TIDMTMW
RNS Number : 4382Y
Timeweave plc
01 March 2012
1(st) March 2012
Timeweave plc
("Timeweave", or the "Company")
Preliminary Results for the twelve months ended 31(st) December
2011
Timeweave plc is the holding company of a group which
principally comprises a 50% holding in Amalgamated Racing Limited
("AMRAC"), sports hedging business SportingWins and cash deposits
(the "Group").
AMRAC is an equally owned joint venture company between
Racecourse Media Services Limited (which is in turn owned by a
number of the UK's foremost racecourses and Racecourse Investments
Limited) and Timeweave. AMRAC holds exclusive licences with 34
racecourses to broadcast pictures, audio and data from these
courses to licensed betting offices in the United Kingdom and the
Republic of Ireland on its dedicated television channel,
TurfTV.
SportingWins is the market leader in covering corporate risk
based on sports events.
Overview for the twelve months to 31(st) December 2011
-- Revenue increased to GBP28.2m (12 months to 31(st) December
2010: GBP27.6m, 13 months to 31(st) December
2010: GBP29.9m).
-- Operating profit before exceptional items of GBP7.8m (13
months to 31(st) December 2010: GBP8.0m).
-- Stable balance sheet: GBP25.06m in cash, excluding share of
AMRAC cash and GBP33.4m including share of AMRAC cash. (31(st)
December 2010: GBP31.9m including GBP9.9m being its share of AMRAC
cash and cash equivalents).
-- Strengthened by the appointment of a CEO with relevant
experience and skills who, together with the Board, conducted a
strategic evaluation of the business which has resulted in a focus
on achieving growth.
-- AMRAC secured a long-term contract with one of the UK's
leading bookmakers, William Hill, and acquired exclusive media
rights for three new tracks, taking the rights package to 34 tracks
to 2018.
-- Acquired assets of SportingWins which provides "hedging
agreements", to cover the financial risks relating to cover the
results of professional sports events. The business is trading well
with a number of contracts already signed with international
clients.
-- In this difficult economic climate, the Company continues to
evaluate numerous investment opportunities to deliver long-term
shareholder value and will focus on acquisitive and organic growth
through expansionary investment.
-- Since 2009, the Company has distributed GBP11.95m to
shareholders. This repaid shareholders' capital raised from the
2007 rights issue. Given the abundance of compelling investment
opportunities available, the Board has elected to retain capital to
invest for growth within the existing portfolio and through further
acquisitions. The Board has evaluated potential investment returns
and will therefore not pay a final dividend.
-- Post year end, Timeweave acquired GBP3.068m of convertible
loan notes in DCD Media Plc, the AIM listed independent television
production and distribution group. These loan notes were acquired
for a consideration of GBP2.087m using the Company's existing cash
reserves.
David Craven, Chief Executive Officer, commented: "We have made
significant progress this year. In the context of our strategic aim
to deliver long-term growth, our performance in 2011 is pleasing.
AMRAC has continued to perform well, SportingWins has signed
several contracts with further contracts in the pipeline, and we
have successfully begun our investment programme, establishing
foundations for the future of Timeweave.
"Against a backdrop of economic turmoil, our core business has
increased its profitability and we look to invest strongly wherever
opportunities arise. We are grateful for the support of our
shareholders as we seek to build a sustainable business."
For further information, please contact:
David Craven Timeweave plc +44 (0)7738 438 376
Rowena Murray / Andrew Pinder Investec Bank plc +44 (0)207 597
5970
Overview
The twelve months to 31(st) December 2011 saw the Group deliver
a solid operating performance within a competitive market
environment.
The Company was strengthened by the appointment of a CEO, who
together with the Board, conducted a strategic evaluation of the
business. Following this, the Board has focused its activities on a
strategy of (a) strengthening the AMRAC business with its partners
and providing further investment where appropriate to generate
shareholder returns; and (b) delivering and executing a programme
of acquisitive growth, seeking to deliver long-term shareholder
value whilst continuing to manage operational expenses.
