RNS Number:2025Q
Imprint Plc
17 March 2008
IMPRINT PLC
Preliminary Results for the year ended 31 December 2007
Imprint Plc ('Imprint' or 'the Group'), the multi-disciplined international
recruitment business, announces its preliminary results for the year ended 31
December 2007.
FINANCIAL HIGHLIGHTS
* Turnover from continuing operations up 9.8% to �68.4 million (2006 - �62.3
million)
* Net fee income from continuing operations up 18.6% to �34.3 million (2006 -
�29.0 million)
* Profit from continuing operations before exceptional items and taxation
unchanged at �6.8 million
* After exceptional items, profit from continuing operations before taxation was
�4.4 million (2006 - �6.4 million)
* Diluted EPS on continuing operations (adjusted for exceptional items) up 14.8%
to 13.2p (2006 - 11.5p)
* Strong balance sheet with cash at year end of �9.5 million (2006 - �4.3
million)
BUSINESS HIGHLIGHTS
* Significant year of change for the Group
* Underperforming business units sold towards the end of the year
* Group now focused on its area of strength, mid-level professional contingent
recruitment within a range of international market sectors
* Increased fee generating headcount in continuing business by 30% to 331 (2006
- 254)
* Strong revenue growth in continuing businesses, particularly in Asia and the
Middle East
* Ongoing evaluation of offers made for the Group
For further information, please contact:
Imprint Plc 020 7438 3100
John Gordon, Chairman
Robert Thesiger, Chief Executive Officer
Colin Webster, Chief Financial Officer
Maitland
Neil Bennett 020 7379 5151
CHAIRMAN'S STATEMENT AND OPERATING REVIEW
Introduction
2007 was a year of significant change for the Imprint Group. At a trading level
we experienced strong growth in our international businesses but disappointing
results from our UK search and selection business and our recruitment operations
in northern England. There were changes to the Board - I replaced Pierce Casey
as Chairman in April, Nicholas Smith joined as a non-executive director shortly
thereafter and Robert Thesiger replaced Brian Hamill as Chief Executive Officer
in October. At a strategic level we sold in the fourth quarter the
underperforming UK search and selection and northern businesses to their
respective management. Finally, at a corporate level, we have had takeover
interest from a number of parties since June 2007 which only now as I write this
looks to be nearing a conclusion. Against these unsettling events and more
challenging economic conditions, our staff in Amsterdam, Dubai, Dublin,
Edinburgh, London, Hong Kong, Singapore, Sydney, Tokyo and Windsor have
concentrated on their work and have continued to build the businesses of
Accreate, ECHM, IQ Selection, Morgan McKinley and our search and selection
practices outside of Europe. I particularly wish to express my thanks to all of
our employees worldwide for their enduring loyalty, hard work and commitment.
Following the disposals, with effect from 1 January 2008, the Imprint Group's
service offering has focused on mid-level contingent recruitment within the
international financial services, commerce and industry, professional services
and public sector markets, whilst retaining its executive search presence across
Asia Pacific and the Middle East (the 'Ongoing Group'). The Board believes that
the Ongoing Group forms a more stable base from which to grow and I am pleased
to be able to report strong net fee income growth for the Ongoing Group in 2007,
particularly in our Asian and Middle Eastern operations. A more detailed review
of the business follows.
Financial highlights
Turnover from continuing operations for the year ended 31 December 2007
increased by 9.8% to �68.4 million (2006 - �62.3 million) and net fee income
from continuing operations grew by 18.6% to �34.3 million (2006 - �29.0
million). Net fee income from permanent placements grew slightly more quickly
than from temporary and contract placements, reflecting good market conditions
during the year. The Ongoing Group's strategy of diversifying the business away
from its previous UK-centric focus gained further momentum during 2007, with
approximately 35% (2006 - 30%) of net fee income and operating profit (before
exceptional items) from continuing operations generated outside the UK. The
Asian and Middle Eastern operations accounted for 25% of the Ongoing Group's net
fee income and operating profit in 2007.
Profit from continuing operations before exceptional items and taxation remained
unchanged at �6.8 million, with the majority of the increase in net fee income
from core business operations being absorbed through continued investment in fee
generating headcount. Furthermore, costs associated with the Group's shared
service functions and listed status, amounting to approximately �5.4 million in
2007 (an increase of �1.1 million on the equivalent costs of �4.3 million in
2006), have been fully allocated to continuing operations, as none of these
functions were sold in full or in part through the business disposals undertaken
during the year.
Exceptional costs within continuing operations in the year amounted to �2.4
million (2006 - �0.4 million). Of this, �1.6 million (including a �1.0 million
accelerated share-based payment charge) resulted from the offer process which
began on 22 June 2007 with the acquisition of 2,000,000 Imprint Plc shares by
OPD Group Plc and is still ongoing. The remainder (�0.8 million) represents an
onerous lease provision for the Group's leased premises at Sheraton Street,
London, which were previously occupied exclusively by the London Search &
Selection Businesses but which are now vacant and superfluous to the Ongoing
Group's operational requirements. The lease on this property has an unexpired
term of eight and a half years at a current annual rent of approximately
�465,000. Whilst the Group is actively investigating its options with regard to
the future of this property, the Board considers it prudent to make an onerous
lease provision in this regard.
After taxation, the profit for the year was �6.2 million (2006 - �8.0 million).
This included a profit of �3.1 million from discontinued operations (2006 - �3.8
million), of which �1.6 million was derived from trading in the disposed
businesses (�2.5 million before tax; 2006 - �4.5 million before tax) and �1.5
million was derived from the net disposal profit (after tax) on sale of these
businesses.
Cash generated from operations in the year was �9.9 million (2006 - �7.7
million), driven by good working capital management. This resulted in a strong
balance sheet at 31 December 2007, with cash of �9.5 million (2006 - �4.3
million) and a further �7.5 million of banking facilities available to the Group
should they be required.
Taxation and earnings per share
Tax on profits from continuing operations was �1.3 million (2006 - �2.2
million), representing an effective rate of 30% (2006 - 34%). However, before
exceptional items, which removes the accelerated accounting and tax effects of
the Group's share options arising from the offer process and which distorts the
tax charge in 2007, the effective tax rate was 24%. This is lower than the UK
Corporation Tax rate of 30% due to the increasing percentage of the Group's
profits being generated in countries where the corporate tax rates are
substantially lower than 30%. With UK Corporation Tax rates reducing from 30% to
28% in April 2008, this should ensure a continued low overall effective rate for
2008.
Diluted earnings per share from continuing operations (adjusted for exceptional
items) were 14.8% higher than 2006 at 13.2 pence. Basic earnings per share were
16.3 pence (2006 - 21.8 pence).
