RNS Number:4766Z
CMG PLC
26 February 2001
26 February 2001
CMG plc: Audited results for the year to 31 December 2000
Summary
2000 2000 1999 Increase
Turnover Euros1,329.0m #810.4m # 608.6m 33% (41%)
Operating profit* Euros205.8m #125.5m # 85.3m 47% (58%)
Profit before tax* Euros191.9m #117.0m # 85.8m 36% (46%)
Profit after tax and
minority interests Euros73.8m # 45.0m # 55.7m -19% (-13%)
Earnings per share* Euros0.238 14.5p 11.8p** 23% (32%)
Full year dividend Euros0.046 2.8p 2.175p** 29%
Final dividend Euros0.030 1.8p 1.45p** 24%
(Payable on 18 May 2001 to all shareholders on
the register on 17 April 2001. Ex-dividend date
is 11 April 2001.)
* before goodwill amortisation of #33.9m (1999: #2.2m)
** 1999 comparatives have been restated to reflect the bonus issue and share
split which took place in May 2000.
( ) constant exchange rates. The effect of exchange rates on CMG's reported
results is shown on page 10.
Highlights of 2000
* 33% growth in Group turnover (41% growth at constant exchange rates)
* Group pre-tax profits* up 36% to #117.0 million (46% growth at constant
exchange rates)
* Operating margin before goodwill amortisation rising to 15.5% (1999:
14.0%)
* Steady improvement in services business accelerated in last quarter
* Geographical and business stream diversification with the Admiral
acquisition and continued excellent growth of the telecom products
business now renamed CMG Wireless Data Solutions
* Successful integration of Admiral plc acquisition: positive impact on
project wins and margins already evident
* Wireless Data Solutions achieved 112% turnover growth (129% at constant
exchange rates), increased market share in SMS and entered market for
Customer Care & Billing systems
* Increasing front and back office integration and e&mCommerce.
Group Results
Turnover for the full year increased by 33% to #810.4 million (41% at constant
exchange rates) and operating profits* rose 47% to #125.5 million (58% at
constant exchange rates). Operating profit margin* improved from 14.0% to
15.5%. Profit before tax* increased by 36% to #117.0 million (46% at constant
exchange rates). Profit for the year (after tax and minority interests) was #
45.0 million, while Earnings Per Share* increased by 23% (32% at constant
exchange rates) to 14.5p. The Board has recommended a final net dividend of
1.8p (1999: 1.45p restated), to be paid to shareholders on the register on 17
April 2001, making a total of 2.8p for the year (1999: 2.175p restated) - a
total increase of almost 30%.
The results include the results from acquisitions (most notably Admiral and
Computer Answers) made during the year, which contributed #125.7 million
turnover and #16.3 million operating profits.*
Operational Summaries
Benelux
Turnover growth increased in the second half leading to reported growth over
the year of 3%, (11% in local currency) while the operating profit margin was
18.7%. Operating profit* was flat (8% growth in local currency). It remains a
soundly-managed business with strong, long-standing customer relationships
which once again took market share through focusing on key vertical sectors.
The acquisition of Tell.IT extended its telecommunications industry
consulting, while a joint venture established with leading consultants TNO is
specifically geared to stimulating the market for e&mCommerce in which CMG is
developing a leadership position.
United Kingdom
The acquisition of Admiral was an important strategic move to gain scale and
greater breadth and depth of resources. The integration process was
accelerated and completed by the year end and the ability to secure new,
larger projects through the combination of skills and experience became
evident during the second half. Including the 7 month contribution from
Admiral, turnover rose 64% from #125.9 million to #206.1 million, while
profits, including acquisitions, increased by 105% to #21.1 million. The
operating margin was over 10%, well on the way to the 2001 target of 12%.
Germany
Turnover declined by 2% (increase of 6% in local currency) while the operating
margin* declined from 6.7% to 3.1%. Slower growth and declining profitability
in 2000 reflected short-term budget reductions by key finance sector customers
involved in M&A discussions and the restructuring of the ERP marketplace.
Significant refocusing of resources was implemented and the company achieved
its first successes in e&mCommerce projects. The pipeline for 2001 is
encouraging.
France:
Strong top line growth of 83% (increase of 98% in local currency), assisted by
the addition of Admiral's French operations, did not feed through to profits
due to the cost impact of domestic employee legislation, although profitable
trading was achieved in the second half. The business climate is favourable
for a steady improvement in profit margins going forward, moving towards 5% in
the medium term.
