TIDMSKHG
RNS Number : 2893L
Sky High PLC
03 September 2012
SKY HIGH PLC
(AIM: SKHG)
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2012
HIGHLIGHTS
Sky High Plc ("Sky High" or the "Group"), the data collection
and analysis group, today announces its results for the year ended
31 March 2012. This financial year has seen a significant
improvement in trading and the results show a return to
profitability for the Group. This improvement has been achieved
despite the backdrop of what remains a challenging economic
environment, particularly in the UK.
The Group achieved the following full year results:
-- Group revenue up 22% to GBP5.8 million (2011: GBP4.8m million).
-- Group operating profit of GBP203k (2011: GBP212k loss) which
is a GBP415k improvement from last year.
-- Group profit before tax of GBP80k (2011: GBP250k loss), after
exceptional costs of GBP76k relating to acquisition of Count on
Us.
-- UK Traffic turnover of GBP3,322k was 21% up on 2011 and the
segment made an operating profit of GBP189k (2011: GBP26k loss)
-- Australia Traffic revenue grew 26% in the year to GBP2.0m
(2011: GBP1.6m) and operating profit increased by 106% to
GBP151k.
-- GBP311k of operating cash flow generated (2011: GBP190k)
Other key points of note include
-- Acquisition of Count on Us in March 2012 which, in the
Directors opinion, provides the potential to transform the UK
Traffic business into the UK's market leading transport data
collection business. The integration of this business is on track
and initial performance has exceeded the Directors
expectations.
-- All business segments have shown revenue growth and improved profit performance in year.
-- Further development, roll out and first revenue generation of
our technology innovative vehicle and pedestrian tracking
services.
-- Framework contracts secured in this financial year should
positively impact performance going forward
-- Current trading is well ahead of expectations and the Group
is well positioned for further growth and development this year
Mark Mattison, Sky High's Chief Executive, said:
"It is pleasing to be able to report on both a positive set of
results and a positive outlook for the Group after the challenges
of the previous financial year and despite the continued
uncertainty in the UK economy. There are signs that the market for
traffic data collection has improved, largely driven by the some of
the government's infrastructure projects. I am excited about the
number of development opportunities that the business has and I am
increasingly confident about the prospects for the Group moving
forward."
For further information, please contact:
Sky High Plc
Mark Mattison, Chief Executive Tel: 01937 833 933
Officer
Alex Johnson, Finance Director Tel: 01937 833 933
WH Ireland Limited
Mike Coe/ Marc Davies Tel: 0117 945 3470
Chairman's statement
I am pleased to present the Chairman's Statement for Sky High
Plc together with its subsidiaries (the "Group") for the year ended
31 March 2012 which has been a much more positive year following a
particularly challenging period in the previous financial year.
Introduction
This financial year has seen a significant turnaround in trading
and the results show a return to profitability for the Group.
The acquisition of Count on Us in March this year is an
important step in the development of the Group as it provides the
potential to transform Sky High's UK traffic business into the UK's
market leading transport data collection business with unrivalled
skills, experience and geographic coverage.
It's particularly pleasing to be able to report that each
individual business unit has shown revenue growth and an improved
profit performance in the year. In the UK this improvement has been
achieved despite the backdrop of what remains a challenging
economic environment.
Australia Traffic has had an excellent year with revenue
exceeding GBP2m and the underlying operating profit increasing by
GBP74k (101%) after adjusting for currency fluctuations. This
performance reflects the efforts of the Australian team over the
last few years in developing the business and a market in Australia
which has been more buoyant as its economy has not been subjected
to same level of austerity measures as the UK.
Results
This year has seen the Group achieve a record turnover figure of
GBP5,779k (2011: GBP4,757k) and it is this 22% revenue growth that
has been the basis of the improved performance. The Group profit
before tax for the year was GBP80k (2011: GBP250k loss) which in
itself represents a significant turnaround in performance. However
the GBP80k profit is stated after charging exceptional costs of
GBP76k related to the acquisition of Count on Us. Operating profit,
which provides a better comparison for the trading profitability of
the Group, was GBP203k for this financial year compared to a loss
of GBP212k last year.
The improved results have be attributed to three main
factors:
-- the first full year impact of the DfT National Road Traffic
Census contract that was announced in February 2011 and commenced
in March 2011;
-- some permanent and other temporary operational cost
reductions in the UK business that were made in the second half of
the last financial year, some of which will also benefit this
financial year; and
-- the growth and strong performance of Australia Traffic.