Dividends
As the Group remained in an offer period at the date the financial statements
were approved by the Board, no final dividend is to be proposed for 2007. In a
situation where all offers for the Group lapsed and Imprint remained
independent, the Board would consider a final dividend for 2007 and would also
consider returning to shareholders cash which is surplus to the annual dividend
and operational requirements of the business. During 2007 a final dividend for
2006 of 2.6 pence per share was paid in May and an interim dividend of 1.5 pence
per share was paid in December.
Financial position
The financial information shown in these preliminary results is presented in
accordance with International Financial Reporting Standards ('IFRSs'), including
the restatement of comparative information for 2006. Further information on the
change to accounting standards and full details and reconciliations of UK GAAP
to IFRSs are included in the notes to the financial information.
The Group's balance sheet strengthened during the year with net assets
increasing to �56.6 million (2006 - �50.6 million). The increase in net assets
principally relates to the profit for the year of �6.2 million, net movements
relating to share options of �0.4 million, the issue of new shares for �0.9
million and currency movements of �0.1 million, offset by dividends paid to
shareholders amounting to �1.6 million. Working capital remained under tight
control, with trade debtors of �11.1 million (2006 - �13.4 million) representing
45 days' sales (2006 - 48 days' sales).
Cash generated in 2007 was �5.2 million (2006 - �1.1 million), including �9.9
million (2006 - �7.7 million) from operating activities, �0.4 million (2006 -
�0.1 million) from the exercise of share options, �0.5 million from business
disposals (2006 - nil) and a net �0.2 million from bank interest received (2006
- negligible). �0.6 million of funds generated were spent on acquisitions (2006
- �2.2 million) and �0.9 million (2006 - �0.9 million) on capital expenditure.
Tax paid was �2.7 million (2006 - �2.3 million) and dividends were paid to
shareholders amounting to �1.6 million (2005 - �1.2 million). Cash surpluses are
invested in short-term deposits to maximise interest receivable.
Disposals
On 23 November 2007, the Group entered into an agreement to sell its
London-based WoodHamill and Imprint Search & Selection branded businesses (the
"London Search & Selection Businesses") to Redgrave Partners LLP ("Redgrave"),
an entity owned and controlled by Brian Hamill. Completion of the disposal took
place on 31 December 2007. The gross consideration, which was paid on 15 January
2008, was �3.1 million in cash. Imprint Consulting was responsible for its own
and certain of Redgrave's expenses in connection with the disposal and also
assumed certain liabilities associated with the transfer of the London Search &
Selection Businesses to Redgrave as a going concern (including certain costs
relating to employees). The extent of the aggregate adjustments made to the
gross consideration is included within the net disposal proceeds referred to
above.
Certain assets of the London Search & Selection Businesses, including the
majority of its debtors, accrued income and cash, were excluded from the
disposal and have been retained by the Group. The Group is therefore benefiting
from further cash inflows as the debtor and accrued income balances of the
London Search & Selection Businesses at completion are collected. The debtor and
accrued income balances of the London Search & Selection Businesses at
completion were approximately �2.7 million.
On 5 December 2007, the Group disposed of its UK regional recruitment operations
in Birmingham, Leeds and Manchester (the "UK Northern Business") to Calton
Consulting Limited, a newly-incorporated company owned and controlled by David
Colgrave. Under the sale and purchase agreement relating to this disposal, the
Group is entitled to receive up to �800,000 in licence fees for the use of the
intellectual property associated with the UK Northern Business as well as a
nominal sum for the goodwill and tangible fixed assets of the disposed business.
The consideration and licence fees are payable over a three year period
commencing on 5 December 2007 and the discounted value of these payments, net of
a provision which reflects the associated credit risk, is included within the
net disposal proceeds above. The disposal also included the book debts of the UK
Northern Business for which payment was in part made at completion with the
balance payable upon realisation.
Operating review of the Ongoing Group
Our specialist contingent businesses currently trade under four brands:
Accreate, which operates in the Dublin market with its primary focus being on
financial recruitment in the corporate and financial services sectors; ECHM,
which specialises in financial recruitment into blue chip corporates and the
global accounting practices in London and the South East of England and in the
Netherlands; IQ Selection, which provides a variety of recruitment services
across the Dubai and Gulf Cooperative Community markets; and Morgan McKinley,
which is a leading supplier of back and middle office recruitment services
across a range of disciplines to financial services institutions in the UK, the
Netherlands and in Asia Pacific. The Ongoing Group also provides retained
executive search services across Asia Pacific and the Middle East.
The ability to recruit new fee generating staff is vital to the success of any
recruitment business. In 2007, we increased fee generating headcount by 30% to
331 at 31 December 2007 (2006 - 254). Average headcount during 2007 was 309, up
by 33% from 232 in 2006.
In the United Kingdom, net fee income increased by 11% to �22.4 million (2006 -
�20.2 million), average fee generating headcount grew by 15% to 179 and
operating profit before exceptional items was �4.3 million (2006 - �4.8
million). Before the allocation of central costs (the bulk of which were
deducted from our continuing UK profits, including costs which were previously
allocated to our discontinued UK businesses), operating profit grew by 5% from
�8.5 million to �8.9 million. Approximately 58% (2006 - 67%) of the Ongoing
Group's average fee earners were employed in the UK during the year, generating
65% (2006 - 70%) of the Ongoing Group's net fee income, highlighting the Group's
reducing reliance on its core UK markets.
Our Asia Pacific and Middle Eastern operations have together delivered strong
growth in 2007. Net fee income increased by 56% to �8.5 million (2006 - �5.4
million) and average fee generating headcount grew by 87% to 99. There was
however some moderation in growth rates in the fourth quarter due to more
challenging conditions in the investment banking sector and the impact of the
departure of some consultants from our search business following the
announcement of the disposal of our London Search & Selection Businesses. As
part of our investment in the region, John Hunter, a Board director, relocated
to Australia in April to assume the position of Chief Operating Officer, Asia
Pacific and the Middle East and to take overall responsibility for the
development of this region. At the same time, we opened our fifth regional
office in Sydney, Australia (our other offices being in Dubai, Hong Kong,
Singapore and Tokyo). In addition to enabling us to benefit from the local
market, our Sydney office will also generate candidates for the other offices in
the Group and provides an additional route to market for the large number of
candidates on our existing databases wishing to return or migrate to Australia.
We also increased our capacity in Dubai through additional office space for IQ
Selection during the year. Notwithstanding this significant investment in
headcount and new offices, our operating profit before exceptional items for the
region increased by 57% to �1.7 million (2006 - �1.1 million). By the end of the
year approximately 35% (2006 - 26%) of the Ongoing Group's average fee earners
were employed in Asia and the Middle East, and they generated approximately 25%
(2006 - 19%) of the Ongoing Group's net fee income.