Rest of World:
The Admiral acquisition brought with it developing businesses in Australia,
South East Asia, Ireland and Denmark. All businesses traded broadly in line
with expectations.
Wireless Data Solutions:
The continued rapid growth in text messaging over mobiles underpinned an
exceptional year for the telecom products business which was renamed CMG
Wireless Data Solutions (WDS) at the beginning of 2001. It now reports
directly to the Group board and reports its figures separately. Growth was in
triple digits at 112% in reported Sterling terms (129% in local currency)
taking turnover to #155.3 million with operating profits* up 265% (295% in
local currency) to #42.3 million, an operating margin* of 27.2%. Investment is
being increased significantly in Research & Development to enhance and extend
the product portfolio and in the global infrastructure of the business to
maintain market leadership in the next technologies. The acquisition of
Computer Answers provided an entry into the Customer Care & Billing market
with its EPPIX product.
*before goodwill amortisation
Outlook for 2001
Commenting on the outlook for the year ahead, CMG Chairman Cor Stutterheim
said:
"External commentators are projecting market growth rates for Information &
Communications Technology (ICT) services in Western Europe during 2001 to be
ahead of 2000 and we are experiencing a growing confidence amongst many
customers. We are therefore confident that we can outperform the market by
leveraging these customer relationships from our key sector focus.
At the same time, we continue to develop our highly profitable global products
business in Wireless Data Solutions which is expected to grow significantly
faster than the traditional services business over the next few years, and
become an increasingly important part of Group revenues and profits. By
developing this business stream, we have been able to deliver a superior
performance to our shareholders together with the prospect of greater value
going forward.
As in previous years, we are experiencing some slowing in the growth of demand
for telecom products in the beginning of the year. We expect this to be a
timing issue only since the GSM Association is predicting SMS volumes will
grow 400% during 2001, necessitating further capacity to be put in place. We
are stepping up our investment in product development, demonstrating
management's belief in long term growth prospects. This will impact our
short-term margin. Continued strong growth will be assisted by further
enhancements to the product portfolio, including unified messaging systems
resulting from the recently announced global alliance with Cisco.
Since I also believe we will continue to see a steady improvement in
performance in the services business through 2001, I look forward once again
to a good set of results for the year."
A copy of the full Chairman's Statement and key financial data is included
below.
- ENDS -
For further information, contact:
Cor Stutterheim, Chairman, CMG plc Tel: +31 (0) 20 67 20 444
David Robbie, Finance Director, CMG plc Tel: +44 (020) 7592 4646
Tony Richards, Group Communications Manager, CMG plc Tel: +44 (020) 7592 4442
Jan Massier, Group Communications (Amsterdam), CMG B.V.Tel: +31 (0) 20 67 20 444
Toby Mountford, Citigate Dewe Rogerson Tel: +44 (020) 7638 9571
Chairman's Statement
Results
I am extremely pleased to be able to report a good set of financial results
for the year 2000 that are both in line with market expectations and
consistent with my remarks at the half year; especially important in a period
when the technology sector has been subject to many reported disappointments.
Turnover for the full year increased by 33% to #810.4 million (41% at constant
exchange rates) and operating profits* rose 47% to #125.5 million (58% at
constant exchange rates). Operating profit margin* improved from 14.0% to
15.5%. Profit before tax* increased by 36% to #117.0 million (46% at constant
exchange rates). Profit for the year (after tax and minority interests) was #
45.0 million, while earnings per share* increased by 23% (32% at constant
exchange rates) to 14.5p. The Board has recommended a final net dividend of
1.8p (1999: 1.45p restated), making a total of 2.8p for the year (1999: 2.175p
restated) - a total increase of almost 30%, to be paid to shareholders on the
register on 17 April 2001.
The results include the results from acquisitions (most notably Admiral and
Computer Answers) made during the year, which contributed #125.7 million
turnover and #16.3 million operating profits*.
* before goodwill amortisation
Post millennium market
Following the successful passing of the millennium event, the software
services industry as a whole had to respond to significant structural changes
in 2000. These generally had little to do with the availability of budgets.
