, mobile and print.
|
Financial highlights |
Total revenue £8.51m (2008: £8.84m)
Revenue outside property sector up 11%
Underlying operating profit down 57% to £0.35m (2008: £0.81m)
Underlying operating margin 4.1% (2008: 9.1%)
Underlying basic earnings per share down 59% to 0.14p (2008: 0.34p)
Cash used in operations £0.30m (2008: cash generated £0.74m)
Net funds of £1.63m (2008: £2.33m)
Dividend of £0.34m paid in period
Operational highlights
Integration of Lateral into Tangent One to create 40 strong e-commerce unit
Zui confirmed first major contract win
Digital Print Partnership adding 15-20 customers a week (total 364)
Active accounts in property sector increased every month in the period (1,843 to 2,124)
Tangent acquired Snowball in September 2009, a leading customer insight agency. The acquisition transforms Tangent's skills and capabilities in the area of data insight and analytics. This will strengthen our offering at a critical time when businesses are seeking clear returns on investment from their marketing activities.
"The first half of the year has been a period of investment in the core business activities of Online and Direct Marketing. The integration of Lateral and now Snowball increases the depth of our offering and provides an excellent base for future growth. The second half of the year has continued to show signs of improvement in the property sector with sales of this division from August onwards now increasing compared to the same period last year. Our outlook for the rest of the year is in line with management's expectations."
Nicholas Green and Timothy Green, Joint Chief Executives
For further information, please contact:
|
Tangent Communications plc |
020 7462 6100 |
|
Nicholas Green (Joint CEO) |
|
|
Timothy Green (Joint CEO) |
|
|
Graeme Harris (Finance Director) |
|
|
Collins Stewart |
020 7523 8350 |
|
Adrian Hadden/Stewart Wallace |
About the Company:
Tangent is a leading integrator of technology and marketing strategy, delivering for its clients improved customer engagement and revenue through direct mail, web, email, mobile and print.
Tangent employs 175 people across four locations in London, Newcastle, Cheltenham and Melbourne and is traded on AIM (AIM: TNG).
For more information please visit www.tangentplc.com
Joint Chief Executives' Statement
Performance
The Company managed to maintain revenues broadly in line with the previous year through tough market conditions. The increased cost base from our recent acquisitions had a negative impact on the overall profitability, although we expect this investment in skills to deliver future growth in higher margin parts of the business. We have adopted International Financial Reporting Standard 8: Operating Segments ("IFRS 8") for the first time which has resulted in the disclosure of the financial performance of our Online and Direct business segments and further clarified our exposure to the property market, which now only accounts for 31% of revenues, reduced from 40% in 2008.
The Online business revenues, particularly in design and build services, were up 47% to £2.08m from £1.36m, which reflects £365,000 of additional sales brought across from the Lateral transaction but also an increase in the core business of 21%. The underlying operating profit has marginally declined over this period as growth has required more than historic levels of resource. The increased overhead has allowed us to provide a better and broader service to our customers; in the long term this will assist in the drive for growth in a complex and expanding marketplace.
The Direct business revenues were lower by £982,000; of which 95% reflect the reduction in sales to the property sector. This had a heavy impact on our operating margin during the period although we appear to have seen this part of the business stabilising in recent months. The degree of retention of our estate agent client base has been strong. Whilst activity has been low, recent months have seen a return in activity from a high number of customers and a slow, increase in average spend. The number of active accounts in October 2009 hit 2,853 compared with 2,173 in October 2008. Whilst this is encouraging, the number of items that are being ordered per day remains significantly down on prior periods and with property stock levels still low we await the recovery of the property market to drive growth in this business.
The stability in revenues across our non-property Direct Marketing service has seen this become the largest revenue line in the Company. With the integration of Snowball we expect further increases in the contribution from this segment before the year end.
Tangent has three key core business streams: Tangent One (Online), Tangent Direct/Snowball (Data and Direct Marketing) and Ravensworth (Property).
Tangent One - our Online business was subject to significant transformation in the first half of 2009. The acquisition of the award winning agency Lateral in March 2009 combined an industry-leading creative team with Tangent One's already ground breaking technology platforms. Sales increased within the division from £1.36m to £2.01m, an increase of 47%. Whilst profits remain at a similar level, there are a number of projects in progress that will be completed in the second half of the year. A factor already bringing incremental billings is our expanded service offering, which now includes strategy, creative and social network development, all of which have attracted a great deal of interest from existing clients and new business prospects in our pipeline.