Our operations in Europe outside of the UK are in Dublin and Amsterdam. Together
these offices generated net fee income of �3.5 million (2006 - �3.3 million) and
delivered an operating profit before exceptional items of �0.7 million (�1.0
million). Average fee generating headcount grew by 35% to 31 and this region
accounts for approximately 10% of the Ongoing Group's net fee income and
headcount. Following our decision to move to larger offices in the Netherlands
in February and the roll out of the Morgan McKinley brand in Amsterdam during
the year, we were disappointed by the results from this office in 2007, where
net fee income reduced by 22%, eroding some of the good progress we made in
2006. We still consider the Dutch market for the Group's services to be strong
and are currently introducing new initiatives to drive revenue growth in 2008.
Our Irish operations performed well, increasing net fee income and operating
profit by 16%. Towards the end of the year we reached agreement with the vendors
of Accreate to end the earn out period early in order to ensure a smooth
transition and fully align Accreate's interests with the rest of the Group. We
were also pleased that Ronan Colleran, the founder of Accreate, agreed to remain
with the Group as Managing Director of our Irish operations.
Board of Directors
As noted above, on 10 April 2007 I was appointed Non-Executive Chairman of the
Group, replacing Pierce Casey, who stood down as a director and as Chairman on
the same day. On 14 May 2007, Nicholas Smith joined the Board as a non-executive
director. Brian Hamill resigned as a director and as Chief Executive Officer of
the Group on 10 October 2007. Robert Thesiger, previously Chief Operating
Officer, Europe, was appointed as Chief Executive Officer on the same day.
Offers for Imprint
Between June and August 2007 Imprint received initial approaches from and
commenced discussions with OPD Group Plc ('OPD') and subsequently the executive
directors of Imprint backed by funds advised by Alchemy Partners LLP. Neither of
these approaches resulted in an offer for the Group.
OPD later announced on 7 November 2007 an offer for Imprint which had been
recommended by the Imprint Board. On 20 December 2007 the Board took the
decision to recommend that Imprint shareholders vote in favour of proposals made
by Hydrogen Group Plc ('Hydrogen') for the acquisition of Imprint by way of a
Court sanctioned scheme of arrangement under Section 425 of the Companies Act,
which at the time offered a significant headline premium over the consideration
available under the OPD offer, as well as the option for shareholders to receive
a significant amount of consideration in cash in lieu of new Hydrogen shares.
Following an auction process in February 2008 which had been established by the
Executive of the Panel on Takeovers and Mergers and the receipt of an increased
offer from OPD and an increased proposal from Hydrogen, the Board recommended
that Imprint shareholders continue to vote in favour of the revised Hydrogen
proposal, as it represented a higher guaranteed cash amount and the potential to
receive significantly more cash than that available under the revised OPD offer.
Subsequently, on 4 March 2008 the Premier Group announced a firm intention to
make an all-cash offer for Imprint at 115 pence per share and on 12 March 2008
the Board recommended that Imprint shareholders vote in favour of this proposal
at the appropriate time, since it gives a higher guaranteed cash amount than
both the revised Hydrogen scheme and the revised OPD offer, neither of which has
been withdrawn or has lapsed.
Imprint shareholders will be updated further in due course.
Current trading and outlook
The Board is mindful of the significant uncertainty in the global economy, but
is encouraged by the Group's performance since the start of the year which is in
line with its expectations. We have experienced good activity levels in most of
the markets in which we operate, with the exception of certain parts of the
investment banking sector in Asia Pacific. However, with a healthy balance
sheet, established trading brands and our management's track record of running
recruitment businesses against a backdrop of more challenging economic
conditions, the Board views the future with confidence.
John Gordon
Chairman
14 March 2008
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007
Before
exceptional Exceptional
items items Total Total
2007 2007 2007 2006
Note �000 �000 �000 �000
Turnover 3 68,401 - 68,401 62,296
Cost of sales (34,059) - (34,059) (33,331)
--------- --------- -------- --------
Net fee income 3 34,342 - 34,342 28,965
Administrative
expenses (27,711) - (27,711) (22,107)
Exceptional
administrative
expenses 4 - (2,395) (2,395) (370)
Total
administrative
expenses (27,711) (2,395) (30,106) (22,477)
--------- --------- -------- --------
Group operating
profit from
continuing
operations 3 6,631 (2,395) 4,236 6,488
Finance income 204 - 204 88
Finance costs (43) - (43) (128)
Net finance income/
(costs) 3 161 - 161 (40)
--------- --------- -------- --------
Profit from
continuing
operations
before taxation 6,792 (2,395) 4,397 6,448
Taxation 5 (1,637) 299 (1,338) (2,183)
--------- --------- -------- --------
Profit for the
financial year from
continuing
operations 5,155 (2,096) 3,059 4,265
--------- ---------
Discontinued
operations
Profit for the year
from
discontinued
operations 9 3,118 3,750
-------- --------
Profit for the year 6,177 8,015
-------- --------
Profits
attributable to:
Equity shareholders
of the
parent company 6,177 8,015
-------- --------
Earnings per share
Basic EPS on
continuing
operations
adjusted for
exceptional
items (pence) 7 13.6 12.3
Diluted EPS on
continuing
operations
adjusted for
exceptional
items (pence) 7 13.2 11.5
Basic EPS on profit
for the
year (pence) 7 16.3 21.8
Diluted EPS on
profit for the
year (pence) 7 15.8 20.4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AT 31 DECEMBER 2007
Called
up Foreign
share Share exchange Other Retained Total
capital premium reserve reserves earnings equity
�000 �000 �000 �000 �000 �000
Balance at 1
January 2006 362 39,303 - 2,701 1,244 43,610
Currency
translation
differences - - (219) - - (219)
Deferred tax on
share options - - - (1,429) (1,429)
Tax relief on
exercise of
options 538 538
------ ------- ------- ------- ------- -------
Net expense
recognised
directly in
equity - - (219) (1,429) 538 (1,110)
Profit for year 8,015 8,015
------ ------- ------- ------- ------- -------
Total recognised
(expense)/income
for the year - - (219) (1,429) 8,553 6,905
Shares issued in
the year 11 988 - - 999
Credit in respect
of share-based
payments - - - - 280 280
Dividends paid - - - - (1,219) (1,219)
------ ------- ------- ------- ------- -------
Balance at 31
December 2006 373 40,291 (219) 1,272 8,858 50,575
------ ------- ------- ------- ------- -------
Balance at 1
January 2007 373 40,291 (219) 1,272 8,858 50,575
Currency
translation
differences - - 141 - - 141
Deferred tax on
share options - - - (1,130) - (1,130)
Tax relief on
exercise of
options - - - - 375 375
------ ------- ------- ------- ------- -------
Net expense
recognised
directly in
equity - - 141 (1,130) 375 (614)
Profit for the
year 6,177 6,177
------ ------- ------- ------- ------- -------
Total recognised
(expense)/income
for the year - - 141 (1,130) 6,552 5,563
Shares issued in
the period 10 905 - - - 915
Credit in respect
of share-based