The most significant factor was the time taken by organisations to make
decisions about how best to adopt new e&mCommerce technologies. It is very
encouraging for the long-term prospects of the Information & Communications
Technology (ICT) business that ICT is now seen as a tool for revenue
generation as much as for cost saving and that a wider range of board level
executives are actively involved in key decisions related to it. However this
does mean that the initial stages of project planning have taken longer,
particularly since there has been an industry-wide shortage of high level
consultants with the appropriate skills and experience to assist organisations
in defining appropriate strategies. While CMG experienced a steady improvement
in activity levels from the second quarter of 2000 onwards, it was only later
in the year that these were back to near normal levels as detailed project
specifications and tendering processes came to fruition.
The eCommerce opportunity
As boards have sought to adapt their business models, they have realised that
successful, long term electronic and mobile commerce strategies have to be
linked to an appropriate infrastructure and marketing strategy that embraces
both the front and back office functions of a business and extends out to
other business partners in the supply chain. This is a very significant
integration challenge and one that favours the breadth of skills, resources
and experience that companies such as CMG can offer. Indeed, the majority of
major organisations are already turning to well-established systems
integrators for this work, rather than newer so-called Internet integrators.
Whenever we experienced a short-term decline in utilisation rates during 2000,
we took the opportunity to accelerate the development of the appropriate
technical skills of our people in preparation for this growing demand. We have
also been steadily building our sales pipeline in the e&mCommerce area and
expect to see a material benefit to our revenues in 2001.
ERP market restructuring
Sales of new Enterprise Resource Planning (ERP) systems remained slow during
the first half of the year, especially in the industrial sector. The business
that CMG typically secures some 6 months to a year downstream to optimise and
integrate those systems was affected accordingly. The impact for CMG was most
marked in Germany and to a lesser extent in the Benelux. The French market is
earlier in the implementation cycle and remained relatively buoyant, while in
the UK we took a decision some time ago to minimise our exposure to this
market sector. Again, we have used the availability of suitable employees in
this area to accelerate the development of our knowledge and build a customer
base in associated applications, notably Customer Relationship Management
(CRM), Supply Chain Management (SCM) and eProcurement and logistics.
There has been better news recently from key ERP vendors such as SAP and
Oracle and certainly we are seeing a strong pick up in SAP-related business in
our Dutch, German and French operations. ERP will remain an important
strategic area of IT investment for major organisations as it underpins the
new applications they are seeking to implement.
CMG engaged in two major organisational changes of its own during the year:
the acquisition of Admiral plc and the establishment of our international
Telecom Products operation (now renamed CMG Wireless Data Solutions) as a
separate business line.
Admiral acquisition
We took control of Admiral plc at the beginning of June and embarked on an
integration process with the objective of completing the task ready for the
start of 2001. This was achieved and the joint teams and combined management
are now delivering on the cross-selling synergies envisaged at the time of the
offer. In the key UK market, and in France and Belgium, we are now able to bid
for and secure larger contracts both with existing and new customers,
leveraging our greater breadth and depth of skills and resources. We did
experience an increase in staff attrition levels in the UK and France both at
the time of the acquisition and again when we announced internally the fully
detailed integrated structures. This was disappointing but not unexpected, and
we have now seen an improvement in the monthly staff turnover levels since
September.
Wireless Data Solutions
The rapid growth seen by our Telecom Products business, particularly in the
second half of 1999, continued through 2000. Triple digit growth in revenues
was posted for both periods in constant currency terms together with excellent
profitability. The primary engine for this growth has been the demand for SMS
text messaging over mobile networks and we believe this will continue
strongly. We are also investing heavily in research & development to secure
future revenue streams and strengthen our product portfolio, including the
EPPIX customer care and billing product acquired with Computer Answers in
July. This investment, together with increased infrastructure and marketing
costs, will take our 2001 margin back to around 20%.
We now have leading positions in SMS messaging, cell broadcast systems, WAP
systems for the mobile Internet and mobile eMail. In February 2001, we
announced a clear strategy for entering the unified messaging market in 2001
and the multimedia messaging market as 2.5 and 3rd generation mobile networks
come on stream. This strategy includes a global alliance with the
world-leading Internet communications supplier, Cisco. We are shifting our
emphasis to being a marketing-driven organisation focused on solutions that
now extend beyond our traditional customer base of the mobile operators to
other commercial enterprises seeking to exploit the benefits of wireless data.
We also made excellent progress in expanding our business outside Europe,
notably in Latin America, Africa and the Asia Pacific region, and established
a new software development facility in the Czech Republic to supplement those
in The Netherlands, UK and Ireland.