Recent blue chip account wins include Boots.
Our Australian office continues to outperform expectations. With continued support from our UK base, the team is growing; with new business wins now coming through in addition to the continued project with major retailer Angus and Robertson.
Tangent Direct/Snowball - our Data and Direct Marketing businesses will take on the newly acquired Snowball brand in the coming weeks. Over the first half, sales from our key accounts all continued with high levels of activity and we have seen budgets come through in the second half for the response-driven services that now underpin the offering. Whilst direct mail continues to perform well for key audience segments, we have begun to offer a more integrated approach, inviting our clients to embrace all channels and methods as part of customer/supporter-led contact strategy. We anticipate growth from our database management services which in turn through Snowball's insight is expected to increase activity to our digital print facility in Newcastle.
Ravensworth - our division for services to the property sector has responded well to tough market conditions. We have retained our service levels when many of our competitors have had to reduce or leave the market entirely. Whilst the first half of the year has shown a revenue reduction of 25% year on year, our retention of customer branches has been very high and monthly turnover has started to recover from trough levels experienced earlier in the year. We are now starting to see an improvement in trading over prior year comparatives, with revenues in August and each subsequent month exceeding those generated in the same month in the prior year. The retention of agents in the market has been particularly robust and this provides a platform to support a sustained recovery in the market. The facility in Newcastle has adapted to the change in conditions and we have applied the skills and services of the staff to direct marketing, providing industry-leading creative planning and project management skills for many of the UK's leading property and non-property brands.
New growth units
As mentioned in our previous announcements, we continue to develop new business streams from the highly skilled staff within the business. We channel their entrepreneurial ethos and encourage them to lead the business units in maturing our services into commercial enterprises.
The Digital Print Partnership ("DPP") - "Wholesale print online" - our trade only business has seen customer numbers increase from a standing start to 364 in the first six months. Sales have risen steadily since launch with October's sales reaching approximately £45,000. New customers are being consistently added at a rate of more than 30 per month through an efficient sales effort driven by cost-effective direct mail and email campaigns. We believe the partnership has the ability to be a standalone enterprise in 2010/11 and we are looking to expand the franchise outside of the UK. The service offers small print companies and design agencies access to cost-effective print services online. Customers have an average order value of £40-£50 and all orders are produced and dispatched from our state of the art printing facilities.
Zui - "Revolutionary Business Software" - our joint venture with De Villiers Walton. In May 2009 we won our first major contract with Scottish and Newcastle for a project led by De Villiers Walton. The project is currently in a test phase but has been received very well. We expect each project secured by Zui to be of material impact to the Tangent business as our engagements are at enterprise level. With the Scottish & Newcastle case study we now have an active market application as a reference and will be aggressively pursuing further inroads into the software services market.
In line with last year, the Directors have not declared the payment of an interim dividend.
Note on cash flow
Our cash flow from operations was negative by £0.30m during the period despite a profit before tax of £0.19m. This was principally because there was a £0.67m increase in operating debtors caused by the sales in the months immediately preceding the half year end at 31 August 2009 (July and August sales were £2.69m) being significantly greater than the sales in the months immediately preceding the last year end at 28 February 2009 (January and February sales were £2.05m).
Outlook
The second half of the year has continued to see budgets return to all key areas of the business. We are optimistic that the future is positive for a technology-led marketing services company that has now started to win and deliver high value enterprise level engagements and the outlook for the rest of the year is in line with management's expectations.