payments - - - - 1,148 1,148
Dividends paid - - - - (1,554) (1,554)
------ ------- ------- ------- ------- -------
Balance at 31
December 2007 383 41,196 (78) 142 15,004 56,647
------ ------- ------- ------- ------- -------
CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2007
2007 2006
�000 �000
Non-current assets
Intangible assets
- goodwill 38,892 35,483
- software 394 352
Property, plant and equipment 943 773
Deferred tax asset 389 1,520
Other receivables 251 836
----------- -----------
40,869 38,964
----------- -----------
Current assets
Trade and other receivables 21,612 19,064
Other financial assets - 453
Cash and cash equivalents 9,464 4,307
----------- -----------
31,076 23,824
----------- -----------
Total assets 71,945 62,788
----------- -----------
Current liabilities
Trade and other payables (8,676) (7,834)
Contingent consideration (4,393) (1,077)
Current income tax payable (570) (1,401)
Financial liabilities - (453)
Provisions (632) (188)
----------- -----------
(14,271) (10,953)
----------- -----------
Non-current liabilities
Provisions (158) (182)
Contingent consideration (206) (1,078)
Deferred tax liability (663) -
----------- -----------
(1,027) (1,260)
----------- -----------
Total liabilities (15,298) (12,213)
----------- -----------
Net assets 56,647 50,575
----------- -----------
Equity
Called up share capital 383 373
Share premium account 41,196 40,291
Foreign exchange reserve (78) (219)
Other reserves 142 1,272
Retained earnings 15,004 8,858
----------- -----------
56,647 50,575
----------- -----------
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
Note �000 �000
Net cash flows from operating activities
Cash generated from operating activities other
than exceptional items 10,275 8,018
Cash outflow from exceptional items (365) (345)
----------- -----------
Cash generated from operations 8 9,910 7,673
Interest received 204 88
Interest paid (43) (128)
Income tax paid (2,744) (2,310)
----------- -----------
Net cash generated from operating activities 7,327 5,323
----------- -----------
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired (544) (2,209)
Proceeds from sale of business assets 468 -
Purchase of property, plant, equipment (749) (694)
Proceeds from sale of equipment 8 -
Purchase of software intangible assets (166) (181)
----------- -----------
Net cash used in investing activities (983) (3,084)
----------- -----------
Cash flows from financing activities
Proceeds from issue of share capital (net of
share issue costs) 371 77
Dividends paid to company's shareholders (1,554) (1,219)
----------- -----------
Net cash used in financing activities (1,183) (1,142)
----------- -----------
Net increase in cash and cash equivalents 5,161 1,097
Cash and cash equivalents at start of period 4,307 3,169
Foreign exchange gain on cash and cash
equivalents (4) 41
----------- -----------
Cash at the end of the year 9,464 4,307
----------- -----------
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
1. Basis of preparation
The consolidation financial information below has been prepared under the
historical cost convention and in accordance with the recognition and
measurement criteria of IFRSs, including International Accounting Standards and
Interpretations as adopted for use in the EU. It does not include all of the
information required for full annual financial statements.
The Group's financial statements until the year ended 31 December 2006 were
prepared in accordance with United Kingdom generally accepted accounting
principles (UK GAAP). In order to comply with the recognition and measurement
criteria of IFRSs, management has amended some accounting methods applied under
UK GAAP in preparing the consolidated financial information for 2007. As such,
comparative figures for 2006 have been restated to reflect the adjustments
required in the transition from UK GAAP to IFRSs. The Group's accounting
policies under IFRSs are shown in note 2 and details of the reconciliation
between UK GAAP and IFRSs are shown in note 9.
The Group has made use of the exemptions available under IFRS 1 "First-time
Adoption of International Financial Reporting Standards" as follows:
* Cumulative translation differences for all foreign operations are deemed
to be zero as at 1 January 2006;
* The Group has chosen to apply IFRS 3 "Business Combinations" prospectively
from the date of transition to IFRSs (1 January 2006) and has not restated
goodwill arising from transactions prior to this date; and
* The Group has chosen to apply IAS 21 "The effects of changes in foreign
exchange rates" except in relation to the cumulative translation differences
for all foreign operations which are deemed to be zero at the date of
transition to IFRSs.
The financial information in this preliminary announcement does not constitute
statutory financial statements as defined in section 240 of the Companies Act
1985. The comparative financial information is based on the statutory financial
statements for the financial year ended 31 December 2006, adjusted for the
restatement to IFRSs. Those financial statements, upon which the auditors issued
an unqualified opinion, have been delivered to the Registrar of Companies.
The financial information in this preliminary announcement has been extracted
from the audited financial statements of the Group for the year ended 31
December 2007, which will be filed with the Registrar of Companies in due
course. The audit report on these financial statements is unqualified and does
not contain a statement under Section 237 (2) or (3) of the Companies Act 1985.
The preliminary announcement was approved by the board of directors on 14 March
2008.
2. Accounting policies
Basis of consolidation
Subsidiaries are consolidated from the date of their acquisition, being the date
on which the Group obtains control, and continue to be consolidated until the
date such control ceases. Control comprises the power to govern the financial
and operating policies of the investee so as to obtain benefit from its
activities and is achieved through direct or indirect ownership of voting rights
or by way of contractual agreement. The financial statements of subsidiaries
used in the preparation of the consolidated financial statements are prepared
for the same reporting year as the parent company and are based on consistent
accounting policies. All inter-company balances and transactions, including
unrealised profits arising from them, are eliminated.
Critical accounting estimates and judgements
In preparing the financial information, management has had to make judgements,
estimates and assumptions that affect the reported amounts of assets and
liabilities, income and expenses. The critical judgements and key sources of
estimation of uncertainty that have been made in preparing the financial
information are in relation to revenue recognition (see accounting policy on
Turnover below), intangible assets and impairment of trade and other
receivables, as they have the most significant effect on the amount recognised
in the financial statements. These judgements involve assumptions or estimates
in respect of future events which can vary from what is anticipated. These key
sources of estimation certainty are arrived at through specific analysis and
historical experience.
Turnover
Turnover is stated net of value added tax and represents amounts derived from
the provision of services to third parties in respect of the Group's continuing
activity.