Because it is headquartered in Nieuwegein (near Utrecht), The Netherlands, the
business previously reported its performance as part of the Benelux ICT
services operation. From April 2000 it has reported directly to the Group
board under its own management team, represented on the Group Executive
Committee by Wim Rimmelzwaan. At the same time, we began to report its
financial performance independently so that greater transparency could be
afforded to the investment community. In January 2001 the business began
trading under the name CMG Wireless Data Solutions. With the same highly
committed management team and workforce and a clear strategic vision, it has
excellent prospects for the future.
People and recruitment
The recruitment market has remained very challenging in all our territories,
as greater job mobility returned after the millennium but shortages of people
with the latest skills intensified. Most companies in our sector experienced
an increase in staff turnover, as did CMG even after discounting the specific
impact of the Admiral acquisition. We redoubled our recruitment activities on
all fronts and succeeded in achieving a net increase of 4,414 people over the
year -of which 1,401 was organic - taking our numbers to 13,070 at the
beginning of 2001. We have reviewed and updated our terms of employment to
reflect local market conditions and are investing strongly in management
development to support our future growth. Historically, we have a good track
record of growing our own management, and now must ensure that we accelerate
managers with high potential through our organisation to sustain our
profitable growth.
The Board
In June, Chris Banks became a non-executive director as announced in last
year's report. He was replaced as Finance Director by David Robbie who joined
from Invensys plc. Also in June, Barbara Ward retired from the Board after 36
years of outstanding contribution to the Group. Barbara was CMG's fifth
employee and throughout her career provided inspiration across our developing
business by always embodying the values that are at the heart of CMG's
distinctive culture.
In January 2001 we announced the proposed appointment to the Board of
Professor Wim Dik as a non-executive director. Wim Dik's extensive experience
as a past Chairman of KPN, the Dutch telecoms operator, will be of
considerable benefit to the Board in the next phase of the Group's
development, particularly in relation to the continued growth of CMG Wireless
Data Solutions.
Clay Brendish, our Deputy Executive Chairman and previously Chairman and
co-founder of Admiral, will leave CMG at the time of our Annual General
Meeting in May. The vital role he performed in the integration process is now
drawing to a close and the Board thanks him wholeheartedly for easing the path
of the merger and for his wise counsel during the last year. Also at the AGM,
Wilko Borner will not seek re-election to his position as a non-executive
director; we thank him for his contribution over the last three years.
Outlook
We have much to do in the short term to ensure that our less mature businesses
and the newly combined CMG and Admiral operations deliver improved margins.
However, we have been encouraged by the ability of our people to manage their
way through a period of rapid and extensive change and position CMG strongly
for the years ahead. I thank them wholeheartedly for this. Our closely managed
business model, with its high degree of devolved responsibility, has again
proved its worth by being very responsive to customer needs and quick to adapt
to new circumstances. We are trusted by our customers to deliver effective ICT
solutions when it matters most and we are increasingly chosen to deliver the
secure platforms and applications on which their e & mCommerce strategies are
built. We will globalise progressively in line with their needs and be the
company of first choice, both for our customers and our people.
External commentators are projecting market growth rates for ICT services in
Western Europe during 2001 to be ahead of 2000 and we are experiencing a
growing confidence amongst many customers. We are therefore confident that we
can outperform the market by leveraging these customer relationships from our
key sector focus.
At the same time, we continue to develop our high growth global products
business in Wireless Data Solutions which is expected to grow significantly
faster than the traditional services business over the next few years, and
become an increasingly important part of Group revenues and profits. By
developing this business stream, we have been able to deliver a superior
performance to our shareholders together with the prospect of greater value
going forward.
As in previous years, we are experiencing some slowing in the growth of demand
for telecom products in the beginning of the year. We expect this to be a
timing issue only since the GSM Association is predicting SMS volumes will
grow 400% during 2001, necessitating further capacity to be put in place. We
are stepping up our investment in product development, demonstrating
management's belief in long term growth projects. This will impact our
short-term margin. Continued strong growth will be assisted by further
enhancements to the product portfolio, including unified messaging systems
resulting from the recently announced global alliance with Cisco.
Since I also believe we will continue to see a steady improvement in
performance in the services business through 2001, I look forward once again
to a good set of results for the year.