Since completing the strategic evaluation, in July 2011 the
Company acquired the business and assets of SportingWins. Since the
year end, the Company has acquired convertible loan notes in DCD
Media plc. The Company continues to evaluate numerous further
investment opportunities and anticipates further acquisitions and
investment in the coming 12 months.
AMRAC Media Rights
AMRAC's trading was strong in the year, with subscriptions to
the TurfTV service holding up well in the face of difficult market
conditions. The AMRAC management team has a tight control of the
cost base with savings and efficiencies being delivered across the
range of operational activities. Benign weather conditions towards
the end of the financial year were also favourable for the
business, following the harsh conditions in 2010.
In August 2011, AMRAC signed a long-term deal with major High
Street bookmaker William Hill through to 31(st) January 2018 and
the business has also now contracted with most of the large
independent bookmaker groups on a similar basis. These new
agreements are a positive indicator for the coming year during
which the AMRAC executive management team will seek to negotiate
further agreements with the other major bookmakers.
AMRAC secured additional media rights with Exeter, Perth &
Kelso racecourses from 1(st) May 2012. These agreements demonstrate
significant progress in the development of AMRAC's strategy and,
with effect from 1(st) May 2012, 34 of the UK's 60 race tracks'
pictures and data rights will be licensed to AMRAC until 2018.
More than 680 horse racing fixtures from the leading racecourses
in the United Kingdom (including more than 90% of all group races)
are available as part of the TurfTV service. The service also
includes class leading virtual horse and dog racing plus live
previews with the biggest and best names from the world of sports
betting all aimed at meeting the needs of our clients and their
customers.
TurfTV is proud to deliver a premium racing broadcast service to
licensed betting offices in the UK and the Republic of Ireland from
the majority of UK racetracks and Timeweave will continue to work
closely with our partners and the AMRAC management to strengthen
and develop the service, including, where required, providing
further investment to generate appropriate returns. While mindful
of the well-publicised challenges facing the horse racing and
betting industry, the Board believes that AMRAC is well placed to
deliver strong and resilient returns over the coming years.
SportingWins
Following the acquisition of the SportingWins assets, the
business has been successfully integrated into the Group. The
business framework and systems, including agreements with key
business partners, have been established. The acquisition and
benefits of the new business structure have been communicated to
clients and intermediaries, directly and through the SportingWins
website and marketing. During 2011, deals were completed both with
historic clients of SportingWins and with new clients, and further
agreements have been completed in 2012. In total the business has
already covered over GBP5m of risk under Timeweave's ownership.
SportingWins business has historically been driven by the
sporting calendar, with revenues connected to results at the two
major international football tournaments (the FIFA World Cup and
the UEFA European Championship) significantly outweighing all other
revenues over the four year cycle. We have begun actively marketing
to our corporate clients a variety of hedging options connected to
Euro 2012. Alongside this, we will be developing our strategy for
the medium-term to build business connected to recurring annual
events so as to give a more sustainable and consistent revenue
stream year on year.
Discontinued Operations
A wholly owned subsidiary, Microskill (Services) Ltd, operating
as a single betting shop, ceased trading in December 2011. It was
opened to test development technologies for Alphameric Solutions
Ltd ("ASL") however after the disposal of ASL in 2010; the
rationale for operating the business was no longer relevant. The
Group had a provision in 2010 of GBP100,000 against this likely
closure and, having incurred some costs during the year, this
provision has been reduced to GBP80,000.
Results
Income Statement
Revenue for the twelve months to 31(st) December 2011 was
GBP28.2m (13 months to 31(st) December 2010: GBP29.9m and 12 months
to 31(st) December 2010: GBP27.6m).
Operating profit before exceptional items of GBP7.8m (13 months
to 31(st) December 2010: GBP8.0m).
Exceptional items incurred through the year included contracted
termination payments to the former Finance Director, costs
associated with the SportingWins acquisition and a write-down of
property assets.
The property write down amounts to GBP442,000 and relates to a
warehouse property that was pivotal to the Alphameric Solutions Ltd
business sold in 2010 but was not included in that disposal. The
Board felt it prudent to write-down the property value and post
year-end placed this property on the market for sale.