Turnover and profits in the second half of the year were, as
expected, less than the first half of the year reflecting the
seasonal nature of the UK traffic market and the DfT contract. The
winter months are generally quiet as clients do not want data
collected at these times due to a combination of holidays and poor
weather, which makes the traffic flows and hence data
inconsistent.
Other notable developments in the year include projects being
undertaken in Canada and Uganda as the Group looks to develop its
international reach. Requests for us to undertake international
work are becoming more frequent and we continue to explore
opportunities for low risk international expansion where
appropriate.
In addition, the year has seen further development, roll out and
first revenue generation from our technologically innovative
Bluetooth vehicle and pedestrian tracking services. Our work in
this area has opened up a number of opportunities both in our core
markets with new clients and also in new potential markets.
A more detailed commentary by segment is included in the Chief
Executive Officer's Report and the Finance Director's Report.
Dividend
Despite the improved performance this year, it is the Board's
opinion that at present it would be more beneficial for the
business to retain cash to increase the level of working capital to
manage the larger combined business and to enable inward investment
where appropriate to assist in the growth of the business.
Accordingly, the Directors do not recommend the payment of a final
dividend for the year ending 31 March 2012.
Acquisitions
As announced on 16 March 2012, Sky High acquired the business
and trading assets of Count on Us Limited for a consideration of
GBP455k satisfied by the issue of 4,135,709 new ordinary shares. At
the same time the Company raised GBP371k, before expenses, through
the issue of 4,637,000 new ordinary shares at a price of 8p per
share. The acquisition was an important development for Sky High as
it significantly increased our UK market share by adding strong
operations in London, Wales and Scotland to our existing UK
operations. This acquisition has given us the opportunity to create
the market leading specialist transport-related data capture
company. As part of this acquisition Sir John Madejski and Nick
Lanigan were appointed to the Board as Non--Executive
Directors.
People
Our staff remain key to our business and I would like to take
this opportunity to thank them for their continued loyalty, hard
work and co-operation. I would particularly like to acknowledge the
support of all the Directors and the employees in UK Traffic
business where it was necessary to continue the reduced and
flexible working hours arrangements implemented last year into the
first part of this financial year.
Outlook
Sky High's strategy has three main objectives:
-- to increase market share in the UK transport market through
both organic growth and acquisitions;
-- to expand the Group's operations through acquisition in areas
complementary to Sky High's core skills of data collection and
project management; and
-- achieve low risk international expansion through developing existing contacts.
Our objectives in 2012/13 will be, first, to continue with the
integration of the Count on Us business and the realisation of the
synergy benefits from this acquisition. Second, we will look to
develop further the Bluetooth vehicle and pedestrian tracking
services and, third, we will continue to look to gradually expand
our international experience and presence.
As announced in the trading update on 23 July, the current
financial year has started well with overall trading in the first
quarter being well ahead of management expectations and the
equivalent period last year.
The Board remains sensitive to the conditions in the general
economy but is confident that, due to new contract wins, the
general improvement in the UK Traffic market and our continued
investment in business development, this financial year will see a
continued improvement in trading performance and further growth in
the Group.
Richard Jackson
Chairman
31 August 2012
Chief Executive Officer's report
I am delighted to provide an update on Sky High's business and
trading during the year ended 31 March 2012.
Overview
As outlined in the Chairman's Statement I am pleased to be able
to report on a positive year for the Group.
The Group's main operations are in the UK and Australia which
are supported by key suppliers in India and Korea who perform
certain data analysis processes for the respective traffic
businesses on an outsourced basis.
Whilst the majority of our work is in the UK and Australia we
have the capability to perform international projects if the
opportunities arise and this year has seen the Group undertake
initial projects in Uganda and Canada. We are looking to increase
the level of international work where there is the opportunity to
do this on a low risk basis. The Canadian project was won after we
were given the opportunity to present a paper on transport. Based
on our initial impressions this is a market we will investigate
further to see how we can progress.
An important event in the year was the acquisition of the Count
on Us business. Count on Us is one of the best known brands in the
UK traffic data collection market and it is a fantastic achievement
for the Group to have been able to acquire the business. As
outlined in the shareholder circular the acquisition represents an
excellent opportunity for Sky High to consolidate its market
position due to the strength of its business in London and Wales.
Bringing together the two businesses provides us with the
opportunity in the UK to create a company that has unrivalled
skills, experience and geographical coverage. I am pleased to
report that the integration of the business is going well and the
performance in these early months is exceeding our
expectations.
In addition to the Group returning to profitability there have
been a number of other positive developments within each business
segment that I will cover below.