Turnover from permanent placements is recognised on completion of defined stages
of work in the case of retained engagements, and at the date an offer is
accepted by a candidate and a start date is determined in the case of
non-retained engagements. Amounts not invoiced at the balance sheet date are
included within accrued income and provision is made against this balance for
possible cancellations of placements prior to, or shortly after, the
commencement of employment.
Turnover from temporary placements is recognised as services are provided by
temporary workers and contractors to clients.
Net fee income represents turnover less cost of sales, which includes the
remuneration cost of temporary workers and contractors and the cost of
advertising recharged to clients.
Operating profit
Operating profit represents profit before income tax, finance charges and
profits from disposal of discontinued businesses.
Exceptional costs
The Group discloses items of income or expense as exceptional where the cost or
income is of such size or incidence that the additional disclosure is required
for the reader to understand the financial statements.
Business combinations and goodwill
Business combinations on or after 1 January 2006 are accounted for under IFRS 3
using the purchase method. Any excess of cost of the business combination over
the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities is recognised in the balance sheet as
goodwill. Goodwill recognised as an intangible asset as at 31 December 2005 is
recorded at its carrying amount under UK GAAP.
After initial recognition, goodwill is stated at cost less any accumulated
impairment losses, with the carrying value being reviewed for impairment
annually.
Intangible assets
Intangible assets acquired separately from a business are carried initially at
cost. The cost of an intangible asset acquired as part of a business combination
is recognised separately from goodwill if it can be reliably measured and the
asset is separable or if it arises from contractual or other legal rights.
Following initial recognition, the intangible assets are carried at cost less
accumulated amortisation and accumulated impairment losses. The useful lives of
intangible assets are assessed to be either finite or indefinite. Intangible
assets with finite lives are amortised over the useful economic life and
assessed for impairment whenever there is an indication that the intangible
asset may be impaired. Intangible assets with an indefinite life are assessed at
least annually for impairment.
Amortisation is provided at rates calculated to write off the cost, less
estimated residual value, of each asset evenly over its expected useful life, as
follows:
Computer software 3 - 5 years
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Depreciation is calculated to write off the cost, less estimated residual value,
of each asset evenly over its expected useful life, as follows:
Furniture, fixtures and fittings; and office equipment 25% per annum
Computer hardware 25% to 50% per annum
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an
asset may be impaired. If any such indication exists, or when annual impairment
testing for an asset is required, the Group makes an estimate of the asset's
recoverable amount. An asset's recoverable amount is the higher of an asset's
fair value less costs to sell and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets, in which
case it is part of a cash generating unit. Where the carrying amount of an asset
exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the estimated future
cash flows to be generated by the asset are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. Impairment losses of
continuing operations are recognised in the income statement in those expense
categories consistent with the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has
been a change in the estimates used to determine the asset's recoverable amount
since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased
amount cannot exceed the carrying amount that would have been determined, net of
depreciation (or amortisation), had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised in the income statement.
Income taxes
Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the tax authorities, based on tax rates and laws that
are enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
* where the temporary difference arises from the initial recognition of goodwill
or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting
nor taxable profit or loss
* in respect of taxable temporary differences associated with investments in
subsidiaries, where the timing of the reversal of the temporary differences
can be controlled and it is probable that the temporary differences will not
reverse in the foreseeable future; and
* deferred income tax assets are recognised only to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be
utilised.
Deferred income tax is measured on an undiscounted basis at the tax rates that
are expected to apply in the year in which the related asset or liability is
settled, based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
Equity
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Accordingly, a
financial instrument is treated as equity if:
(i) there is no contractual obligation to deliver cash or other financial
assets or to exchange financial assets or liabilities on terms that may be
unfavourable: and
(ii) the instrument is a non-derivative that contains no contractual obligations
to deliver a variable number of shares or is a derivative that will be
settled only by the Group exchanging a fixed amount of cash or other assets
for a fixed number of the Group's own equity instruments.
Share-based payments
The cost of equity-settled transactions with employees, for awards granted after
7 November 2002 that had not vested by 1 January 2006, is measured by reference
to the fair value at the date on which they are granted. The fair value is
determined by an external valuer using an appropriate pricing model.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance and/
or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award ('the vesting date'). The
cumulative expense recognised for equity-settled transactions at each reporting
date until the vesting date reflects the extent to which the vesting period has
expired and the Group's best estimate of the number of equity instruments that
will ultimately vest. The income statement charge or credit for a period
represents the movement in cumulative expense recognised as at the beginning and
end of that period.
The dilutive effect of outstanding options is reflected as a dilution in the
computation of earnings per share.
Trade receivables
Trade receivables are not interest bearing and are stated at their nominal
value, less any accumulated impairment losses.
Trade payables
Trade payables are not interest bearing and are stated at their nominal value.
Foreign currencies
Company
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the functional currency rate of exchange ruling
at the balance sheet date. All differences are taken to the income statement
with the exception of differences on foreign currency borrowings, to the extent
that they are used to finance foreign equity investments, which are taken
directly to a separate component of equity together with the exchange difference
on the carrying amount of the related investments. Tax charges and credits
attributable to exchange differences on those borrowings are also dealt with in
equity.
Group
Transactions of foreign operations are recorded in the currency of the primary
economic environment in which the entity operates, its functional currency.
Income and expenses are translated into sterling at weighted average exchange
rates for the year, assets and liabilities are translated at the rate of
exchange ruling at the balance sheet date. The resulting exchange differences
are taken directly to equity.
All other translation differences are taken to the income statement with the
exception of differences on foreign currency borrowings to the extent that they
are used to finance Group equity investments in foreign enterprises, which are
taken directly to a separate component of equity together with the exchange
difference on the net investment in these enterprises. Tax charges and credits
to exchange differences on those borrowings are also dealt with in equity.
Dividend distribution
Dividend distribution to the Group's shareholders is recognised as a liability
in the Group's financial statements in the period in which the dividends are
approved by the company's shareholders, or in the case of interim dividends, the
period in which they are paid.
Provisions
Provisions are measured at the present value of the expenditures expected to be
required to settle the obligation using a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the
obligation. The unwinding of the discount is recognised as interest expense.
Pensions
The Group has stakeholder pension schemes available for employees and also makes
defined contributions directly to employees' personal pension plans.
Contributions are charged to the income statement as they become payable.
Leases
Leases where the group is lessee and the lessor retains a significant portion of
the risks and benefits of ownership of the asset are classified as operating
leases and rentals payable are charged in the income statement on a straight
line basis over the lease term.