Operating profit from continuing operations (after exceptional
items) was GBP6.9m (13 months to 31(st) December 2010:
GBP7.5m).
Statement of Financial Position and Cash Flows
The Company retains a strong balance sheet and it is the Board's
intention to harness this to deliver a more diversified range of
growth opportunities for shareholders and, where the business
rationale exists, invest in the future growth potential within
AMRAC.
Our consolidated cash balances increased to GBP33.4m at year end
including GBP8.4m from its share of AMRAC cash and cash equivalents
(31(st) December 2010: GBP31.9m including GBP9.9m being its share
of AMRAC cash and cash equivalents). However, as in prior years,
this figure includes advance receipts within AMRAC. The Board
closely monitors the counterparty risk of its deposits.
Matchbet Litigation
On 31(st) May 2010, the disposal of ASL to Orbis Holdings
Limited ("Orbis"), a subsidiary of the NDS Group Limited, was
completed for a gross consideration of GBP15.475m. An indemnity was
provided by the Company to Orbis and ASL in respect of a prior
dispute with Matchbet Limited. The liability for Timeweave is
limited a maximum amount equal to the consideration received for
the disposal of ASL.
As reported in the interim results in August 2011, Matchbet has
issued proceedings against Openbet Retail Limited (formerly ASL)
relating to a software development agreement signed by the parties
in 2006 and Openbet Retail Limited has made a claim under the
indemnity in the sale agreement. Timeweave has conduct of the
proceedings under the terms of the sale agreement.
Timeweave is robustly defending the claim and the Board, having
engaged appropriate legal counsel, is confident of its position.
The Company estimates that it could incur legal fees of up to
GBP700,000 defending its position. The sum of GBP55,000 is included
in provisions at the year end and further accruals for legal fees
will be made in the coming months.
Dividend
In December 2007, the Company raised GBP11.1m gross from
shareholders via a rights issue to provide further funding to the
AMRAC venture with any surplus proceeds being used to strengthen
the balance sheet.
The Board recognised the shareholder support for the long-term
future of the business and set out a strategy committed to repay
this shareholder investment. We are pleased to advise that, since
September 2009, the Company has returned GBP11.95m to shareholders
via dividends, from a combination of disposals and operational
returns.
The Company continues to evaluate and consider a significant
number of acquisition and investment opportunities whilst
additionally strengthening our partnership in AMRAC and developing
the SportingWins business further.
Therefore, the Board has decided to manage capital within the
Group, focusing on a strategy generating stable long-term
shareholder growth. Consequently, with a focus on sustainable
growth and investment in these opportune times, the Company does
not intend to pay a final dividend.
The decision to suspend the dividend distribution is
specifically in response to an opportunistic investment
environment.
The Board has therefore chosen to retain its cash reserves to
take advantage of these market conditions.
Board Composition
In February 2011, Timeweave announced the appointment of David
Craven as CEO and that Mike McLaren had advised the Board that he
would leave the Group in April 2011. David was the Tote's Managing
Director of Totepool and E-Gaming for the previous six years and
has extensive experience in the gaming, leisure and media sector
having previously held senior roles with UK Betting plc, Wembley
plc, News Corp and UPC Chello.
In August 2011, Peter Bertram announced he would be stepping
down as Chairman of Timeweave at the end of September 2011. Peter
remained as Chairman of AMRAC through his service period until the
end of February 2012. Peter served the company well for almost five
years and the Board thanks him for his contribution to the
business.
The Board has not appointed a successor to the outgoing Chairman
at this time but will update shareholders in due course.
Executive Incentive Scheme
The Board believes that it is a fundamental principle of the
Company to align the interests of the Directors and other employees
with those of its shareholders. Accordingly, in 2011, the Group
introduced a new incentive plan to better align these
interests.
Following the recruitment of a CEO, the Board delivered this new
incentive scheme for key management. The mandate was to construct
an incentive plan to attract and retain individuals of the highest
calibre, to encourage and reward high performance and to set the
remuneration package and share incentives at a level based on total
shareholder returns.
