TIDMEDD
RNS Number : 4550M
Education Development Intl PLC
25 May 2010
EDUCATION DEVELOPMENT INTERNATIONAL PLC
INTERIM RESULTS
Education Development International plc ("EDI"), the leading provider of
educational qualifications and assessment services, announces its Interim
Results for the six months ended 31 March 2010.
Financial Highlights
· Revenue up by 5.2% to GBP13.44m (2009: GBP12.78m).
· Operating profit GBP3.89m (2009: GBP3.64m).
· Adjusted operating profit* up 8.1% to GBP4.27m (2009: GBP3.95m).
· Basic earnings per share 5.6p (2009: 5.3p).
· Adjusted earnings per share+ up 7.0% to 6.1p (2009: 5.7p).
· Net cash generated from operations GBP3.08m (2009: GBP2.86m).
· Net cash GBP7.43m (2009: GBP5.80m).
· Interim dividend 0.8p per share (2009: 0.4p).
* Profit on ordinary activities before taxation adjusted for the amortisation
charge on acquired intangible assets.
+ Adjusted earnings per share is based on adjusted operating profit taxed at the
current effective rate.
Other highlights
· 1.5% of EDI share capital purchased into treasury and subsequently
cancelled
· Acquisition of Peter Honey Publications Limited.
· Achieved Investors in People accreditation.
Commenting on the results, EDI Chief Executive, Nigel Snook said:
"Performance during the first half of the year demonstrates that we have been
able to consolidate the significant gains made in the same period last year. In
the UK we have made progress in the vocational qualifications market and our
international business continues to grow.
"While there are uncertainties in the UK market as a result of pressure on
public funds there are positive early signs of the government's support for
vocational education. We are continuing to invest in our staff and systems to
reinforce the quality or our business and its capacity to grow."
For further information please contact:
+----------------------------------+----------------------------------+
| Education Development | Walbrook PR Limited |
| International plc | |
+----------------------------------+----------------------------------+
| Nigel Snook - Chief Executive | Paul McManus |
| Paul Bird - Finance Director | |
+----------------------------------+----------------------------------+
| | Tel: 020 7933 8787 |
+----------------------------------+----------------------------------+
| Tel: 024 7651 6510 | Mob: 07980 541893 |
+----------------------------------+----------------------------------+
| www.ediplc.com | paul.mcmanus@walbrookpr.com |
+----------------------------------+----------------------------------+
| | |
+----------------------------------+----------------------------------+
| Brewin Dolphin Investment | |
| Banking | |
+----------------------------------+----------------------------------+
| Richard Jones/Neil McDonald | |
+----------------------------------+----------------------------------+
| Tel: 0845 213 4217 | |
+----------------------------------+----------------------------------+
CHAIRMAN'S STATEMENT
Overview
During the first half of 2009/10, Education Development International (EDI) has
consolidated the significant gains made over the same period last year. We have
now embarked on a strategic investment programme to drive and support future
growth.
Results
Revenue has increased by 5.2% with unaudited results for the six month period to
31 March 2010 showing a turnover of GBP13.44m (2009: GBP12.78m).
Operating profit for the period was GBP3.89m (2009: GBP3.64m). Adjusted
operating profit for the period increased by 8.1% to GBP4.27m (2009:
GBP3.95m).This comprises profit on ordinary activities before taxation adjusted
for the amortisation charge on acquired intangible assets.
Adjusted earnings per share amounted to 6.1p (2009: 5.7p), an increase of 7.0%.
Operating cash inflow for the period was GBP3.08m (2009: GBP2.86m). Corporation
tax was incurred at the full rate and, after the costs of acquisitions, share
purchases and dividends, at 31 March 2010 net cash stood at GBP7.43m (2009:
GBP5.80m).
These results include the benefits from the acquisition of Peter Honey
Publications Limited (PHP) on 1 February 2010.
The segmental analysis of revenue for the six months to 31 March 2010 shows
(GBPm):
+--------------------------------+----+--+-------+----------+--+--------+
| | 2010 | 2009 |
+--------------------------------+---------------+----------------------+
| UK qualifications and | 8.70 | 8.56 |
| assessment services | | |
+--------------------------------+---------------+----------------------+
| International qualifications | 3.13 | 2.70 |
| services | | |
+--------------------------------+---------------+----------------------+
| Support and broadband services | 1.56 | 1.48 |
+--------------------------------+---------------+----------------------+
| Other | 0.05 | 0.04 |
+-------------------------------------+----------+----------------------+
| Total | 13.44 | | | 12.78 |
+----------------------------------------+-------+----------+--+--------+
| | | | | | | |
+--------------------------------+----+--+-------+----------+--+--------+
UK Qualifications and Assessment Services
Overall sales at GBP8.70m are just ahead of the level achieved in the same
period last year when we reported growth of 59%. This total includes sales of
GBP83,000 from PHP.
Sales of vocational qualifications are up by 2.1% following growth of 70% in the
comparable period last year. As anticipated, sales of the Road Passenger
Transport qualification for taxi drivers have fallen back closer to the historic
level. If these sales are excluded from the total, then the underlying level of
growth in vocational qualifications sales is 8.4%.
This performance reflects our continuing drive to grow market share with 144 new
customers secured during the period and existing customers registering to offer
qualifications, in total, across 455 additional areas. This increased customer
base provides a sound foundation for future growth.