Nicholas Green and Timothy Green
Joint chief executives
26 November 2009
Consolidated income statement
for the half-year ended 31 August 2009
|
Half-year |
Half-year |
Year |
||
|
ended |
ended |
ended |
||
|
31 August |
31 August |
28 February |
||
|
2009 |
2008 |
2009 |
||
|
(unaudited) |
(unaudited) |
(audited) |
||
|
Notes |
£000 |
£000 |
£000 |
|
|
Revenue |
8,509 |
8,843 |
15,607 |
|
|
Cost of sales |
(4,442) |
(4,806) |
(8,576) |
|
|
Gross profit |
4,067 |
4,037 |
7,031 |
|
|
Operating expenses |
(3,722) |
(3,232) |
(6,183) |
|
|
Underlying operating profit |
345 |
805 |
848 |
|
|
Group restructuring expenses |
4 |
(161) |
(345) |
(397) |
|
Operating profit |
184 |
460 |
451 |
|
|
Finance income |
5 |
47 |
72 |
|
|
Profit before tax |
189 |
507 |
523 |
|
|
Tax |
(70) |
(206) |
(219) |
|
|
Profit for the period |
119 |
301 |
304 |
|
|
Earnings per share (pence) |
5 |
|||
|
Basic |
0.07 |
0.18 |
0.18 |
|
|
Diluted |
0.07 |
0.17 |
0.17 |
|
|
Underlying basic |
0.14 |
0.34 |
0.37 |
|
|
Underlying diluted |
0.13 |
0.32 |
0.35 |
The results shown above relate to continuing operations and are attributable to equity shareholders of the company.
Consolidated statement of changes in equity
for the half-year ended 31 August 2009
|
Retained |
||||||
|
Share |
Share |
Merger |
Other |
earnings/ |
Total |
|
|
capital |
premium |
reserve |
reserves |
(losses) |
equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
Half-year ended 31 August 2009 |
||||||
|
At 1 March 2009 |
1,702 |
- |
917 |
2,837 |
14,132 |
19,588 |
|
Equity dividend |
- |
- |
- |
- |
(338) |
(338) |
|
Share-based payment charge |
- |
- |
- |
11 |
- |
11 |
|
Issue of shares |
3 |
9 |
- |
- |
- |
12 |
|
Profit for the period |
- |
- |
- |
- |
119 |
119 |
|
At 31 August 2009 |
1,705 |
9 |
917 |
2,848 |
13,913 |
19,392 |
|
Half-year ended 31 August 2008 |
||||||
|
At 1 March 2008 |
1,660 |
- |
459 |
3,108 |
14,157 |
19,384 |
|
Equity dividend |
- |
- |
- |
- |
(329) |
(329) |
|
Share-based payment charge |
- |
- |
- |
206 |
- |
206 |
|
Issue of shares |
42 |
- |
458 |
(500) |
- |
- |
|
Profit for the period |
- |
- |
- |
- |
301 |
301 |
|
At 31 August 2008 |
1,702 |
- |
917 |
2,814 |
14,129 |
19,562 |
|
Year ended 28 February 2009 |
||||||
|
At 1 March 2008 |
1,660 |
- |
459 |
3,108 |
14,157 |
19,384 |
|
Share-based payment charge |
- |
- |
- |
229 |
- |
229 |
|
Issue of shares |
42 |
- |
458 |
(500) |
- |
- |
|
Profit for the period |
- |
- |
- |
- |
304 |
304 |
|
At 28 February 2009 |
1,702 |
- |
917 |
2,837 |
14,132 |
19,588 |
Consolidated statement of financial position
at 31 August 2009
|
31 August |
31 August |
28 February |
||
|
2009 |
2008 |
2009 |
||
|
(unaudited) |
(unaudited) |
(audited) |
||
|
£000 |
£000 |
£000 |
||
|
Assets |
||||
|
Non-current assets |
||||
|
Intangible assets - goodwill |
14,961 |
14,961 |
14,961 |
|
|
Other intangible assets |
64 |
- |
- |
|
|
Property, plant and equipment |
1,643 |
1,600 |
1,685 |
|
|
16,668 |
16,561 |
16,646 |
||
|
Current assets |
||||
|
Inventories |
107 |
170 |
106 |
|
|
Trade and other receivables |
3,827 |
4,190 |
3,191 |
|
|
Cash and cash equivalents |
1,751 |
2,526 |
2,801 |
|
|
5,685 |
6,886 |
6,098 |
||
|
Total assets |
22,353 |
23,447 |
22,744 |
|
|
Liabilities |
||||
|
Current liabilities |
||||
|
Borrowings |
(62) |
(74) |
(63) |
|
|
Trade and other payables |
(2,523) |
(3,135) |
(2,664) |
|
|
Current tax liabilities |
(309) |
(353) |
(148) |
|
|
Provisions |
- |
(166) |
(166) |
|
|
(2,894) |
(3,728) |
(3,041) |
||
|
Non-current liabilities |
||||
|
Borrowings |
(56) |
(118) |
(87) |
|
|
Deferred tax |
(11) |
(39) |
(28) |
|
|
(67) |
(157) |
(115) |
||
|
Total liabilities |
(2,961) |
(3,885) |
(3,156) |
|
|
Net assets |
19,392 |
19,562 |
19,588 |
|
|
Equity |
||||
|
Share capital |
1,705 |
1,702 |
1,702 |
|
|
Share premium |