Business Review
UK Traffic
The core UK traffic data collection market remained challenging
for the majority of the financial year. This was characterised by a
higher proportion of low value contracts which resulted in a very
competitive market. The nature of the projects meant there was
little or no customer requirement for the technical expertise,
technology or project management skills associated with larger
complex projects which are some of Sky High's strengths. This meant
the barriers to entry were low, prices fell and it was difficult to
win projects through the quality of service.
Despite this the UK Traffic revenue increased by GBP571k to
GBP3,322k because the fall in revenue from the core market was
mitigated by the revenue from the DfT contract.
Generating revenue from smaller lower value contracts also
impacted gross margin as in addition to price pressure there is
proportionately more cost, for example more travelling between jobs
and more set up time. This partly explains the reduction of gross
margin from 34.4% to 31.1%, further details of which are set out
the Finance Director's Report.
Towards the end of the financial year there was a definite pick
up in the market which was evidenced by an increase in both the
number and the value of the enquiries received.
As in previous years we maintained our focus on business
development and this has resulted in a number of framework contract
wins including Transport Scotland, Transport for Greater
Manchester, Devon County Council and others. Framework contracts do
not generally have guaranteed revenue but put the winning supplier
in the lead position to perform work when commissioned by the
government body or local authority. We expect the contracts that we
secured towards the end of the year to generate revenue in the next
financial year.
The business development team has also been responsible for the
further development of our technologically innovative Bluetooth
vehicle and tracking service. During the year we have delivered a
number projects using this service which has opened up new
opportunities within our core vehicle traffic market but has also
seen us enter the pedestrian tracking market which is a new market
for us. I am very excited about the potential of this service in
future years.
Australia Traffic
Australia Traffic had a very strong year with reported revenues
growing by GBP418k in the period to over GBP2m, of which GBP93k
relates to currency fluctuation between the UK Pound and the
Australian Dollar. The underlying revenue shows a year on year
increase of 20%.
The year produced an operating profit of GBP151k which was
GBP78k higher than last year. GBP4k of this increase relates to
currency fluctuations.
The performance reflects the hard work that the Australian team
has put in developing the business which is now one of the leading
market traffic data collection companies in Australia.
There was a focus on business development during the year which
paid off as the business was successful in winning a number of
projects with a value over GBP100k. The outsourced supply
arrangement with the supplier in Korea is important for our ability
to keep the cost base low and flexible so that the resources can be
matched to the work load.
The economy in Australia was also more buoyant than the UK as it
has not been subject to the same type of spending review process as
in the UK.
The Directors remain confident of the potential of Australian
business and the next stage of development will be to look to grow
its geographical market share in areas away from the current
operations in Sydney, Brisbane and Melbourne.
Data Capture
The strategy for Data Capture is to try to grow the business and
the Directors made the strategic decision to invest in business
development resources to try to achieve that growth. However, in
the current economic climate this has proved more difficult than we
had expected. The losses in the business are due to this investment
in business development.
New core retail data processing customers have been difficult to
secure but the business was successful in a tender for data
processing work with Transport for London which will come into
operation next financial year and will significantly increase the
turnover of this business.
In response to the difficulties in achieving growth we have
reduced the costs of core business development while maintaining a
focussed business development resource.
Outlook
After the difficulty of the last financial year it is pleasing
to be able to report a positive outlook for the Group. Whilst the
UK economy remains depressed, there are signs that the UK market
for traffic data collection has improved, largely driven by some of
the government's infrastructure projects.
This, combined with our increased geographical presence and
operational resources due to the acquisition of Count on Us, means
that the UK business is in a good position to move forward. The
Directors are confident, based on customer communications and the
levels of enquiries, that the market in the UK will remain similar
to current levels for the remainder of this current financial year.
Forecasting beyond this period in the current economic environment
is impossible.
In addition, I am excited about the number of development
opportunities that the business is facing, including the further
development of our technologically innovative Bluetooth vehicle and
tracking service and the opportunities for possible further
international expansion. We will be putting together plans that
allow us to take advantage of these opportunities.
The winning of the new contract in the data capture business
will see this business grow in the next financial year.
Australia Traffic should continue to develop and we believe that
this business will deliver more growth over the next few years,
providing the market conditions in Australia remain favourable.
As the Company, we reported to the stock market in July that
trading in the current financial year to date has been ahead of
management's expectation and the equivalent period last year. This
helps underpin the Board's belief that this year will see a further
improvement in trading performance for the Group.