3. Segmental analysis
The Group operates in one primary business segment, being that of recruitment
services. As a consequence no additional business segment information is
required to be provided. The analysis of turnover and net fee income between
permanent and temporary placements has been included below as additional
disclosure over and above the requirements of IAS 14 'Segment reporting'. The
Group's secondary segment is geography which it manages primarily through three
geographical regions. There are no material sales to other geographical
segments. There is no material inter-segment trading.
Segment results, assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Allocations have been made on the basis of the location of assets, with the
exception of certain corporate costs which have remained unallocated.
Segment capital expenditure is the total cost incurred during the period to
acquire segment assets that are expected to be used for more than one period.
Geographical segment analysis - year ended 31 December 2007
Asia United
Pacific & Kingdom
United Middle Rest of Continuing Discontinued
Kingdom East Europe Operations Operations Total
�000 �000 �000 �000 �000 �000
Turnover 55,228 8,814 4,359 68,401 13,554 81,955
-------- ------- --------- -------- --------- -----------
Net fee income 22,370 8,483 3,489 34,342 11,655 45,997
Operating profit
before exceptional items 4,249 1,673 709 6,631 2,620 9,251
Exceptional items (2,362) (27) (6) (2,395) (163) (2,558)
-------- ------- --------- -------- --------- -----------
Operating profit 1,887 1,646 703 4,236 2,457 6,693
Net gain on disposals - - - - 2,193 2,193
-------- ------- --------- -------- --------- -----------
1,887 1,646 703 4,236 4,650 8,886
Finance costs (net) 128 6 27 161 - 161
-------- ------- --------- -------- --------- -----------
Profit before tax 2,015 1,652 730 4,397 4,650 9,047
Income tax expense (704) (518) (116) (1,338) (1,532) (2,870)
-------- ------- --------- -------- --------- -----------
Profit for the year 1,311 1,134 614 3,059 3,118 6,177
-------- ------- --------- -------- --------- -----------
Total segment assets 66,792 3,082 2,071 71,945 71,945
-------- ------- --------- -------- -----------
Segment liabilities 13,642 1,233 423 15,298 15,298
-------- ------- --------- -------- -----------
Segment capital
expenditure 578 158 135 871 871
Segment depreciation
and amortisation expense 492 29 83 604 604
-------- ------- --------- -------- -----------
Geographical segment analysis - year ended 31 December 2006
Asia United
Pacific & Kingdom
United Middle Rest of Continuing Discontinued
Kingdom East Europe Operations Operations Total
�000 �000 �000 �000 �000 �000
Turnover 52,964 5,517 3,815 62,296 17,816 80,112
-------- -------- -------- --------- --------- --------
Net fee income 20,240 5,424 3,301 28,965 15,927 44,892
-------- -------- -------- --------- --------- --------
Operating profit
before exceptional items 4,799 1,066 994 6,859 4,463 11,322
Exceptional items (370) - - (370) - (370)
-------- -------- -------- --------- --------- --------
Operating profit 4,429 1,066 994 6,489 4,463 10,952
Finance costs (net) (23) (26) 8 (41) - (41)
-------- -------- -------- --------- --------- --------
Profit before tax 4,406 1,040 1,002 6,448 4,463 10,911
Income tax expense (1,784) (287) (112) (2,183) (713) (2,896)
-------- -------- -------- --------- --------- --------
Profit for the year 2,622 753 890 4,265 3,750 8,015
-------- -------- -------- --------- --------- --------
Total segment assets 59,777 1,671 1,340 62,788 62,788
-------- -------- -------- --------- --------
Segment liabilities 10,735 994 484 12,213 12,213
-------- -------- -------- --------- --------
Segment capital
expenditure 459 93 8 560 560
Segment depreciation
and amortisation expense 383 70 8 461 461
-------- -------- -------- --------- --------
Recruitment classification analysis
Net fee
Turnover Income
2007 2006 2007 2006
�000 �000 �000 �000
Continuing operations:
Permanent 25,353 21,371 24,826 20,836
Temporary and contract 43,048 40,925 9,516 8,129
----------- ------------ ----------- ------------
68,401 62,296 34,342 28,965
Discontinued operations 13,554 17,816 11,655 15,927
----------- ------------ ----------- ------------
81,955 80,112 45,997 44,892
----------- ------------ ----------- ------------
4. Exceptional items
Analysis of exceptional items recognised in arriving at operating profit from
continuing operations:
2007 2006
�000 �000
Onerous leases 791 370
Share-based payment charge 985 -
Costs related to offer process
for potential acquisition of the Group 619 -
------ ------
2,395 370
------ ------
Onerous leases
Following the disposal of the London-based search and selection business to
Redgrave Partners on 31 December 2007, Redgrave has now vacated the premises
leased by the group at 2 Sheraton Street, London WC2 (the "Sheraton Street
Property"). Redgrave was the only business operating out of the Sheraton Street
Property, the lease on which has an unexpired term of just over eight years at a
current annual rent of approximately �465,000 before rates, service charges and
other specific costs. The Group has no ongoing use for the Sheraton Street
Property and, whilst various options with regard to the property are being fully
investigated, an onerous lease provision has been raised in this regard.
The exceptional item in 2006 represents the cost provided in relation to ECHM's
previous premises which the Group has since assigned to third parties. A
decision was taken late in 2006 to co-locate ECHM, Morgan McKinley and the
Group's common back office functions in the same London office.
Share-based payment charge
In accordance with IFRS 2 "Share-based payments" the Group has recognised an
accelerated charge for all equity incentives and share options in issue at the
balance sheet date. This is to reflect the increased probability at the balance
sheet date of all such equity instruments vesting on a change of control of the
Group, in accordance with the scheme rules of all such instruments.
Deal-related costs
As a result of being in a protracted offer period the Group has necessarily
incurred professional costs and other expenses, predominantly to advisers
carrying out due diligence work and other third parties. This amount includes
�39,000 relating to additional fees and expenses to the independent
non-executive directors arising from duties pursuant to the offer process.