In the new scheme, incentive compensation is possible only when
the initial objective has been satisfied; specifically when total
shareholder growth in excess of a cumulative annual hurdle (10%) is
delivered. The plan provides for an incentive awarded in a ratio of
cash and shares vesting over a subsequent three year period if the
annual objective has been satisfied. No cash or shares were awarded
during the year to 31(st) December 2011.
The Directors believe that this revised incentive scheme,
rewards performance and encourages executives to focus on
delivering the business strategy. In so doing, the Remuneration
Committee ensures an appropriate balance between fixed and
performance related pay is maintained.
In accordance with the ABI guidelines, the Company may issue a
maximum of 10% of its issued share capital in a rolling 10-year
period to employees under all its share plans and may issue no more
than 5% of its issued share capital in a rolling 10-year period to
the Executive Directors. The current operation of the Company's
share plans is within ABI limits.
Accounting Policies
The Group's interest in its joint venture AMRAC is consolidated
in accordance with IAS 31; 'Interests in Joint Ventures' such that
50% of AMRAC's revenues, costs and balance sheet headings are
included within the Group's consolidated financial information.
In accordance with IFRS 5 'Non-current Assets Held for Sale and
Discontinued Operations' we have reported the results for the
twelve months to 31(st) December 2011 excluding the trading
performance for Microskills. Results for Microskills were included
in discontinued activities, along with the results for Alphameric
Systems Ltd, in 2010.
Forward Looking Statements
This statement includes forward looking statements concerning
both the Group and AMRAC. Whilst these forward looking statements
are made in good faith, they are based upon the information
available at the date of this statement and upon current
expectations, projections and assumptions about future events.
These forward looking statements are subject to risks,
uncertainties and assumptions about the Group and AMRAC and should
be treated with the appropriate degree of caution. We undertake no
obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.
David Craven
Chief Executive Officer
1(st) March 2012
TIMEWEAVE PLC
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31(st) DECEMBER 2011
Year 13 Months
ended ended
31(st) December 31(st) December
Note 2011 2010
GBP'000 GBP'000
Revenue - continuing operations 2 28,218 29,877
Operating costs (21,285) (22,422)
------------------------------------------ ----- ----------------- -----------------
Operating profit before exceptional
administrative expenses 7,807 8,005
Exceptional administrative expenses 3 (874) (550)
Operating profit - continuing operations 6,933 7,455
Finance income 219 260
Profit on ordinary activities before
taxation 7,152 7,715
Income tax charge 5 (1,900) (1,942)
------------------------------------------ ----- ----------------- -----------------
Profit for the financial period
from continuing operations 5,252 5,773
Loss for the financial period from
discontinued operations 4 (35) (2,198)
------------------------------------------ ----- ----------------- -----------------
Profit for the financial period
attributable to equity holders of
the parent 5,217 3,575
------------------------------------------ ----- ----------------- -----------------
There are no items to be recognised in a separate consolidated
statement of comprehensive income and accordingly no such statement
has been included.