Mark Mattison
Chief Executive Officer
31 August 2012
Finance Director's report
Results overview
The financial results for the year show a net profit before tax
of GBP80k compared to a loss of GBP250k in the previous year which
represents a significant improvement in trading in the year.
The GBP80k net profit is stated after GBP76k of exceptional
costs relating to the acquisition of Count on Us, so a more
appropriate year on year comparison is at the operating profit
level which produced a profit of GBP203k in this financial year
compared to a loss of GBP212k in the prior year, representing a
GBP415k improvement in profitability in the year.
The primary driver behind the improvement in performance is that
revenues increased by GBP1,022k in the year. This was achieved with
only a 0.2% drop in gross margin from the prior year, which
generated an additional GBP367k of gross profit. Overheads
including head office costs also decreased by GBP48k in the year.
This is largely due to the savings achieved on Non-Executive
Director fees, as they waived their fees last year when trading
conditions were particularly difficult.
The operating profit for the second half of the year was GBP39k
(2011: GBP71k). The operating profit stated in the interim
statement for the first six months' trading was GBP164k (2011:
GBP283k loss).
The DfT contract has impacted the seasonality of the business as
72% of this contract is performed in the first six months of the
financial year. In addition the second six months' trading
incorporates December and January where the performance is
seasonally low as it is impacted by holidays and poor weather when
clients generally do not want to conduct traffic surveys as it
produces inconsistent non-normalised data.
The reduction in operating profit for the second half of this
financial year compared to last financial year is due to an
increase in operating costs in the period compared to the prior
year which is commented on in more detail below.
As the Count on Us acquisition completed on 16 March 2012 there
is no material impact on the operating trading performance. More
detail on the accounting for the acquisition is covered below.
All the business segments showed improved operating profit
performance in the year. The UK Traffic business produced an
operating profit of GBP189k (2011: GBP26k loss), Australia Traffic
GBP151k (2011: GBP73k) and Data Capture a loss of GBP13k (2011:
GBP52k loss).
Head office costs before exceptional costs were GBP83k less than
last financial year at GBP124k.
Interest charges incurred primarily relate to the interest on
hire purchase contracts for the operational vehicles for
surveyors.
Revenue
Group revenue for the year was GBP5,779k (2011: GBP4,757k) which
represents an increase of 22% in the year. The turnover figure for
this year is the highest in the Group's history. Revenues were up
on the prior year in all three businesses.
UK Traffic revenue increased to GBP3,322k (2011: GBP2,751k), an
increase of 21%, whilst revenue in Data Capture increased by 8% to
GBP434k (2011: GBP401k). In Australia Traffic the revenue increased
by GBP418k of which GBP93k relates to foreign currency fluctuation
between the UK Pound and the Australian Dollar. The underlying
revenue shows a year on year increase of 20%. The average exchange
rate for this financial year is AUS$1.54 compared to AUS$1.63 in
the last financial year.
The UK Traffic revenue increase reflects the impact of the first
full year of DfT National Census contract which mitigated the
impact of a more difficult underlying core market due to the
general slowdown in the UK economy.
The Australia Traffic revenue increase results from a
combination of factors which include the buoyant nature of the
Australian economy at present and the business winning a number of
larger projects than it has done historically reflecting the
continued development of Australia Traffic into a market leading
position.
Gross margin
Group gross margin for the year was in line with management's
expectations and the prior year at 36.9% (2011: 37.1%).
The UK Traffic business saw a decline in gross margin to 31.1%
from a previous year figure of 34.4%. This decrease in margin is
due to reversals of some of the previous operating cost reductions.
The wage-related costs in the business were reduced in the second
half of the previous financial year; some of these reductions were
permanent but some were temporary as they involved staff taking
salary reductions or working reduced hours. These measures were put
in place to better align the cost base of the business to the
revenue whilst maintaining a core of operational resource so the
business could respond as and when the revenue levels picked up.
These temporary cost measures were partially reversed during the
year which has resulted in a decrease of gross profit from the
levels achieved during the second half of last year when the
maximum benefit of the cost savings was reflected in the
results.
Gross margin in Data Capture has improved in the year to 37.3%
(2011: 31.1%) due to a reduction of staff and changing some working
practices so production was more flexible and could be changed in
line with business needs.
Gross profit in Australia Traffic increased by 3.2% in the year
to 46.9% (2011: 43.7%) as a result of cost reductions in the last
financial year and by outsourcing the data analysis to Korea.
Overheads and other costs
Other administrative expenses include the operating overheads
and head office costs of GBP1,929k (2011: GBP1,977k). The reduction
was primarily due to a saving on Non-Executive Director fees
commented on above.