Further costs including contingent fees will be incurred during the year ending
31 December 2008.
5. Taxation
The charge based on the profit for the year comprises:
2007 2006
�000 �000
Current tax
UK corporation tax - continuing operations 846 1,363
- discontinuing operations 821 1,251
Overseas tax 551 353
--------- ---------
Current income tax charge 2,218 2,967
Amounts (over)/under provided in previous years (13) 30
--------- ---------
Total income tax charge 2,205 2,997
--------- ---------
Deferred tax
Origination and reversal of temporary differences 714 (102)
Impact of decrease in deferred tax rate (30% to 28%) (49) -
--------- ---------
Total deferred tax charge/(credit) 665 (102)
--------- ---------
Tax charge in the income statement 2,870 2,896
--------- ---------
Tax charge in the income statement is disclosed as follows:
Income tax expense on continuing operations 1,338 1,645
Income tax expense on discontinued operations 1,532 1,251
--------- ---------
2,870 2,896
--------- ---------
Tax relating to items charged/ (credited) to equity
Current tax:
Share-based payment (375) (538)
Deferred tax:
Share-based payment 1,130 1,429
--------- ---------
Tax charge/(credit) in the statement of recognised
income and expense 755 891
--------- ---------
6. Dividends
2007 2006
�000 �000
Amounts recognised as distributions to equity holders in the year:
Final dividend for 2006 of 2.6p per share (2005 - 2.3p) 984 734
Interim dividend for 2007 of 1.5p per share (2006 - 1.3p) 570 485
---------- ---------
Dividends paid 1,554 1,219
---------- ---------
7. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the parent by the weighted average number of ordinary shares
in issue during the year.
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 such as share options.
Adjusted earnings per share is calculated by subtracting profit from
discontinued operations and adding back the cost of exceptional items and the
related tax effect before applying the calculations of basic and diluted
earnings per share respectively. This has been disclosed because the directors
view this as a useful indicator of the underlying performance of the group.
2007 2006
�000 �000
Profit for the year 6,177 8,015
Profit for the year - discontinued operations (3,118) (3,750)
Exceptional items (continuing and discontinued operations) 2,395 370
Tax effect of exceptional items (299) (111)
--------- ---------
Profit from continuing operations before exceptional items
for adjusted earnings per share 5,155 4,524
--------- ---------
No. No.
Weighted average number of shares
used for basic and adjusted earnings per share 37,842,619 36,792,478
Dilutive effect of share plans 1,146,223 2,467,000
--------------- ---------------
Diluted weighted average number of shares
used for diluted earnings per share 38,988,842 39,259,478
--------------- ---------------
pence pence
Basic earnings per share 16.3 21.8
Diluted earnings per share 15.8 20.4
Adjusted basic continuing earnings per share 13.6 12.3
Adjusted diluted continuing earnings per share 13.2 11.5
8. Reconciliation of operating profit to net cash inflow from operating activities
2007 2006
�000 �000
Profit before taxation 9,048 10,911
Adjustments for:
Share-based payment charge 1,148 280
Gain on disposals (2,185) -
Depreciation 480 370
Amortisation of intangible assets 124 91
Interest (income)/expense (161) 41
----------- -----------
8,454 11,693
Decrease/(increase) in trade and other receivables 2,688 (4,853)
(Decrease)/increase in trade and other payables (1,232) 833
----------- -----------
Net cash flow from operating activities 9,910 7,673
----------- -----------
9. Discontinued operations
Results of the discontinued business units are presented below:
UK Northern London Search &
Business Selection Businesses Total
2007 2006 2007 2006 2007 2006
�000 �000 �000 �000 �000 �000
Net fee income 2,635 3,398 9,020 12,529 11,655 15,927
--------- -------- -------- -------- -------- -------- --------
Administrative expenses (2,567) (3,004) (6,467) (8,460) (9,034) (11,464)
Exceptional
administrative expenses (36) - (127) - (163) -
--------- -------- -------- -------- -------- -------- --------
Total administrative
expenses (2,603) (3,004) (6,594) (8,460) (9,197) (11,464)
-------- -------- -------- -------- -------- --------
Operating profit and
profit before tax from
discontinued operation* 32 394 2,425 4,069 2,457 4,463
---------- -------- -------- -------- -------- -------- --------
Gain on disposal of
discontinued operation 656 - 2,237 - 2,893 -
Provision against
recoverability of proceeds (700) - - - (700)
---------- -------- -------- -------- -------- -------- --------
Net gain/(loss) on disposal
of discontinued operation (44) - 2,237 - 2,193 -
Tax expense (12) (126) (1,520) (587) (1,532) (713)
-------- -------- -------- -------- -------- --------
(Loss)/profit for the year
from discontinued operations* (24) 268 3,142 3,482 3,118 3,750
-------- -------- -------- -------- -------- --------
The tax expense is
analysed as follows:
On profit on ordinary
activities for the year (22) (126) (811) (587) (833) (713)
On the profit/(loss) on
discontinuance 5 - (715) - (710) -
-------- -------- -------- -------- -------- --------
(17) (126) (1,526) (587) (1,543) (713)
-------- -------- -------- -------- -------- --------
*Before allocation of central costs related to the Group's shared service
functions and plc status.
The total disposal consideration and major classes of assets and liabilities
sold is analysed as follows:
UK Northern London Search &
Business Selection Businesses
�000 �000
Trade debtors and accrued income 1,017 249
Property, plant and equipment 9 29
----------- -----------
Total assets and liabilities disposed 1,026 278
----------- -----------
Total disposal consideration 1,746 3,134
Net cash inflow during the year from disposal
of businesses 468 -
----------- -----------
10. Adoption of IFRSs in 2007
The following changes to accounting policies and presentation resulted from the
transition to IFRSs. The amount of the adjustments can be seen in the relevant
reconciliations at each reporting date.
Computer software (note a)
Computer software has been reclassified from property, plant and equipment to
other intangible assets. Other intangible assets are increased by corresponding
amounts at these dates.
Deferred tax assets and other receivables (note b)
Under UK GAAP immaterial assets due in greater than one year did not have to be
split out from current assets on the face of the balance sheet. Under IFRSs
non-current assets are required to be split out from current assets on the face
of the balance sheet. Therefore deferred tax assets and rent deposit receivables
due in greater than one year have been reclassified to non-current assets.
Additional disclosure on the face of the balance sheet relating to current
liabilities (note c)
Under IFRSs financial liabilities and current income tax payable are required to
be disclosed on the face of the balance sheet, rather than in a note to the
financial statements.
Cumulative translation differences (note d)
Translation differences arising on consolidation of all foreign operations were
deemed to be zero at 1 January 2006. Foreign exchange differences arising from
the translation of foreign operations subsequent to that date are taken directly
to a separate component of equity.
Deferred taxation on share options (note e)
Under IFRSs, the potential future income tax relief available to a company when
share options are exercised should be calculated at the relevant reporting date.
IFRSs state that the best estimate of the share price at a future date is the
share price on the relevant reporting date and this should be used in
calculating the deferred tax asset in respect of share options. Changes in the
number of share options, for example those that are exercised or that lapse, and
changes in the share price from one reporting date to the next lead to changes
in the deferred tax asset recognised in respect of share options. These changes
are accounted for through deferred tax in the income statement, except to the
extent that they exceed the cumulative charge in the income statement made in
accordance with IFRS 2. Where changes do exceed the cumulative charge in the
income statement, the changes should be recognised in equity. On exercising
options, the tax relief available to the company for offset is taken to the
current tax charge but this is limited to the cumulative IFRS 2 charge posted to
the financial statements. The remainder of the tax relief is taken through
equity.