The overall market level of demand for vocational qualifications over the past
year has reduced. This is mainly as a result of action taken by the Learning
and Skills Council in England to balance out budget overspends which were
authorised in late 2008/early 2009 to offset the worst effects of the recession.
All awarding bodies and accredited organisations have had to respond to
significant changes in the way in which the Government's regulatory body,
Ofqual, accredits vocational qualifications and to its plans to introduce new
qualifications to assess key skills. While unavoidable, these requirements have
been a distraction from the customer focused product development programme.
These regulatory developments and the associated changes to the way in which
qualifications are to be funded in future - when taken with changes to the
structure of funding bodies in England - have been unsettling for training
providers and further education colleges. This has led to a more cautious
approach being taken on timing the recruitment and registration of learners
during the period covered by this report.
With the advent of a new government there are positive signs that investment in
front-line vocational training programmes will be a priority. In his
announcement on managing the public sector deficit (24 May) the Chancellor of
the Exchequer outlined plans for an increase in funding for apprenticeships and
further education, and confirmed the current budgets for 16 to 19 education and
training. While we expect there to be a period of some uncertainty in the
development of the market until government policy is clarified, this is an
encouraging indication for the long-term development of vocational and
work-based learning programmes.
As part of our profile raising activities, we have entered into a partnership
with the Confederation of British Industry to sponsor its annual skills survey,
the latest edition of which was published on 17 May. In addition, we have
strengthened our links with other representative bodies, including the
Association of Learning Providers, the Association of Colleges and the Institute
of Directors.
International Qualifications Services
Sales have increased by 15.9% to GBP3.13m (2009: GBP2.70m). On a currency
adjusted basis, the underlying increase in revenue was 15.3%. To take advantage
of current favourable exchange rates, we have extended our hedging arrangements
to 30 June 2013.
Numbers of candidates registered for our LCCI International Qualifications has
increased by some 20% compared with the same period last year and all the main
markets are performing broadly in line with or ahead of our expectations. Joint
programmes with government agencies in Malaysia, Hong Kong, China and Germany
are contributing additional growth. This is a pleasing result as it
demonstrates the benefits of the additional resources we have invested in this
area of the business over the past 12 months.
The international business, which annually accounts for around 25% of revenue,
continues to be an important area for development. We plan to allocate more
resources here because the huge size of the international education market
offers the potential for consistent long-term growth.
The additional appointments we have made to our international business
development team allow us to spend more time supporting our agents and customers
face-to-face, and undertaking development visits to new or potential markets.
We have continued to extend our range of support materials for tutors and
students, and launched a further upgrade of our international website in
February. The website is now an important and powerful means of providing
regular and consistent communications and support direct to the thousands of
schools, colleges and training organisations around the world who use our
services.
Support Services
Sales are up 5.4% at GBP1.56m (2009: GBP1.48m). The main focus of this area of
the business is marketing i-assess, our secure online testing platform, and
sales are up by 22.6% at GBP802,000 (2009: GBP654,000). This performance has
benefited from one-off income of GBP96,000 in respect of software development
commissioned by one of the main customers.
We continue with our strategy of moving away from administrative support work
and only one client now remains. This contract contributed revenue of
GBP290,000 (2009: GBP372,000).
Sales of broadband services were marginally ahead at GBP472,000 (2009:
GBP452,000).
Organisation Development and Staff
The major IT project to upgrade our Campus operating system is now well
underway. During the second half of the year we will begin to introduce new
features as they become available.
Alongside our existing ISO 9000/2008 accreditation, we are now working towards
the BS 8855 environmental management standard to reinforce our commitment to
sound environmental policies.
We have continued to strengthen and develop our team of permanent staff which
now numbers 187 (2009:156). Our efforts in this area were recognised when in
December 2009 we achieved formal accreditation under the Investors in People
standard. We have also upgraded our support arrangements for our network of
associates which now totals over 250 people.
The Board is pleased to take this opportunity to acknowledge and thank all of
our staff and our associates and agents for their hard work and commitment.
Dividend and Share Buy-Back
Taking into account the continuing strong financial performance of the Group,
the Board believes it is appropriate to increase the interim dividend to 0.8p
per share (2009: 0.4p). This reflects our policy of tracking progress in profit
before tax at an annual rate of cover of around 8 times. The dividend will be
payable on 2 July 2010 to shareholders on the register on 4 June 2010.
In our 2009 Interim Report we set out the Board's policy in relation to the
buying in of the Company's shares. During the period covered by this report the
Company's Employee Benefit Trust purchased 795,000 shares and now holds
4,255,476 shares representing 7.4% of the issued share capital. This holding
provides 75% cover for current share options contracts.
During March 2010 we purchased into treasury and subsequently cancelled 850,000
shares, representing 1.5% of the share capital at that time.
The Board believes that its approach to dividend growth and using surplus cash,
from time-to-time, to buy in shares - either to hold in treasury or to cancel -
offers a sensible balance between these options for using a proportion of the
Company's cash balance to return value to shareholders. We are also mindful of
the benefits of maintaining a strong cash balance, particularly as we continue
to seek acquisition opportunities.
Prospects
EDI is now well established as a leading provider of vocational qualifications -
both in the UK and abroad - and our customer base and range of services continue
to increase. We are investing in our staff and systems to reinforce the quality
of the business and its capacity to grow.
In the UK market our particular expertise lies in supporting apprenticeship and
work-based learning programmes and prior to the General Election, all political
parties were strongly supportive of these. In the first major announcement on
managing the public sector deficit, the government indicated a major investment
in apprenticeships and further education, and confirmed the current budget for
16 to 19 education and training. While cautious until the government makes the
details of its policy clear, we remain competitively well placed to deal with
any likely situation.