The exceptional costs of GBP76k are professional charges
relating to the acquisition of COU.
Tax
The tax charge in the year of GBP49k relates to tax charges on
Australia Traffic's profits (2011: GBP9k). There is no current year
tax charge in the UK as the business has generated further tax
losses to add to those brought forward from previous years. Last
year's tax charge included the release of a GBP61k provision for UK
deferred tax that was no longer required.
Balance sheet
Net assets as at 31 March 2012 were GBP2,386k (2011:
GBP1,553k).
Non-current assets have increased by GBP548k in the year and of
this increase GBP454k relates to the acquisition of Count on
Us.
After conducting a fair value review of the assets acquired as
at the acquisition date, GBP296k has been accounted for as
property, plant and equipment, which includes GBP186k of
operational survey equipment. GBP159k has been recognised as an
intangible asset relating to the customer relationships
acquired.
The goodwill of GBP730k represents historic goodwill and there
were no additions to this as part of the acquisition of Count on
Us.
GBP99k of the goodwill balance relates to Data Capture. In the
Directors' view there has been no impairment of this goodwill
despite the fact that Data Capture has reported losses in the last
two years.
The losses in the last two years have been due to strategic
decisions to attempt to grow the business. The Board made a
decision to invest in its sales and marketing resource to grow the
business. As commented on in previous annual reports and
announcements, this has been more difficult to do than we
anticipated. In reaching their assessment that there has been no
impairment, the Directors have looked at the underlying profit
after adjusting for the extra business development costs. This
adjusted profit is in line with the historic profits that were
acquired. The Directors are confident that the business will return
to profitability next year as the business development cost has
been reduced to reflect the difficulty in winning work. The
Directors remain confident that the more focussed business
development that remains will generate enough new business to cover
its cost.
Other significant additions to assets include GBP132k on motor
vehicles which included replacing part of the operating fleet and
GBP178k was invested on new operational assets.
Cash flow
The Group generated GBP311k (2011: GBP190k) net cash from
operating activities, the increase reflecting the improved
operating profit of the business.
The majority of the increase from receivables of GBP405k is due
to the invoicing arrangements related to the Count on Us
acquisition, when an additional GBP178k was invoiced at the end of
March. In general, debtors are managed effectively with the
majority of cash collected within 60 days, although the calculation
of debtors' days is 65 days. If adjusted for the Count on Us impact
it would only be 56 days (2011: 55 days).
The Group issued shares to the value of GBP808k in connection
with the acquisition of Count on Us. Of this amount, GBP455k
related to consideration for the business and GBP353k (net of
expenses) was raised in cash to provide increased working capital
to fund the deal costs and the integration of the business.
A GBP75k three year loan was secured with Royal Bank of Scotland
Group which provided additional working capital headroom.
In addition to the funds raised above, the UK business is
financed through an invoice discounting facility which has helped
the business grow during the last few years of economic
uncertainty. Australia Traffic has their own banking arrangements
which includes an overdraft facility of AUS$125k.
The purchase of plant and equipment of GBP620k includes GBP296k
for the purchase of the Count on Us tangible assets. Excluding
these additions, GBP178k was invested in operational survey
equipment in both the UK and Australia including GBP60k of
Bluetooth recording equipment in the UK and GBP98k of automatic
traffic counters in Australia which will help generate future
growth.