13 months
Year ended ended
6 31(st) December 31(st) December
Basic and diluted earnings/(loss)
per share 2011 2010
pence pence
Basic and diluted earnings per share
- continuing operations 2.3 2.6
Basic and diluted loss per share
- discontinued operations - (1.0)
----------------- -----------------
Total basic and diluted earnings
per share 2.3 1.6
----------------- -----------------
TIMEWEAVE PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31(st) DECEMBER 2011
31(st) 31(st) December
December
Note 2011 2010
GBP'000 GBP'000
Non current assets
Intangible assets 110 140
Property, plant and equipment 1,584 2,213
Trade and other receivables 3,778 5,167
Deferred tax asset 18 4
-------------------------------------------- -----
5,490 7,524
-------------------------------------------- ----- ---------- ----------------
Current assets
Trade and other receivables 8,058 8,513
Cash and cash equivalents 33,429 31,876
-------------------------------------------- ----- ---------- ----------------
41,487 40,389
Assets of a disposal group classified
as held-for-sale 4 60 80
Total current assets 41,547 40,469
Total assets 47,037 47,993
-------------------------------------------- ----- ---------- ----------------
Current liabilities
Trade and other payables (16,463) (16,733)
Current tax liability (1,262) (1,032)
---------- ----------------
(17,725) (17,765)
Liabilities of a disposal group classified
as held-for-sale 4 (329) (322)
Total current liabilities (18,054) (18,087)
-------------------------------------------- ----- ---------- ----------------
Net current assets 23,493 22,382
Non current liabilities
Provisions for liabilities (145) (425)
Total liabilities (18,199) (18,512)
-------------------------------------------- ----- ---------- ----------------
Net assets 28,838 29,481
-------------------------------------------- ----- ---------- ----------------
Equity attributable to equity holders
of the parent
Called up share capital 8 5,635 5,635
Merger relief reserve - -
Special Reserve 8,822 8,822
Retained earnings 14,381 15,024
-------------------------------------------- ----- ---------- ----------------
Total equity 28,838 29,481
-------------------------------------------- ----- ---------- ----------------
TIMEWEAVE PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 31(st) DECEMBER 2011
Year 13 Months
ended ended
31(st) December 31(st) December
Note 2011 2010
GBP'000 GBP'000
Cash flows from operating activities
--------------------------------------------- ---- ---------------- -------------------
Cash generated from operations before
exceptional administrative expenses 9 7,873 5,795
Exceptional administrative expenses 3 (874) (550)
--------------------------------------------- ---- ---------------- -------------------
Cash generated from operations 6,999 5,245
Taxation paid (1,684) (399)
Net cash generated from operating
activities 5,315 4,846
--------------------------------------------- ---- ---------------- -------------------
Cash flows from investing activities
Interest received 219 260
Purchase of property, plant and equipment (126) (665)
Purchase of intangible assets (9) -
Loan granted to joint venture 2,000 (2,000)
Net proceeds on disposal of discontinued
operations 8 - 12,770
Cash disposed of with subsidiary
undertaking - (5)
Net cash generated from investing
activities 2,084 10,360
--------------------------------------------- ---- ---------------- -------------------
Cash flows from financing activities
Dividends paid to the Company's shareholders 7 (5,860) (4,396)
--------------------------------------------- ----
Net cash used in financing activities (5,860) (4,396)
--------------------------------------------- ---- ---------------- -------------------
Increase in cash and cash equivalents
for the period 1,539 10,810
Cash and cash equivalents at beginning
of period 31,573 20,763
--------------------------------------------- ---- ---------------- -------------------
Cash and cash equivalents at end
of period 33,112 31,573
--------------------------------------------- ---- ---------------- -------------------
Comprising
Bank overdraft included in liabilities
held-for-sale (317) (303)
Cash and cash equivalents - continuing
operations 33,429 31,876
--------------------------------------------- ---- ---------------- -------------------
33,112 31,573
--------------------------------------------- ---- ---------------- -------------------
TIMEWEAVE PLC
CONSOLIDATED STATEMENT OF CHANGES OF EQUITY
YEAR ENDED 31(st) DECEMBER 2011
Merger
Share relief Special Retained
capital reserve Reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- --------- -------
At 1(st) December 2009 5,635 1,320 8,822 14,525 30,302
Profit and total comprehensive
income for the period - - - 3,575 3,575
Transactions with owners
Cancellation of merger reserve
arising from the disposal of
the Solutions business - (1,320) - 1,320 -
Dividends paid (Note 7) - - - (4,396) (4,396)
At 31(st) December 2010 5,635 - 8,822 15,024 29,481
-------- -------- -------- --------- -------
Profit and total comprehensive
income for the period - - - 5,217 5,217
Transactions with owners
Dividends paid (note 7) - - - (5,860) (5,860)
At 31(st) December 2011 5,635 - 8,822 14,381 28,838
-------- -------- -------- --------- -------
TIMEWEAVE PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31(st) DECEMBER 2011
1. BASIS OF PREPARATION
This preliminary announcement for the year ended 31(st) December
2011 has been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union.