Internationally, we are making progress in growing our well established and well
regarded range of business and English language qualifications and this presents
an important development opportunity.
Taking into account these factors and the Company's performance over the past
six months, the Board is confident that EDI will perform in-line with
expectations.
Richard Price
Chairman
25 May 2010
CONSOLIDATED INCOME STATEMENT
For the Period Ended 31 March 2010
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | 31 | | 31 | | 30 Sept |
| | | | March | | March | | 2009 |
| | | | 2010 | | 2009 | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | (6 | | (6 | | (12 |
| | | | months) | | months) | | months) |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| |Note | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| CONTINUING | | | | | | | |
| OPERATIONS | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Revenue | 3 | | 13,441 | | 12,782 | | 28,348 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Cost of sales | | | (3,012) | | (3,092) | | (7,111) |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Gross profit | | | 10,429 | | 9,690 | | 21,237 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Administrative | | | (6,537) | | (6,054) | | (13,185) |
| expenses | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Operating profit | 3 | | 3,892 | | 3,636 | | 8,052 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Finance income | | | 84 | | 21 | | 77 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Finance costs | | | (23) | | (17) | | (99) |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Net finance | | | 61 | | 4 | | (22) |
| income/(costs) | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Profit on ordinary | | | 3,953 | | 3,640 | | 8,030 |
| activities before | | | | | | | |
| taxation | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Tax charge on profit | 4 | | (940) | | (783) | | (1,992) |
| on ordinary | | | | | | | |
| activities | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Profit for the | | | 3,013 | | 2,857 | | 6,038 |
| period | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Attributable to: | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| - Equity holders of | | | 3,011 | | 2,860 | | 6,046 |
| the parent | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| - Non-controlling | | | 2 | | (3) | | (8) |
| interests | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | 3,013 | | 2,857 | | 6,038 |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| Earnings per share | 6 | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| From continuing | | | | | | | |
| operations | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| - Basic | | | 5.64p | | 5.34p | | 11.32p |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| - Diluted | | | 5.30p | | 5.06p | | 10.63p |
+----------------------+------+----------+---------+----------+---------+----------+----------+
| | | | | | | | |
+----------------------+------+----------+---------+----------+---------+----------+----------+
CONSOLIDATED BALANCE SHEET
At 31 March 2010
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | Note | | 31 | | 31 | | 30 |
| | | | | March | | March | | Sept |
| | | | | 2010 | | 2009 | | 2009 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Non-current assets | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Goodwill | | | | 8,012 | | 7,234 | | 7,181 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Other intangible | | | | 1,209 | | 1,151 | | 802 |
| assets | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Property, plant and | | | | 514 | | 297 | | 373 |
| equipment | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Investments | | | | 615 | | 555 | | 670 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Deferred tax assets | | | | 1,002 | | 1,093 | | 1,207 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | 11,352 | | 10,330 | | 10,233 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Current assets | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Inventories | | | | 104 | | 68 | | 75 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Trade and other | | | | 3,946 | | 3,896 | | 3,187 |
| receivables | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Assets available for | | | | - | | 984 | | - |
| sale - Gilts | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Financial assets | | | | 27 | | 5 | | 22 |
| carried at fair | | | | | | | | |
| value through profit | | | | | | | | |
| and loss | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Cash and cash | | | | 7,434 | | 4,818 | | 9,492 |
| equivalents | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | 11,511 | | 9,771 | | 12,776 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Total assets | | | | 22,863 | | 20,101 | | 23,009 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Current liabilities | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Trade and other | | | | (4,656) | | (5,069) | | (4,975) |
| payables | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Financial | | | | (317) | | (27) | | (49) |
| liabilities carried | | | | | | | | |
| at fair value | | | | | | | | |
| through profit and | | | | | | | | |
| loss | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Current tax | | | | (1,027) | | (566) | | (724) |
| liabilities | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Provisions | | | | (43) | | (62) | | (75) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | (6,043) | | (5,724) | | (5,823) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Non-current | | | | | | | | |
| liabilities | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Provisions | | | | - | | (46) | | (29) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Retirement benefit | | | | (584) | | (867) | | (612) |
| obligations | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Deferred tax | | | | (211) | | (252) | | (166) |
| liabilities | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Other non-current | | | | (116) | | (179) | | (104) |
| liabilities | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | (911) | | (1,344) | | (911) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Total liabilities | | | | (6,954) | | (7,068) | | (6,734) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Net assets | | | | 15,909 | | 13,033 | | 16,275 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Equity | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Share capital | | | | 568 | | 576 | | 576 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Share premium | | | | 3,024 | | 2,997 | | 3,024 |
| account | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Capital redemption | | 8 | | 8 | | - | | - |
| reserve | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Cash flow hedge | | | | (291) | | - | | - |