The Group generated an increase in cash and cash equivalents of
GBP157k which resulted in a net cash balance of GBP105k. Net debt
reduced by GBP20k as the increase in cash was offset by the loan
from Royal Bank of Scotland as part of the acquisition finance
and
Alex Johnson
Finance Director
31 August 2012
Consolidated statement of comprehensive income
For the year ended 31 March 2012
Year ended Year ended
31 March 31 March
2012 2011
GBP'000 GBP'000
-------------------------------------------------- -------- -----------
Continuing operations
Revenue 5,779 4,757
Cost of sales (3,647) (2,992)
-------------------------------------------------- -------- -----------
Gross profit 2,132 1,765
Other administrative expenses (1,929) (1,977)
-------------------------------------------------- -------- -----------
Profit/(loss) from operating activities 203 (212)
Exceptional costs on acquisition (76) -
Finance income 1 1
Finance expense (48) (39)
-------------------------------------------------- -------- -----------
Profit/(loss) before taxation 80 (250)
Taxation (49) 52
-------------------------------------------------- -------- -----------
Profit/(loss) from continuing operations 31 (198)
Other comprehensive income
(Loss)/gain on translation of foreign operations (6) 32
-------------------------------------------------- -------- -----------
Total comprehensive income/(loss) 25 (166)
-------------------------------------------------- -------- -----------
Basic profit per ordinary share 0.2p (1.6)p
-------------------------------------------------- -------- -----------
Diluted profit per ordinary share 0.2p (1.6)p
-------------------------------------------------- -------- -----------
Consolidated statement of financial position
As at 31 March 2012
2012 2011
GBP'000 GBP'000
------------------------------------------------- -------- --------
Non-current assets
Property, plant and equipment 1,096 693
Goodwill 730 730
Other intangible assets 179 34
------------------------------------------------- -------- --------
Total non-current assets 2,005 1,457
------------------------------------------------- -------- --------
Current assets
Trade and other receivables 1,686 1,281
Cash and cash equivalents 285 22
------------------------------------------------- -------- --------
Total current assets 1,971 1,303
------------------------------------------------- -------- --------
Total assets 3,976 2,760
------------------------------------------------- -------- --------
Current liabilities
Bank borrowings (205) (68)
Hire purchase contracts (115) (100)
Trade and other payables (1,034) (894)
Current tax payable - -
------------------------------------------------- -------- --------
Total current liabilities (1,354) (1,062)
------------------------------------------------- -------- --------
Non-current liabilities
Bank borrowings (50) -
Hire purchase contracts (186) (145)
------------------------------------------------- -------- --------
Total non-current liabilities (236) (145)
------------------------------------------------- -------- --------
Total liabilities (1,590) (1,207)
------------------------------------------------- -------- --------
Net assets 2,386 1,553
------------------------------------------------- -------- --------
Equity
Called up share capital 1,362 1,275
Share premium account 2,376 1,655
Profit and loss account 330 299
Exchange reserve 92 98
Reverse acquisition reserve (1,774) (1,774)
------------------------------------------------- -------- --------
Equity attributable to equity holders of parent 2,386 1,553
------------------------------------------------- -------- --------
Consolidated statement of changes in equity
For the year ended 31 March 2012
Called up Share Reverse
share premium acquisition Exchange Retained Total
capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- -------- ------------ --------- --------- --------
For the year ended 31 March 2012
At start of period 1,275 1,655 (1,774) 98 299 1,553
Total comprehensive income/(loss)
for the period - - - (6) 31 25
Shares issued 87 739 - - - 826
Professional fees - share issue - (18) - - - (18)
----------------------------------- ------ -------- ------------ --------- --------- --------
At end of period 1,362 2,376 (1,774) 92 330 2,386
----------------------------------- ------ -------- ------------ --------- --------- --------
Called up Share Reverse
share premium acquisition Exchange Retained Total
capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- -------- ------------ --------- --------- --------
For the year ended 31 March 2011
At start of period 1,275 1,655 (1,774) 66 497 1,719
Total comprehensive income for
the period - - - 32 (198) (166)
-------------------------------- ------ -------- ------------ --------- --------- --------
At end of period 1,275 1,655 (1,774) 98 299 1,553
-------------------------------- ------ -------- ------------ --------- --------- --------
Consolidated cash flow statement
For the year ended 31 March 2012
Year ended Year ended
31 March 31 March
2012 2011
GBP'000 GBP'000
------------------------------------------------------ -------- -----------
Net cash from operating activities 311 190
Taxation
-----------------------------------------------------------------------------
Income taxes paid (45) (86)
------------------------------------------------------ -------- -----------
Cash flow from investing activities
Acquisition of business (159) -
Exceptional costs on acquisition (76) -
Purchases of property, plant and equipment (620) (82)
Proceeds from disposal of property, plant
and equipment 16 20
Equity raised from share issue 808 -
Interest paid (48) (39)
Interest received 1 1
------------------------------------------------------ -------- -----------
Net cash inflow/(outflow) from investing activities (78) (100)
------------------------------------------------------ -------- -----------
Financing activities
Proceeds of new bank loan 75 -
Repayment of bank loans - (27)
Hire purchase repayments (106) (116)
------------------------------------------------------ -------- -----------
Net cash outflow from financing activities (31) (143)
------------------------------------------------------ -------- -----------
Net increase/(decrease) in cash and cash equivalents 157 (139)
------------------------------------------------------ -------- -----------
Effect of exchange fluctuations (6) 32
Cash and cash equivalents at 1 April (46) 61
------------------------------------------------------ -------- -----------
Cash and cash equivalents at 31 March 105 (46)
------------------------------------------------------ -------- -----------
As described in the accounting policies, bank overdrafts
repayable on demand fluctuate from being positive to overdrawn and
are considered an integral part of the Group's cash management for
cash flow statement purposes.