Details of the accounting policies are those set out in the
annual report for the year ended 31(st) December 2010.
The preliminary financial information does not constitute
statutory accounts (within the meaning of section 435 of the
Companies Act 2006) for the financial periods ended 31(st) December
2011 and 31(st) December 2010 but has been derived from those
accounts. Statutory accounts for 2010 have been delivered to the
Registrar of Companies and those for the year ended 31(st) December
2011 will be delivered following the Company's annual general
meeting. The auditors have reported on those accounts and their
reports were unqualified and did not contain statements under
section 498 (2) or (3) of the Companies Act 2006.
2. SEGMENTAL INFORMATION
YEAR ENDED 31(st) DECEMBER 2011
AMRAC Other Total
GBP'000 GBP'000 GBP'000
Revenue from external customers 27,600 618 28,218
---------------------------------------------- --------- --------- ---------
Operating profit/(loss) before exceptional
administrative expenses 8,443 (636) 7,807
Exceptional administrative expenses - (874) (874)
---------------------------------------------- --------- --------- ---------
Operating profit/(loss) 8,443 (1,510) 6,933
Net finance income 219
---------------------------------------------- --------- --------- ---------
Profit on ordinary activities before
taxation 7,152
Income tax charge (1,900)
---------------------------------------------- --------- --------- ---------
Profit for the financial period from
continuing operations 5,252
Loss for the financial period from
discontinued operations (35)
---------------------------------------------- --------- --------- ---------
Profit for the financial period attributable
to the equity holders of the parent 5,217
---------------------------------------------- --------- --------- ---------
Assets and liabilities
Segment assets 19,644 27,333 46,977
Segment liabilities (17,539) (331) (17,870)
---------------------------------------------- --------- --------- ---------
Net assets 2,105 27,002 29,107
---------------------------------------------- --------- --------- ---------
Net liabilities held-for-sale (269)
Net assets 28,838
---------------------------------------------- --------- --------- ---------
Other information - continuing operations
Capital expenditure 110 16 126
Depreciation 199 43 242
Amortisation of intangibles 39 - 39
---------------------------------------------- --------- --------- ---------
2. SEGMENTAL INFORMATION (continued)
13 MONTHS ENDED 31(st) DECEMBER 2010
AMRAC Other Total
GBP'000 GBP'000 GBP'000
Revenue from external customers 29,877 - 29,877
------------------------------------------------- --------- --------- ---------
Operating profit/(loss) before exceptional
administrative expenses 8,616 (611) 8,005
Exceptional administrative expenses (127) (423) (550)
------------------------------------------------- --------- --------- ---------
Operating profit/(loss) 8,489 (1,034) 7,455
Net finance income 260
------------------------------------------------- --------- --------- ---------
Profit on ordinary activities before
taxation 7,715
Income tax charge (1,942)
------------------------------------------------- --------- --------- ---------
Profit for the financial period from
continuing operations 5,773
Loss for the financial period from discontinued
operations (2,198)
------------------------------------------------- --------- --------- ---------
Profit for the financial period attributable
to the equity holders of the parent 3,575
------------------------------------------------- --------- --------- ---------
Assets and liabilities
Segment assets 21,781 26,132 47,913
Segment liabilities (17,725) (465) (18,190)
------------------------------------------------- --------- --------- ---------
Net assets 4,056 25,667 29,723
------------------------------------------------- --------- --------- ---------
Net liabilities held-for-sale (242)
Net assets 29,481
------------------------------------------------- --------- --------- ---------
Other information - continuing operations
Capital expenditure 77 - 77
Depreciation 266 55 321
Amortisation of intangibles 40 - 40
------------------------------------------------- --------- --------- ---------
3. EXCEPTIONAL ADMINISTRATIVE EXPENSES
The exceptional administrative expenses of GBP874,000 (2010:
GBP550,000) relate to termination payments to Mike McLaren
(GBP392,000), costs associated with the SportingWins acquisition
(GBP40,000) and write-down of property value (GBP442,000).