| reserve | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Own shares held | | 8 | | (2,570) | | (840) | | (1,534) |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Merger reserve | | | | 994 | | 994 | | 994 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Other reserves | | | | 212 | | 212 | | 212 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Retained earnings | | | | 13,950 | | 9,076 | | 12,990 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Total shareholders' | | | | 15,895 | | 13,015 | | 16,262 |
| equity | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Non-controlling | | | | 14 | | 18 | | 13 |
| interest in equity | | | | | | | | |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
| Total equity | | | | 15,909 | | 13,033 | | 16,275 |
+----------------------+--+------+----------+---------+----------+---------+-+---------+
CONSOLIDATED CASH FLOW STATEMENT
For the Period Ended 31 March 2010
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| | |Note | | 31 | | 31 | | 30 Sept |
| | | | | March | | March | | 2009 |
| | | | | 2010 | | 2009 | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| | | | | (6 | | (6 | | (12 |
| | | | | months) | | months) | | months) |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| | | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Net cash generated from | 9 | | 3,083 | | 2,857 | | 8,463 |
| operations | | | | | | | |
+--------------------------+------+--+---------+----------+---------+----------+---------+
| Interest received | | | | 13 | | 21 | | 55 |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Tax paid - net | | | | (724) | | (6) | | (631) |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Net cash generated from | | 2,372 | | 2,872 | | 7,887 |
| operating activities | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Cash flows from | | | | | | | |
| investing activities | | | | | | | |
+--------------------------+------+--+---------+----------+---------+----------+---------+
| Acquisitions of | | | | | | | | |
| businesses: | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| - Consideration | | 7 | | (1,163) | | - | | - |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| - Cash acquired | | 7 | | 134 | | - | | - |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Payment of deferred | | - | | - | | (82) |
| consideration | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Purchase of intangible assets | | (319) | | - | | (101) |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Purchase of property, plant | | (271) | | (95) | | (264) |
| and equipment | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Proceeds from sale of | | - | | 2 | | 2 |
| property, plant and equipment | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Purchase of available for sale | | - | | (984) | | - |
| assets - Gilts | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Purchase of | | | | - | | (120) | | (120) |
| investments | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Net cash used in | | | (1,619) | | (1,197) | | (565) |
| investing activities | | | | | | | |
+--------------------------+------+--+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Cash flows from | | | | | | | |
| financing activities | | | | | | | |
+--------------------------+------+--+---------+----------+---------+----------+---------+
| Repurchase of own | | | | (2,174) | | - | | (694) |
| shares | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Dividend paid | | | | (650) | | (173) | | (403) |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Net cash used in financing | | (2,824) | | (173) | | (1,097) |
| activities | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Net (decrease)/increase in | | (2,071) | | 1,502 | | 6,225 |
| cash and cash equivalents | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
| Cash and cash equivalents at | | 9,492 | | 3,229 | | 3,229 |
| beginning of period | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Exchange gains on cash and | | 13 | | 87 | | 38 |
| cash equivalents | | | | | | |
+---------------------------------+--+---------+----------+---------+----------+---------+
| Cash and cash equivalents at | | 7,434 | | 4,818 | | 9,492 |
| end of period | | | | | | |
+----------------------+---+------+--+---------+----------+---------+----------+---------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Period Ended 31 March 2010
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | 31 | | 31 | | 30 Sept |
| | | | March | | March | | 2009 |
| | | | 2010 | | 2009 | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | (6 | | (6 | | (12 |
| | | | months) | | months) | | months) |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Profit for the | | | 3,013 | | 2,857 | | 6,038 |
| period | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Other comprehensive | | | | | | |
| (expense)/ income: | | | | | | |
+--------------------------+--+---------+----------+---------+----------+---------+
| Cash flow hedging | | | (291) | | - | | - |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Exchange differences | | | - | | (9) | | (4) |
| on translating | | | | | | | |
| foreign operations | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Actuarial losses on | | | (92) | | (394) | | (230) |
| defined benefit | | | | | | | |
| scheme | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Deferred tax | | | 26 | | 110 | | 64 |
| attributable to the | | | | | | | |
| actuarial losses | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| (Loss)/gain on | | | (55) | | 170 | | 285 |
| investments | | | | | | | |
| available for sale | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Other comprehensive | | (412) | | (123) | | 115 |
| (expense)/ income for | | | | | | |
| the period, net of tax | | | | | | |
+--------------------------+--+---------+----------+---------+----------+---------+
| Total comprehensive | | | 2,601 | | 2,734 | | 6,153 |
| income for the | | | | | | | |
| period | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| Attributable to: | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| - Equity holders of | | | 2,599 | | 2,737 | | 6,161 |
| the parent | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| - Non-controlling | | | 2 | | (3) | | (8) |
| interest | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | 2,601 | | 2,734 | | 6,153 |
+----------------------+---+--+---------+----------+---------+----------+---------+
| | | | | | | | |
+----------------------+---+--+---------+----------+---------+----------+---------+
STATEMENT OF CHANGES IN EQUITY
For the Period Ended 31 March 2010
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+--------------------+
| | | | | | Capital | | Cash | | Own | | | | | | | | Total |
| | | | | | | | flow | | | | | | | | | | share- |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | Share | | Share | | redemption | | hedge | | shares | | Merger | | Other | | Retained | holders' |
| | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+--------------------+
| | capital | | premium | | reserve | | reserve | | held | | Reserve | | reserves | | earnings | | equity |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| At 1 | 576 | | 3,024 | | - | | - | | (1,534) | | 994 | | 212 | | 12,990 | | 16,262 |