There is no material difference between the fair value and the
book value of cash and equivalents.
Notes to the consolidated financial statements
For the year ended 31 March 2012
1. General Information
Sky High Plc is a company incorporated in the United Kingdom
under the Companies Act 2006. The address of the registered office
is 12-14 Westgate, Tadcaster, Leeds, LS24 9AB. The nature of the
Group's operations and its principal activities is that of data
collection and analysis.
The financial information set out in this announcement does not
comprise the Group's statutory accounts for the years ended 31
March 2012 or 31 March 2011.
The financial information has been extracted from the statutory
accounts of the Company for the years ended 31 March 2012 and 31
March 2011. The auditors' opinion on those accounts was unmodified
and did not contain a statement under section 498 (2) or section
498 (3) Companies Act 2006 and did not include references to any
matters to which the auditor drew attention by the way of
emphasis.
The statutory accounts for the year ended 31 March 2011 have
been delivered to the Registrar of Companies, whereas those for the
year ended 31 March 2012 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
2. Going Concern
Having made appropriate enquiries and having examined the major
areas that could affect the Group's financial position, the
Directors are satisfied that the Group has adequate resources to
continue in operation for the foreseeable future. For this reason
they consider it appropriate to adopt the going concern basis in
preparing the financial statements.
3. Segment analysis
The primary reporting format is by business operations and then
split by geographical area on the same basis that management
reports are prepared for the chief operating decision maker. All
operations are UK based with the exception of Australia Traffic.
Since last year's annual report, management has reviewed the
relevant business segments for its own internal reporting purposes
and has amended the segmental reporting to reflect these
changes.
The relevant segments are presented below. Previously Australia
Traffic was described as Australia and what was previously
described as UK has now been split into UK Traffic, Data Capture
and Head Office.
There were no discontinued operations in the year.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
UK Australia Data Head Total
Traffic Traffic Capture Office for
Group
31 March 2012 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- ---------- -------- -------- --------
Revenue 3,322 2,023 434 - 5,779
------------------------------------------ -------- ---------- -------- -------- --------
Operating profit/(loss) 189 151 (13) (124) 203
Exceptional costs - - - (76) (76)
Finance income 1 - - - 1
Finance expenses (14) (34) - - (48)
------------------------------------------ -------- ---------- -------- -------- --------
Profit/(loss) before taxation 176 117 (13) (200) 80
Taxation - (49) - - (49)
------------------------------------------ -------- ---------- -------- -------- --------
Profit/(loss) from continuing operations 176 68 (13) (200) 31
------------------------------------------ -------- ---------- -------- -------- --------
Balance sheet
Total assets 2,034 822 206 914 3,976
------------------------------------------ -------- ---------- -------- -------- --------
Total liabilities (895) (391) (86) (218) (1,590)
------------------------------------------ -------- ---------- -------- -------- --------
UK Australia Data Head Total
Traffic Traffic Capture Office for
Group
31 March 2011 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- ---------- -------- -------- --------
Revenue 2,751 1,605 401 - 4,757
------------------------------------------ -------- ---------- -------- -------- --------
Operating profit/(loss) (26) 73 (52) (207) (212)
Finance income 1 - - - 1
Finance expenses (12) (27) - - (39)
------------------------------------------ -------- ---------- -------- -------- --------
Profit/(loss) before taxation (37) 46 (52) (207) (250)
Taxation 61 (9) - - 52
------------------------------------------ -------- ---------- -------- -------- --------
Profit/(loss) from continuing operations 24 37 (52) (207) (198)
------------------------------------------ -------- ---------- -------- -------- --------
Balance sheet
Total assets 1,155 724 117 764 2,760
------------------------------------------ -------- ---------- -------- -------- --------
Total liabilities (657) (409) (62) (79) (1,207)
------------------------------------------ -------- ---------- -------- -------- --------
4. Earnings per share
The calculation is based on the earnings attributable to
ordinary shareholders divided by the weighted average number of
Ordinary Shares in issue during the period as follows:
2012 2011
GBP'000 GBP'000
---------------------------------------------------------------- --------
Numerators: earnings attributable to equity 31 (198)
----------------------------------------------------- --------- --------
No. '000 No. '000
-------------------------------------------------------------- ---------
Denominators: weighted average number of equity shares:
Basic 13,129 12,745
Effect of dilutive potential ordinary shares: Share 228 -
options
----------------------------------------------------- ------- ---------
Diluted 13,357 12,745
----------------------------------------------------- ------- ---------
5. Acquisitions
On 16 March 2012, the Company acquired certain intangible and
tangible assets of Count on Us Limited which included the name and
future trading rights. It did not purchase the share capital of
Count on Us Limited.