9 |
- |
- |
|
|
Merger reserve |
917 |
917 |
917 |
|
|
Other reserves |
2,848 |
2,814 |
2,837 |
|
|
Retained earnings |
13,913 |
14,129 |
14,132 |
|
|
Total equity - attributable to equity shareholders of the company |
19,392 |
19,562 |
19,588 |
|
Consolidated cash flow statement
for the half-year ended 31 August 2009
|
Half-year |
Half-year |
Year |
|||
|
ended |
ended |
ended |
|||
|
31 August |
31 August |
28 February |
|||
|
2009 |
2008 |
2009 |
|||
|
(unaudited) |
(unaudited) |
(audited) |
|||
|
Notes |
£000 |
£000 |
£000 |
||
|
Operating activities |
|||||
|
Cash flow from operations |
7 |
(296) |
743 |
1,600 |
|
|
Interest paid |
(3) |
(8) |
(13) |
||
|
Tax received/(paid) |
73 |
(160) |
(378) |
||
|
Net cash flow from operating activities |
(226) |
575 |
1,209 |
||
|
Investing activities |
|||||
|
Payment of contingent consideration |
(166) |
(167) |
(167) |
||
|
Purchase of property, plant and equipment |
(244) |
(251) |
(618) |
||
|
Purchase of intangible assets |
(75) |
- |
- |
||
|
Sale of property, plant and equipment |
11 |
25 |
48 |
||
|
Interest received |
8 |
55 |
83 |
||
|
Net cash used in investing activities |
(466) |
(338) |
(654) |
||
|
Financing activities |
|||||
|
Dividends paid |
6 |
(338) |
(329) |
(329) |
|
|
Repayment of borrowings |
(32) |
(46) |
(89) |
||
|
Proceeds from issue of shares, net of costs |
12 |
- |
- |
||
|
Net cash used in financing activities |
(358) |
(375) |
(418) |
||
|
Net (decrease)/increase in cash and cash equivalents |
(1,050) |
(138) |
137 |
||
|
Cash and cash equivalents at beginning of period |
2,801 |
2,664 |
2,664 |
||
|
Cash and cash equivalents at end of period |
1,751 |
2,526 |
2,801 |
||
Notes to the financial information
for the half-year ended 31 August 2009
1. Basis of preparation
This consolidated half-yearly financial information, which is condensed and unaudited for the half-year ended 31 August 2009, has been prepared in accordance with the accounting policies which the group expects to adopt in its next annual report and is consistent with those adopted in the consolidated financial statements for the year ended 28 February 2009, except for the adoption of IFRS 8: Operating Segments and IAS 1: Presentation of Financial Statements (Revised 2007). IFRS 8 requires disclosure of information about the group's operating segments. Adoption of this standard did not have any effect on the financial position or performance of the group. IAS 1 makes certain changes to the format and titles of the primary financial statements and the presentation of some items within these statements and gives rise to additional disclosures. These accounting policies are based on the EU-adopted International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations that the group expects to be applicable at that time. This consolidated half-yearly information for the half-year ended 31 August 2009 has been prepared in accordance with IAS 34: Interim Financial Reporting, as adopted by the EU and under the historical cost convention.
The information relating to the half-years ended 31 August 2009 and 31 August 2008 is unaudited and does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. It has, however, been reviewed by the auditors and their report is set out at the end of this document. The comparative figures for the year ended 28 February 2009 have been extracted from the consolidated financial statements, on which the auditors gave an unqualified opinion and did not include a statement under section 237 (2) or (3) of the Companies Act 1985. The annual report and accounts for the year ended 28 February 2009 has been filed with the Registrar of Companies.
The group's financial risk management objectives and policies are consistent with those disclosed in the annual report and accounts 2009.