| October | | | | | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Dividend | - | | - | | - | | - | | - | | - | | - | | (650) | | (650) |
| paid | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Share based | - | | - | | - | | - | | - | | - | | - | | 86 | | 86 |
| payments | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Deferred | - | | - | | - | | - | | - | | - | | - | | (221) | | (221) |
| tax on | | | | | | | | | | | | | | | | | |
| share based | | | | | | | | | | | | | | | | | |
| payments | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Repurchase | - | | - | | - | | - | | (1,036) | | - | | - | | - | | (1,036) |
| of own | | | | | | | | | | | | | | | | | |
| shares | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Share | (8) | | - | | 8 | | - | | - | | - | | - | | (1,145) | | (1,145) |
| buybacks | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Transactions | (8) | | - | | 8 | | - | | (1,036) | | - | | - | | (1,930) | | (2,966) |
| with owners | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Profit for | - | | - | | - | | - | | - | | - | | - | | 3,011 | | 3,011 |
| the period | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Other comprehensive income: |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| Cash flow | - | | - | | - | | (291) | | - | | - | | - | | - | | (291) |
| hedges | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Actuarial | - | | - | | - | | - | | - | | - | | - | | (66) | | (66) |
| loss (net | | | | | | | | | | | | | | | | | |
| of deferred | | | | | | | | | | | | | | | | | |
| tax) | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Loss on | - | | - | | - | | - | | - | | - | | - | | (55) | | (55) |
| investments | | | | | | | | | | | | | | | | | |
| available | | | | | | | | | | | | | | | | | |
| for sale | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Total | - | | - | | - | | (291) | | - | | - | | - | | (121) | | (412) |
| comprehensive | | | | | | | | | | | | | | | | | |
| expense for | | | | | | | | | | | | | | | | | |
| the period | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| At 31 March | 568 | | 3,024 | | 8 | | (291) | | (2,570) | | 994 | | 212 | | 13,950 | | 15,895 |
| 2010 | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| STATEMENT OF CHANGES IN EQUITY (continued) | | | | | | | | | | |
| For the Period Ended 31 March 2010 | | | | | | | | | | |
| | | | | | | | | | | |
+-------------------------------------------------------------------------------------------------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+--------------------+
| | | | | | Capital | | Cash | | Own | | | | | | | | Total |
| | | | | | | | flow | | | | | | | | | | share- |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | Share | | Share | | redemption | | hedge | | shares | | Merger | | Other | | Retained | holders' |
| | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+--------------------+
| | capital | | premium | | reserve | | reserve | | held | | reserve | | reserves | | earnings | | equity |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| At 1 October 2008 | 576 | | 2,997 | | - | | - | | (840) | | 994 | | 212 | | 6,333 | | 10,272 |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Dividend paid | - | | - | | - | | - | | - | | - | | - | | (173) | | (173) |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Share based | - | | - | | - | | - | | - | | - | | - | | 45 | | 45 |
| payments | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Deferred tax on | - | | - | | - | | - | | - | | - | | - | | 134 | | 134 |
| share based | | | | | | | | | | | | | | | | | |
| payments | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Transactions with | - | | - | | - | | - | | - | | - | | - | | 6 | | 6 |
| owners | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Profit for the | - | | - | | - | | - | | - | | - | | - | | 2,860 | | 2,860 |
| period | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Other comprehensive income: |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| Exchange | - | | - | | - | | - | | - | | - | | - | | (9) | | (9) |
| differences on | | | | | | | | | | | | | | | | | |
| translating foreign | | | | | | | | | | | | | | | | | |
| operations | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Actuarial loss (net | - | | - | | - | | - | | - | | - | | - | | (284) | | (284) |
| of deferred tax) | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Gain on investments | - | | - | | - | | - | | - | | - | | - | | 170 | | 170 |
| available for sale | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| Total comprehensive | - | | - | | - | | - | | - | | - | | - | | (123) | | (123) |
| expense for the | | | | | | | | | | | | | | | | | |
| period | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| | | | | | | | | | | | | | | | | | |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
| At 31 March 2009 | 576 | | 2,997 | | - | | - | | (840) | | 994 | | 212 | | 9,076 | | 13,015 |
+---------------------+---------+----------+---------+----------+------------+----------+---------+----------+---------+----------+---------+----------+----------+----------+----------+----------+---------+
NOTES TO THE INTERIM REPORT
31 March 2010
1. Basis of preparation
This interim financial information has been prepared in accordance with
International Accounting Standard (IAS 34) 'Interim Financial Reporting' as
adopted by the European Union. The accounting policies applied in the
preparation of this financial information are consistent with those adopted in
the statutory accounts for the year ended 30 September 2009, except for the
adoption of IAS 1 Presentation of Financial Statements (Revised 2007), Amendment
to IFRS 2 Share-based payment, IFRS 3 (Revised) Business Combinations, IFRS 8
Operating Segments and the designation of certain financial instruments as cash
flow hedging in nature.
The adoption of IAS 1 (Revised 2007) does not affect the financial position or
profits of the Group, but gives rise to additional disclosures regarding the
presentation of owner changes in equity and introduces a 'Statement of
comprehensive income'. In accordance with the new standard the entity does not
present a 'Statement of recognised income and expenses (SORIE)', as was
presented in the 2009 consolidated financial statements and a 'Statement of
changes in equity' is presented.
The adoption of the amendment to IFRS 2 Share-based payments regarding potential
fair value adjustments to options containing 'non-vesting' conditions has not
had a material impact on the share option charge.
IFRS 3 (Revised) has been applied in full to the business combination in the
period.
The adoption of IFRS 8 has changed the way in which the segments that are
disclosed in the interim financial statements are identified requiring them to
be based on the internal management reporting information that is regularly
reviewed by the chief operating decision maker. The adoption of this standard
has not materially changed the Group's reportable segments.