As consideration the Company paid GBP455k settled by the issue
of 4,135,709 new Ordinary Shares valued at 11p (being the closing
middle market price on the business day prior to signing of the
Acquisition Agreement).
As part of the acquisition the Company also incurred a further
GBP76k of professional costs which are disclosed as exceptional
costs on the Consolidated Statement of Comprehensive Income.
Net assets acquired by the Group:
Book Included
value Adjustment in Group
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------- ---------
Intangible assets (see note 14) - 159 159
Tangible fixed assets 296 - 296
--------------------------------- ---- ----------- ---------
Consideration paid 296 159 455
--------------------------------- ---- ----------- ---------
6. Equity capital
The Company's share price had been traded near the nominal value
of its existing Ordinary Shares of 10p each for some time. Company
law prohibits companies from issuing new shares at less than the
nominal value, therefore the Directors reorganised the Company's
share capital on the terms set out below in order to issue more
share capital.
Under the capital reorganisation which took place on 16 March
2012, each existing Ordinary Share of 10p each was sub-divided into
one new Ordinary Share of 1p each and nine Deferred Shares of 1p
each.
The rights attaching to the new Ordinary Shares of 1p each will
be identical in all respects to those of the existing Ordinary
Shares of 10p each.
The Deferred Shares have no voting rights and do not carry any
entitlement to attend general meetings of the Company. They carry
only the right to participate in any return of capital to the
extent of the amount paid up or credited as paid up on each
Deferred Share but only after the holder of each new Ordinary Share
has received in aggregate capital repayments totalling
GBP10,000,000 per new Ordinary Share. These provisions are included
in the amendments to the articles. Accordingly, the Deferred Shares
are, for all practical purposes, valueless and it is the Board's
intention, at an appropriate time, to cancel the Deferred
Shares.
Also on 16 March 2012, Sky High acquired the business and
trading assets of Count on Us Limited for a consideration of
GBP455k satisfied by the issue of 4,135,709 new ordinary shares. At
the same time the Company raised GBP371k, before expenses, through
the issue of 4,637,000 new ordinary shares at a price of 8p per
share.
Ordinary Deferred Share Share
shares shares capital premium Total
No. '000 No. '000 GBP'000 GBP'000 GBP'000
------------------------------------ --------- -------- -------- --------
At 31 March 2011 12,745 - 1,275 1,655 2,930
Capital reorganisation - 114,703 - - -
Share issue 8,773 - 87 739 826
Professional fees - share
issue - - - (18) (18)
--------------------------- ------- --------- -------- -------- --------
At 31 March 2012 21,518 114,703 1,362 2,376 3,738
--------------------------- ------- --------- -------- -------- --------
2012 2011
GBP'000 GBP'000
---------------------------------------------------------------- --------
Allotted, called up and fully paid
21,517,946 Ordinary Shares of 1p each (2011: 12,744,737
Ordinary Shares of 10p each) 215 1,275
114,702,633 (2011: Nil) Deferred Shares of 1p each 1,147 -
-------------------------------------------------------- ------ --------
1,362 1,275
---------------------------------------------------------------- --------
The Company has granted the following share warrant
instruments:
Periods within which Number of shares
for which
Grant date Subscription price options are exercisable rights are exercisable
per share
------------ -------------------- ------------------------- -----------------------
12 October 12 October 2010 to 12
2009 GBP0.125 October 2012 160,666
12 October 12 October 2011 to 12
2009 GBP0.125 October 2012 160,666
12 October
2009 GBP0.125 12 October 2012 160,668
------------ -------------------- ------------------------- -----------------------
482,000
--------------------------------------------------------------------------------------
Share warrant instruments granted on 12 October 2009 have a
vesting period of one year, two years and three years as shown in
the tranches above. The options are exercisable by the option
holder at any point following the annual vesting date and prior to
12 October 2012.
7. Annual General Meeting
The Annual General Meeting of Sky High Plc will be held at 32
Bedford Row, London, WC1R 4HE on 28 September 2012 at 2.00pm.
The Annual Report and Accounts for the year ended 31 March 2012
will be sent by post to all shareholders on 6 September 2012. The
Annual Report and Accounts may also be viewed on Sky High Plc's
website at www.skyhighplc.co.uk .
This information is provided by RNS
The company news service from the London Stock Exchange
END
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