The half-yearly report was approved by the board of directors on 26 November 2009.
The half-yearly report is available on Tangent's website, www.tangentplc.com, and is being sent to shareholders. Further copies are available at the Tangent's registered office, 84-86 Great Portland Street, London W1W 7NR.
2. Business segments
In adopting IFRS 8: Operating Segments for the first time, the group has disclosed two reportable segments: Online and Direct. This disclosure correlates with the information that is presented to the group's chief decision maker, the board of directors, which reviews revenue and operating profits by segment but assets at a consolidated level.
Online comprises the Tangent One and Tangent Labs businesses and Direct comprises Tangent Direct, Ravensworth and Tangent On Demand. The Direct segment has a significant property-related sales element, which is separately disclosed. Central costs are not allocated to specific segments, but are included below to reconcile the segmental information to the consolidated information. Central costs include the share-based payment charge as set out in note 3.
|
Online |
Direct |
Central |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
Half-year ended 31 August 2009 |
||||
|
Property-related revenue |
- |
2,614 |
- |
2,614 |
|
Other revenue |
2,008 |
3,887 |
- |
5,895 |
|
Total revenue |
2,008 |
6,501 |
- |
8,509 |
|
Underlying operating profit |
419 |
382 |
(456) |
345 |
|
Half-year ended 31 August 2008 |
||||
|
Property-related revenue |
- |
3,538 |
- |
3,538 |
|
Other revenue |
1,360 |
3,945 |
- |
5,305 |
|
Total revenue |
1,360 |
7,483 |
- |
8,843 |
|
Underlying operating profit |
494 |
1,014 |
(703) |
805 |
|
Year ended 28 February 2009 |
||||
|
Property-related revenue |
- |
5,195 |
- |
5,195 |
|
Other revenue |
2,877 |
7,535 |
- |
10,412 |
|
Total revenue |
2,877 |
12,730 |
- |
15,607 |
|
Underlying operating profit |
1,013 |
1,038 |
(1,203) |
848 |
3. Share options and share-based payment charge
The total share-based payment charge for the period was £11,000 (half-year ended 31 August 2008: £206,000 and year ended 28 February 2009: £229,000). This charge is not material and so has been included within operating expenses as was stated in the previous annual report and accounts as the future treatment. In previous periods, when the share-based payment charge was significantly larger, it was excluded from underlying operating profit. Comparative amounts for operating expenses and underlying operating profit have been amended for this change.
The movements in share options and the corresponding weighted average exercise prices (WAEP) are summarised below:
|
Number |
WAEP |
|
|
000 |
Pence |
|
|
At 1 March 2009 |
15,310 |
4.58 |
|
Share options granted |
3,155 |
1.00 |
|
Share options exercised |
(300) |
4.00 |
|
At 31 August 2009 |
18,165 |
3.96 |
For the share options outstanding at 31 August 2009 exercise prices ranged between 1p and 13.25p per share and the weighted average remaining contractual life was 4.73 years. The company's share price varied between 2.38p and 6.25p during the period.
The fair value of share options granted in the period was calculated using a Black-Scholes option pricing model. The volatility, measured as the standard deviation of expected share price return, is based on statistical analysis of the Tangent share price since July 2005 which resulted in an assumed volatility of 40%. The other key inputs were a risk free interest rate of 0.5%, a dividend yield of 6% and an expected life of 5 years. The options granted during the period are subject to vesting conditions and it was assumed that 15% of the options granted during the period will vest.
There were 300,000 employee share options exercised during the period at an exercise price of 4p per share.
4. Group restructuring
The board restructured and relocated accounting and administrative support from Cheltenham to the Newcastle site during the period which resulted in employee redundancies. The redundancy costs of restructuring are not part of the normal operating expenses of Tangent and they have therefore been separately identified in the income statement and excluded the costs of £161,000 from underlying operating profit.