The Group has designated certain forward currency contracts as hedging
instruments in cash flow hedge relationships. These arrangements have been
entered into to mitigate
currency exchange risk arising from certain legally binding sale orders
denominated in foreign currency.
All derivative financial instruments used for hedge accounting are recognised
initially at fair value and reported subsequently at fair value in the statement
of financial position. To the extent that the hedge is effective, changes in
the fair value of derivatives designated as hedging instruments in cash flow
hedges are recognised in other comprehensive income and included within the cash
flow hedge reserve in equity. Any ineffectiveness in the hedge relationship is
recognised immediately in profit or loss.
At the time the hedged item affects profit or loss, any gain previously
recognised in other comprehensive income is reclassified from equity to profit
or loss and presented as a reclassification adjustment within other
comprehensive income.
If a forecast transaction is no longer expected to occur or if the hedging
instrument becomes ineffective, any related gain or loss recognised in other
comprehensive income is transferred immediately to profit or loss.
The financial information shown is unaudited and does not constitute statutory
accounts within the meaning of Section 434(1) of the Companies Act 2006.
It should be noted that accounting estimates and assumptions are used in
preparation of the interim financial information. Although these estimates are
based on management's best knowledge and judgement of current events and
actions, actual results may ultimately differ from those estimates. The areas
involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the interim financial information, are set out
in Note 2 to the interim financial information.
The figures for the year ended 30 September 2009 were derived from the statutory
accounts for that period. The statutory accounts for the year ended 30 September
2009 have been delivered to the Registrar of Companies and received an audit
report which was unqualified and did not contain statements under Section 498(2)
or (3) of the Companies Act 2006.
This interim report was approved by the Board on 25 May 2010.
2. Accounting estimates and judgements
The key estimates and judgements made by management are detailed below:
Intangible assets acquired on acquisition of a subsidiary undertaking
The intangible assets acquired on the acquisition of a subsidiary undertaking
have been accounted for in accordance with IFRS 3 "Business combinations" and
IAS 38 "Intangible assets". The main area of judgement is the valuation of the
separate identifiable intangible assets acquired. These calculations have been
performed by an external valuer, with whom the Directors have agreed the
underlying assumptions to be applied. The key assumptions are the identification
of the material separate intangible assets acquired, forecast future cashflows
and the discount rate.
Deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future, against which the reversal of UK trading losses and temporary
differences can be deducted. Recognition, therefore, involves judgement
regarding the future financial performance of the particular group undertaking
in which the deferred tax asset has been recognised.
Defined benefit pension scheme
The Group's defined benefit pension scheme has been accounted for in accordance
with IAS 19 "Employee benefits". The main area of judgement is the valuation of
the pension scheme liabilities, which represent the net present value of
projected future pension payments. These calculations are performed by the
scheme actuary, with whom the Directors have agreed the underlying assumptions
to be applied. The key assumptions are rates of increase in pension benefits,
mortality rates, inflation and the discount rate applied to produce the net
present value. The discount rate is derived from market rates on AA corporate
bonds at the balance sheet date.
3. Segmental analysis
Analysis of revenue and result by business segment
+----------------+---------+----------+---------+----------+----------+------+----------+---------+----------+----------+------+----------+---------+-----+
| | Periods ended |
+----------------+----------------------------------------------------------------------------------------------------------------------------------------+
| | 31 March 2010 | | 31 March 2009 | | 30 Sept 2009 |
+----------------+-----------------------------------------+----------+--------------------------------------+----------+---------------------------------+
| | (6 months) | | (6 months) | | (12 months) |
+----------------+-----------------------------------------+----------+--------------------------------------+----------+---------------------------------+
| | | | Profit/ | | | | Profit/ | | | | Profit/ | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| | Revenue | | (loss) | | Revenue | | (loss) | | Revenue | | (loss) | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| UK | 8,698 | | 3,255 | | 8,559 | | 3,133 | | 17,916 | | 6,663 | |
| qualifications | | | | | | | | | | | | |
| and assessment | | | | | | | | | | | | |
| services | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| International | 3,134 | | 372 | | 2,699 | | 306 | | 7,550 | | 1,126 | |
| qualifications | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Support and | 1,564 | | 378 | | 1,478 | | 290 | | 2,792 | | 450 | |
| broadband | | | | | | | | | | | | |
| services | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Unallocated | 45 | | (113) | | 46 | | (93) | | 90 | | (187) | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Continuing | 13,441 | | 3,892 | | 12,782 | | 3,636 | | 28,348 | | 8,052 | |
| operations | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Finance | | | 84 | | | | 21 | | | | 77 | |
| income | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Finance costs | | | (23) | | | | (17) | | | | (99) | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Profit on | | | 3,953 | | | | 3,640 | | | | 8,030 | |
| ordinary | | | | | | | | | | | | |
| activities | | | | | | | | | | | | |
| before | | | | | | | | | | | | |
| taxation | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Tax on profit | | | (940) | | | | (783) | | | | (1,992) | |
| on ordinary | | | | | | | | | | | | |
| activities | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| Profit for | | | 3,013 | | | | 2,857 | | | | 6,038 | |
| the period | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+-----------------+----------+---------+----------+-----------------+----------+---------+-----+
| | | | | | | | | | | | | | | |
+----------------+---------+----------+---------+----------+----------+------+----------+---------+----------+----------+------+----------+---------+-----+
4. Taxation
The taxation charge for the period is analysed below:
+------------------------------------+---------+----------+---------+----------+---------+
| | 31 | | 31 | | 30 Sept |
| | March | | March | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | 2010 | | 2009 | | 2009 |
+------------------------------------+---------+----------+---------+----------+---------+
| | (6 | | (6 | | (12 |
| | months) | | months) | | months) |
+------------------------------------+---------+----------+---------+----------+---------+
| | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Current year tax charge | 1,019 | | 422 | | 1,269 |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjustments to tax charge in | - | | - | | (5) |
| respect of prior years | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Total current tax charge | 1,019 | | 422 | | 1,264 |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Deferred tax charge: Origination | (79) | | (86) | | 1,071 |