4. LIABILITIES OF DISPOSAL GROUP HELD-FOR-SALE AND DISCONTINUED
OPERATIONS
(a) Closure of Microskill (Services) Limited
In November 2010, the board of directors agreed to seek a buyer
for the Group's wholly owned subsidiary, Microskill (Services)
Limited, and consequently classified its assets and liabilities as
held for sale. The business was closed during the year, with some
assets and liabilities remaining to be sold at year end. The assets
and liabilities have not been separately analysed as they are not
significant to the Group.
(b) Disposal of Alphameric Solutions Limited
On 31(st) May 2010, the Group disposed of its wholly owned
subsidiary Alphameric Solutions Limited, which subsequently changed
its name to OpenBet Retail Limited. This represented a separate
segment of business, and as a result, these operations have been
treated as discontinued operations.
(c) Analysis of the loss for the financial period from
discontinued operations
The results of Microskill (Services) Limited have been treated
as discontinued operations in both the current year and the prior
period. Discontinued operations also included the results of
Alphameric Solutions Limited up to the date of disposal in May
2010. A single amount is shown on the face of the consolidated
income statement comprising the post tax result of discontinued
operations and the post tax loss on disposal of the Solutions
business. The combined results of these operations have been
summarised below:
Year 13 Months
ended 31(st) ended 31(st)
December December
2011 2010
GBP'000 GBP'000
Revenue 850 6,876
----------------------------------------- ------------- -------------
Operating loss before impairment
of goodwill (81) (886)
Impairment of goodwill - (162)
----------------------------------------- ------------- -------------
Loss on ordinary activities from
discontinued operations before taxation (81) (1,048)
Income tax credit 46 25
----------------------------------------- ------------- -------------
Loss for the period from discontinued
operations (35) (1,023)
Loss on disposal of discontinued
operations - (1,175)
----------------------------------------- ------------- -------------
Loss for the period from discontinued
operations attributable to equity
owners of the parent (35) (2,198)
----------------------------------------- ------------- -------------
Cash flows from discontinued operations
Year 13 Months
ended ended 31
31(st) December December
2010
2011
GBP'000 GBP'000
Net cash flows from operating activities (3) (2,994)
Net cash flows from investing activities - (588)
Net cash flows from financing activities - -
----------------------------------------- ---------------- ---------
Net cash flows (3) (3,582)
----------------------------------------- ---------------- ---------
5. INCOME TAX CHARGE
Income tax recognised in profit or loss
The relationship between the expected tax charge based on the
effective tax rate of the Group at 26% (2010: 28%) and the tax
charge actually recognised in the income statement can be
reconciled as follows:
Year 13 Months
ended 31(st) ended 31(st)
December December
2011 2010
GBP'000 GBP'000
Profit for the period before taxation from
continuing operations 7,152 7,715
Tax rate 26.6% 28%
Expected tax expense 1,902 2,160
Adjustment for non-deductible items 119 -
Adjustment for non-taxable income - (36)
Movement in deferred tax not provided (15) -
Effect of current period events on current
tax prior period balances (96) (197)
Effect of current period events on deferred
tax prior period balances (10) 15
-------------------------------------------------- ------------- -------------
Actual tax expense 1,900 1,942
-------------------------------------------------- ------------- -------------
Comprising
Current tax expense 2,013 2,118
Current tax - adjustments in respect of prior
periods (84) (197)
Deferred tax expense (15) 6
Deferred tax - adjustments in respect of prior
periods (1) 15
Deferred tax - reversal of temporary differences (13) -
Total expense 1,900 1,942
-------------------------------------------------- ------------- -------------
During the year the Corporation Tax rate reduced from 28% to
26%, resulting in an effective tax rate for the year of 26.6%.
The adjustments made to current tax in respect of previous
periods relate to revisions of estimates previously made and
adjustments to provisions previously considered necessary but are
now considered surplus to requirements.