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the following:
|
Half-year |
Half-year |
Year |
|
|
ended |
ended |
ended |
|
|
31 August |
31 August |
28 February |
|
|
2009 |
2008 |
2009 |
|
|
£000 |
£000 |
£000 |
|
|
Profit attributable to shareholders |
119 |
301 |
304 |
|
Group restructuring expenses net of tax |
116 |
259 |
306 |
|
Underlying profit attributable to shareholders |
235 |
560 |
610 |
|
Number |
Number |
Number |
|
|
000 |
000 |
000 |
|
|
Weighted average number of shares: |
|||
|
For basic earnings per share |
168,761 |
165,127 |
166,902 |
|
Adjustment for options outstanding |
5,739 |
6,850 |
5,078 |
|
Adjustment for contingent shares |
4,158 |
4,158 |
4,158 |
|
For diluted earnings per share |
178,658 |
176,135 |
176,138 |
|
Half-year |
Half-year |
Year |
|
|
ended |
ended |
ended |
|
|
31 August |
31 August |
28 February |
|
|
2009 |
2008 |
2009 |
|
|
Pence |
Pence |
Pence |
|
|
per share |
per share |
per share |
|
|
Earnings per share: |
|||
|
Basic |
0.07 |
0.18 |
0.18 |
|
Underlying basic |
0.14 |
0.34 |
0.37 |
|
Diluted |
0.07 |
0.17 |
0.17 |
|
Underlying diluted |
0.13 |
0.32 |
0.35 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. Tangent has two categories of dilutive potential ordinary shares: share options and shares contingently issuable as consideration for an acquisition.
A calculation is performed for the share options to determine the number of shares that could have been acquired at fair value based on the monetary value of the subscription rights attached to the outstanding share options. The number of shares from this calculation is compared with the number of shares that would have been issued assuming the exercise of the options and the difference is deemed to be the number of dilutive shares attributable to share options.
The estimated number of shares that will be issued in the future as purchase consideration for current subsidiaries is deemed to be the number of dilutive shares issuable as consideration for acquisitions.
6. Dividends
Equity dividends on ordinary shares were paid as follows:
|
Half-year |
Half-year |
Year |
|
|
ended |
ended |
ended |
|
|
31 August |
31 August |
28 February |
|
|
2009 |
2008 |
2009 |
|
|
£000 |
£000 |
£000 |
|
|
Dividend for the year ended 28 February 2008 of 0.2p per share |
- |
329 |
329 |
|
Dividend for the year ended 28 February 2009 of 0.2p per share |
338 |
- |
- |
The Tangent employee share ownership trust holds 1,428,340 shares and it has waived its right to receive dividends.
The dividend for the year ended 28 February 2009 was approved by shareholders at the annual general meeting on 28 July 2009 and was paid on 26 August 2009.
7. Cash flow from operations
|
Half-year |
Half-year |
Year |
|
|
ended |
ended |
ended |
|
|
31 August |
31 August |
28 February |
|
|
2009 |
2008 |
2009 |
|
|
£000 |
£000 |
£000 |
|
|
Profit before tax for the period |
189 |
507 |
523 |
|
Depreciation |
278 |
270 |
519 |
|
Amortisation |
11 |
- |
- |
|
(Profit)/loss on sale of plant and equipment |
(3) |
(7) |
5 |
|
Net interest income |
(5) |
(47) |
(72) |
|
Share-based payment charge |
11 |
206 |
229 |
|
Increase in inventories |
(1) |
(75) |
(11) |
|
(Increase)/decrease in trade and other receivables |
(666) |
134 |
1,133 |
|
(Decrease) in trade and other payables |
(110) |
(245) |
(726) |
|
Cash (used in)/generated from operations |
(296) |
743 |
1,600 |
8. Analysis of net funds
|
1 March |
Cash |
31 August |
|
|
2009 |
flows |
2009 |
|
|
£000 |
£000 |
£000 |
|
|
Cash |
2,801 |
(1,050) |
1,751 |
|
Finance leases |
(150) |
32 |
(118) |
|
Net funds |
2,651 |
(1,018) |
1,633 |
Independent review report by the auditors
to Tangent Communications plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the half-year ended 31 August 2009 which comprises the consolidated income statement, consolidated statement of changes in equity, consolidated statement of financial position, consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules For Companies.
As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of 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 to believe that the condensed set of financial statements in the half-yearly financial report for the half-year ended 31 August 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the AIM Rules For Companies.
UHY Hacker Young LLP
Chartered Accountants
London
26 November 2009
Notes
1. The maintenance and integrity of the Tangent Communications plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the half-yearly report or the auditors' review report since they were initially presented on the website.
2. Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.
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