| and reversal of temporary | | | | | |
| differences | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Deferred tax credit in respect of | - | | 447 | | (343) |
| prior years | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Total deferred tax (credit)/charge | (79) | | 361 | | 728 |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Tax on profit on ordinary | 940 | | 783 | | 1,992 |
| activities | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Tax reconciliation | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Profit on ordinary activities | 3,953 | | 3,640 | | 8,030 |
| before taxation | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Theoretical tax charge at UK | 1,107 | | 1,019 | | 2,248 |
| corporation tax rate of 28% | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Effects of: | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Expenses not deductible for tax | (138) | | 11 | | 103 |
| purposes | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Other temporary differences | (37) | | (81) | | (15) |
+------------------------------------+---------+----------+---------+----------+---------+
| Utilisation of previously | (2) | | (185) | | (5) |
| unrecognised tax losses | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Tax losses arising where no | 10 | | 19 | | 9 |
| deferred tax asset has been | | | | | |
| recognised | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjustments in respect of prior | - | | - | | (348) |
| year | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Actual tax on profit on ordinary | 940 | | 783 | | 1,992 |
| activities | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
5. Dividends
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
| | | | | 31 | | 31 | | 30 Sept |
| | | | | March | | March | | 2009 |
| | | | | 2010 | | 2009 | | |
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
| | | | | (6 | | (6 | | (12 |
| | | | | months) | | months) | | months) |
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
| | | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
| Final dividend for the year ended 30 | | 650 | | 173 | | 173 |
| September 2009 of 1.20p (2008: 0.30p) | | | | | | |
| per share | | | | | | |
+-----------------------------------------+--+---------+----------+---------+----------+---------+
| Interim dividend for the year ended 30 | | - | | - | | 230 |
| September 2009 of 0.40p (2008: 0.12p) | | | | | | |
| per share | | | | | | |
+-----------------------------------------+--+---------+----------+---------+----------+---------+
| Amounts recognised as distributions to | | 650 | | 173 | | 403 |
| equity holders in the period | | | | | | |
+----------------------+-------+----------+--+---------+----------+---------+----------+---------+
In addition, the directors have declared an interim dividend of 0.80 pence
(totalling GBP420,000) for the period ended 31 March 2010. The dividend will be
paid on 2 July 2010 to shareholders who are on the register of members on 4 June
2010. These financial statements do not reflect this dividend payable, which
will be accounted for in shareholders' equity as an appropriation of retained
earnings in the year ending 30 September 2010.
6. Earnings per share
+------------------------------------+---------+----------+---------+----------+---------+
| | 31 | | 31 | | 30 Sept |
| | March | | March | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | 2010 | | 2009 | | 2009 |
+------------------------------------+---------+----------+---------+----------+---------+
| | (6 | | (6 | | (12 |
| | months) | | months) | | months) |
+------------------------------------+---------+----------+---------+----------+---------+
| Number of shares (million) | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Weighted average number of shares | 57.5 | | 57.6 | | 57.6 |
| in issue | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Weighted average number of shares | (4.1) | | (4.0) | | (4.2) |
| held as own shares by Employee | | | | | |
| Benefit Trust | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Weighted average number of shares | 53.4 | | 53.6 | | 53.4 |
| used in basic EPS | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Effect of dilutive securities: | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| - Share options | 3.4 | | 2.9 | | 3.5 |
+------------------------------------+---------+----------+---------+----------+---------+
| Weighted average number of shares | 56.8 | | 56.5 | | 56.9 |
| used in diluted EPS | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Earnings (GBP'000) | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Profit for the period attributable | 3,011 | | 2,860 | | 6,046 |
| to equity shareholders of the | | | | | |
| parent | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Amortisation charge on acquired | 225 | | 222 | | 446 |
| intangible assets, net of tax | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Non-controlling interest | 2 | | (3) | | (8) |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjusted earnings | 3,238 | | 3,079 | | 6,484 |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjusted earnings is shown as: | | | | |
+----------------------------------------------+----------+---------+----------+---------+
| Operating profit | 3,892 | | 3,636 | | 8,052 |
+------------------------------------+---------+----------+---------+----------+---------+
| Net finance income/(costs) | 61 | | 4 | | (22) |
+------------------------------------+---------+----------+---------+----------+---------+
| Amortisation charge on acquired | 313 | | 309 | | 619 |
| intangible assets | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjusted profit before tax | 4,266 | | 3,949 | | 8,649 |
+------------------------------------+---------+----------+---------+----------+---------+
| Tax on adjusted profit | (1,028) | | (870) | | (2,165) |
+------------------------------------+---------+----------+---------+----------+---------+
| Adjusted profit after tax | 3,238 | | 3,079 | | 6,484 |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| Earnings per share (pence) | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
| - Basic | 5.64p | | 5.34p | | 11.32p |
+------------------------------------+---------+----------+---------+----------+---------+
| - Diluted | 5.30p | | 5.06p | | 10.63p |
+------------------------------------+---------+----------+---------+----------+---------+
| - Adjusted EPS | 6.06p | | 5.74p | | 12.14p |
+------------------------------------+---------+----------+---------+----------+---------+
| - Adjusted EPS - Diluted | 5.70p | | 5.45p | | 11.40p |
+------------------------------------+---------+----------+---------+----------+---------+
| | | | | | |
+------------------------------------+---------+----------+---------+----------+---------+
7. Acquisition of subsidiary
On 1 February 2010 the Group acquired the entire share capital of Peter Honey
Publications Limited, a company which publishes a range of self-assessment
development tools focused on learning and behaviour, and opens up the prospect
of offering a range of services in the area of specialist and business
psychometrics. The initial consideration for the acquisition (before costs) was
GBP1,100,000 paid from existing cash resources, additional consideration of
GBP63,000 was paid during the period, reflecting a cash acquired adjustment in
accordance with the sale and purchase agreement. Further consideration of
GBP150,000 is payable by 31 May 2010 based on the successful transfer of
administration functions. In line with IFRS 3 (Revised), all costs of
acquisition have been expensed as administrative expenses.