Goodwill (note f)
Under IFRSs, goodwill arising from the acquisition of foreign operation after
the date of transition should be expressed in the functional currency of that
foreign operation. As such the goodwill relating to the acquisition of Ingram
Consultancy Limited is now valued in United Arab Emirates Dirhams instead of
Sterling.
Further, under IFRSs goodwill is not amortised but is instead measured at cost
less impairment. Under UK GAAP, goodwill was amortised over its useful economic
life up to a presumed maximum of 20 years. The effect of the transition is to
decrease administrative expenses and increase operating profit in the year ended
31 December 2006.
Presentation of financial reports
The overall presentation of interim financial reports and disclosures have been
effected due to compliance with IAS 1 "Presentation of Financial Statements" and
IAS 7 "Cash Flow Statements".
Restatement of balance sheet at transition date:
At 1 January 2006
Under UK Under
GAAP IFRSs
Effect of transition to IFRSs
a) b) c) d) e)
�000 �000 �000 �000 �000 �000 �000
Non-current assets
Other intangible
assets - 262 262
Goodwill 33,987 33,987
Property, plant and
equipment 929 (262) 667
Deferred tax asset - 156 2,691 2,847
Other receivables - 663 663
------ ------- ------ ------ ------ ------ ------
34,916 - 819 - - 2,691 38,426
------ ------- ------ ------ ------ ------ ------
Current assets
Trade and other
receivables 15,469 (819) 14,650
Cash and cash
equivalents 3,169 3,169
Loan note deposits 1,307 1,307
------ ------- ------ ------ ------ ------ ------
19,945 - (819) - - - 19,126
------ ------- ------ ------ ------ ------ ------
Total assets 54,861 - - - - 2,691 57,552
------ ------- ------ ------ ------ ------ ------
Current
liabilities
Trade and other
payables (10,500) 3,469 (7,031)
Financial
liabilities - (1,307) (1,307)
Corporation tax
liabilities - (1,553) (1,553)
Deferred
consideration - (609) (609)
Provision for
liabilities - (1,240) (1,240)
------- ------- ------ ------ ------ ------ ------
(10,500) - - - - - (11,740)
------- ------- ------ ------ ------ ------ ------
Non-current
liabilities
Provision for
liabilities (3,442) 1,240 (2,202)
------- ------- ------ ------ ------ ------ -------
Total liabilities (13,942) - - - - - (13,942)
------- ------- ------ ------ ------ ------ -------
Net assets 40,919 - - - - 2,691 43,610
------- ------- ------ ------ ------ ------ -------
Equity
Called up share
capital 362 362
Share premium 39,303 39,303
Other reserves - 2,701 2,701
Retained earnings 1,254 (10) 1,244
------- ------- ------ ------ ------ ------ -------
40,919 - - - - 2,691 43,610
------- ------- ------ ------ ------ ------ -------
Reconciliation of profit for the year ended 31 December 2006:
Effect of
Under UK transition to Under
GAAP IFRSs IFRSs
�000 �000 �000
Turnover 80,112 - 80,112
Cost of sales (35,220) - (35,220)
------------- ------------- -------------
Net fee income 44,892 - 44,892
Administrative expenses (35,394) 1,823 (33,571)
Exceptional administrative expenses (370) - (370)
------------- ------------- -------------
Operating profit 9,128 1,823 10,951
Net finance income/(expense) (40) - (40)
------------- ------------- -------------
Profit before tax 9,088 1,823 10,911
Income tax expense (2,406) (490) (2,896)
------------- ------------- -------------
Profit for the period 6,682 1,333 8,015
------------- ------------- -------------
Profit under UK GAAP 6,682
Non-amortisation of goodwill after
transition date (note f) 1,823
Reclassification of deferred tax
relating (490)
to share options (note e) -------------
Profit under IFRSs 8,015
-------------
The amounts shown above relate both to continuing operations and the operations
discontinued in 2007.
Reconciliation of equity at 31 December 2006:
Under UK Effect of transition to IFRSs Under
GAAP Reclass Remeasure. IFRSs
Note �000 �000 �000 �000
Non-current
assets
Other intangible
assets a - 352 - 352
Goodwill f 33,724 - 1,759 35,483
Property, plant
and equipment b 1,125 (352) - 773
Deferred tax b,e - 210 1,310 1,520
asset
Other receivables b - 836 - 836
---------- ---------- ------------ -------
34,849 1,046 3,069 38,964
---------- ---------- ------------ -------
Current assets
Trade and other
receivables b 20,110 (1,046) - 19,064
Cash and cash
equivalents 4,307 - - 4,307
Loan note
deposits 453 - - 453
---------- ---------- ------------ -------
24,870 (1,046) - 23,824
---------- ---------- ------------ -------
Total assets 59,719 - 3,069 62,788
---------- ---------- ------------ -------
Current
liabilities
Trade and other
payables c (9,688) 1,854 - (7,834)
Contingent
consideration c - (1,077) (1,077)
Current income
tax payable c - (1,401) - (1,401)
Financial
liabilities c - (453) - (453)
Provisions c - (188) - (188)
---------- ---------- ------------ -------
(9,688) (1,265) - (10,953)
---------- ---------- ------------ -------
Non-current
liabilities
Provisions c (2,525) 2,343 - (182)
Contingent
consideration c - (1,078) - (1,078)
---------- ---------- ------------ -------
(2,525) 1,265 - (1,260)
---------- ---------- ------------ -------
Total liabilities (12,213) - - (12,213)
---------- ---------- ------------ -------
Net assets 47,506 - 3,069 50,575
---------- ---------- ------------ -------
Equity
Called up share
capital 373 - - 373
Share premium 40,291 - - 40,291
Foreign exchange
reserves d,f - (155) (64) (219)
Other reserves e - - 1,272 1,272
Retained earnings d,e,f 6,842 155 1,861 8,858
---------- ---------- ------------ -------
Total equity 47,506 - 3,069 50,575
---------- ---------- ------------ -------
Reconciliation of equity at 31 December 2006 (continued):
Analysis of
remeasurement
under IFRSs
�000
Total equity under UK GAAP 47,506
Goodwill not amortised after date of transition 1,823
Deferred tax on share options 1,310
Revaluation of goodwill stated in foreign currency (64)
-------------
Total adjustment to equity 3,069
-------------
Total equity under IFRSs 50,575
-------------
This information is provided by RNS
The company news service from the London Stock Exchange
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Imprint (LSE:IMP)
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Imprint (LSE:IMP)
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