In addition to the income tax charge for the period noted above,
the Group has recognised an income tax credit of GBP46,000 (2010:
GBP25,000) in relation to discontinued activities (Note 4c).
6. EARNINGS PER SHARE
13 months
Year ended ended 31(st)
31(st) December December
Earnings per share 2011 2010
pence pence
Basic and diluted earnings per share for
the period from continuing operations before
exceptional administrative expenses 2.7 2.8
Exceptional administrative expenses per share (0.4) (0.2)
------------------------------------------------ ------------------ -------------
Basic and diluted earnings per share - from
continuing operations 2.3 2.6
Basic and diluted loss per share - discontinued
operations - (1.0)
------------------------------------------------ ------------------ -------------
Total basic and diluted earnings per share 2.3 1.6
------------------------------------------------ ------------------ -------------
6. EARNINGS PER SHARE (continued)
13 Months
Year ended Ended 31(st)
31(st) December December
Calculation of earnings 2011 2010
GBP'000 GBP'000
Earnings for the period from continuing operations
before exceptional administrative expenses 6,126 6,323
Exceptional administrative expenses (874) (550)
--------------------------------------------------- ---------------- -------------
Earnings for the period from continuing operations 5,252 5,773
Loss for the period from discontinued operations (35) (2,198)
--------------------------------------------------- ---------------- -------------
Earnings used in the calculation of total
basic and diluted earnings per share 5,217 3,575
--------------------------------------------------- ---------------- -------------
13 Months
Year ended ended 31(st)
31(st) December December
Weighted average number of shares 2011 2010
million million
Weighted average number of shares for the
purposes of the basic and diluted earnings
per share (all measures) 225.4 225.4
-------------------------------------------- ---------------- -------------
Earnings per share before exceptional administrative expenses
has been presented in addition to the earnings per share, as in the
opinion of the Directors, this provides shareholders with a more
meaningful representation of the earnings derived from the Group's
on-going businesses.
The share options are not dilutive and therefore basic and
diluted earnings per share are the same.
7. DIVIDENDS
2011 2010
GBP'000 GBP'000
Ordinary dividends paid
Final dividend paid for the period ended
30(th) November 2009 of 0.95 pence (2009:
Nil) per ordinary share - 2,142
Interim dividend paid for the period ended
31(st) December 2010 of 1.0 pence (2009:
Nil) per ordinary share
Final dividend paid for the period ended
31(st) December 2010 of 1.6 pence (2010: - 2,254
0.95 pence) per ordinary share
Interim dividend paid for the period ended 3,606 -
31(st) December 2011 of 1.0 pence (2010:
1.0 pence) per ordinary share 2,254 -
-------------------------------------------- ------- -------
5,860 4,396
-------------------------------------------- ------- -------
8. CALLED UP SHARE CAPITAL
Number of Nominal value
shares
'000 GBP'000
Allotted, called up and fully paid:
At 31(st) December 2010 and 31(st) December
2011 225,415 5,635
--------------------------------------------- --------- -------------
All shares rank pari passu.
9. RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH
GENERATED FROM OPERATING ACTIVITIES BEFORE EXCEPTIONAL
ADMINISTRATIVE EXPENSES
Group
13 Months
Year ended 31(st) ended 31(st)
December December
2011 2010
GBP'000 GBP'000
Profit before taxation from continuing
operations 7,152 7,715
Loss before taxation from discontinued
operations (81) (1,048)
Finance income (219) (260)
Loss on disposal of property, plant
and equipment 71 19
Exceptional administrative expenses 874 550
Depreciation of property, plant and
equipment 242 601
Impairment of property, plant and equipment 442 221
Amortisation of intangible assets 39 80
Impairment of goodwill - 162
Increase in inventories - (1,669)
Increase in receivables (90) (8,309)
Increase/(decrease) in payables (277) 8,773
Decrease in provisions for liabilities (280) (1,040)
--------------------------------------------- ----------------- -------------
Net cash generated from operating activities
before exceptional administrative expenses 7,873 5,795
--------------------------------------------- ----------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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