Peter Honey Publications Limited's profit after tax for the period from 1
February 2010 to 31 March 2010 was GBP36,000.
Fair values
The book and provisional fair values of the assets and liabilities acquired were
as follows:
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | Book | | Accounting | | Fair |
| | | | value | | | | value |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | of | | policy | | to the |
| | | | assets | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | acquired | | alignment | | Group |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Other intangible | | | 162 | | (162) | | - |
| assets | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Inventories | | | 33 | | - | | 33 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Trade receivables | | | 24 | | - | | 24 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Other receivables | | | 5 | | - | | 5 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Cash and cash | | | 134 | | - | | 134 |
| equivalents | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Trade and other | | | (25) | | (19) | | (44) |
| payables | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Net assets acquired | | | 333 | | (181) | | 152 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Intangible assets | | | | | | | 479 |
| acquired | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Deferred tax on intangible | | | | | | (134) |
| assets | | | | | | |
+-------------------------------+----------+----------+----------+------------+----------+---------+
| Goodwill | | | | | | | 816 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | | | | | 1,313 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Satisfied by | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Cash consideration | | | | | | | 1,163 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| Deferred | | | | | | | 150 |
| consideration | | | | | | | |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
| | | | | | | | 1,313 |
+----------------------+--------+----------+----------+----------+------------+----------+---------+
Fair value adjustments include an accounting policy alignment to account for the
write off of other intangible assets, the inclusion of a commission payable
accrual and an intangible asset recognised in relation to publishing rights.
Goodwill recognised above includes items that cannot be individually separated
and reliably measured due to their nature. These include the expertise of staff
and synergy benefits.
If the acquisition of Peter Honey Publications Limited had been made at the
beginning of the period then the Group's results would have been revenue of
GBP13,572,000, profit before tax of GBP3,960,000 and profit after tax of
GBP3,018,000.
8. Share capital
Capital redemption reserve
The capital redemption reserve includes the nominal value of shares bought back
by the Company. During the period the Company bought back a total of 850,000
(2009: Nil) ordinary shares of 1p each for a total value of GBP1,145,000
(including costs of GBP10,000) (2009: GBPNil). The average price for which
these shares were purchased was 134.52p (2009: Nil).
Own shares held
The own shares held represents the cost of funding the purchase by the Trustees
of the Company's own shares in respect of the Employee Benefit Trust. At 31
March 2010 the Employee Benefit Trust held 4,255,476 ordinary shares (2009:
3,955,000 ordinary shares) at a cost of GBP2,570,000 (2009: 840,000).
9. Reconciliation of profit before tax to net cash generated from operations
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| | | | | 31 | | 31 | | 30 Sept |
| | | | | March | | March | | 2009 |
| | | | | 2010 | | 2009 | | |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| | | | | (6 | | (6 | | (12 |
| | | | | months) | | months) | | months) |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| | | | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Profit on ordinary activities | | 3,953 | | 3,640 | | 8,030 |
| before taxation | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Adjustments for: | | | | | | | | |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| Depreciation of property, | | 130 | | 119 | | 212 |
| plant and equipment | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Amortisation of | | | | 392 | | 371 | | 821 |
| intangible assets | | | | | | | | |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| Profit on the sale of | | - | | (1) | | (1) |
| property, plant and equipment | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Share options - Employee share | | 86 | | 45 | | 93 |
| scheme charges | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Net finance | | | | (61) | | (4) | | 22 |
| (income)/costs | | | | | | | | |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| | | | | 4,500 | | 4,170 | | 9,177 |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
| Increase in inventories | | (30) | | (17) | | (24) |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Increase in trade and | | | (764) | | (1,100) | | (409) |
| other receivables | | | | | | | |
+--------------------------+-----+----------+---------+----------+---------+----------+---------+
| Decrease in trade and other | | (623) | | (196) | | (281) |
| payables | | | | | | |
+--------------------------------+----------+---------+----------+---------+----------+---------+
| Net cash generated from | | | 3,083 | | 2,857 | | 8,463 |
| operations | | | | | | | |
+--------------------------+-----+----------+---------+----------+---------+----------+---------+
| | | | | | | | | |
+----------------------+---+-----+----------+---------+----------+---------+----------+---------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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