Cor Stutterheim
Chairman
Summary financial information is set out below:
Consolidated Profit and Loss Account
for the year ended 31 December 2000
Acquisitions Continuing 2000 1999
Operations
Total Total
Notes #'m #'m #'m #'m
Turnover 3 125.7 684.7 810.4 608.6
Net operating costs (140.8) (578.0) (718.8)
(525.5)
Operating Profit
Before goodwill amortisation 16.3 109.2 125.5 85.3
Goodwill amortisation (31.4) (2.5) (33.9) (2.2)
(15.1) 106.7 91.6 83.1
Net interest (payable)/ (8.5) 0.5
receivable
Profit on ordinary 3 83.1 83.6
activities before tax
Tax on profit on ordinary (37.9) (27.6)
activities
Profit on ordinary activities after 45.2 56.0
tax
Minority interests (0.2) (0.3)
Profit for the year 45.0 55.7
Dividends - ordinary shares 5 (16.5) (10.7)
Retained profit for the year 28.5 45.0
2000 1999
Earnings per share 6
- headline and basic
- before goodwill 14.5p 11.8p
amortisation
- after goodwill amortisation 8.3p 11.4p
- diluted
- before goodwill 13.7p 11.1p
amortisation
- after goodwill amortisation 7.8p 10.7p
The 1999 earnings per share comparatives have been restated to reflect the
bonus issue and share split which took place in May 2000.
Consolidated Balance Sheet
31 December 2000
Notes 2000 2000 1999 1999
#'m #'m #'m #'m
Fixed assets
Goodwill 1,086.9 45.6
Tangible assets 28.9 16.9
Investments - own shares 2.8 2.8
1,118.6 65.3
Current assets
Stock 3.9 1.4
Debtors 236.2 144.7
Cash at bank and in hand 52.2 31.2
292.3 177.3
Creditors - Amounts falling due within
one year
Borrowings (9.6) -
Other creditors (170.5) (116.3)
(180.1) (116.3)
Net current assets 112.2 61.0
Total assets less current 1,230.8 126.3
liabilities
Creditors - Amounts falling due after
more than one year
Borrowings (230.9) -
Provisions for liabilities and (4.3) (4.7)
charges
(235.2) (4.7)
995.6 121.6
Net assets
Capital and reserves
Called up equity share capital 15.3 6.4
Share premium account 7.2 10.5
Reserves of Employee Trust 3.1 2.6
Profit and loss account 133.7 102.1
Merger reserve 836.3 -
Equity shareholders' funds 9 995.6 121.6
Consolidated Cash Flow Statement
for the year ended 31 December 2000
Notes 2000 2000 1999 1999
#'m #'m #'m #'m
Net cash inflow from operating activities 7 95.9 70.9
Returns on investments and servicing of
finance
Interest received 1.7 1.9
Interest paid (9.4) (1.3)
Interest paid on finance leases (0.3) -
Net cash (outflow)/inflow from returns on (8.0) 0.6
investments and servicing of finance
Taxation (42.4) (35.7)
Capital expenditure (11.2) (6.5)
Acquisitions (239.7) (27.5)
Equity dividends paid (13.1) (8.5)
Net cash outflow before use of liquid 8 (218.5) (6.7)
resources and financing
Management of liquid resources 5.0 (0.2)
Financing activities
Proceeds from exercise of share options 3.7 0.1
New loans 228.4 -
Capital elements of finance lease rental (0.6) -
Cost of bonus issue and share split (0.4) -
231.1 0.1
Increase/(Decrease) in cash 17.6 (6.8)
Notes
1. Source of financial information
The financial information above does not comprise statutory accounts. Financial
statements for the year ended 31 December 1999, which include an unqualified
audit report, have been delivered to the Registrar of Companies. The 2000
financial statements, including an unqualified audit report, will be posted to
shareholders and will be filed with the Registrar of Companies.
2. Exchange rates
The most important exchange rates used in preparing the financial information
were:
2000 2000 1999 1999
Year end Average Year end Average
Netherlands Guilder 3.51 3.62 3.54 3.35
Deutsche Mark 3.11 3.21 3.14 2.97
French Franc 10.44 10.77 10.55 9.97
Euro 1.59 1.64 1.61 1.52
Exchange rate impact table
2000 1999 1999 % Growth %Growth
at constant at actual at constant at actual
exchange exchange exchange exchange
#m rates rates rates rates
#m #m
Turnover 810.4 572.9 608.6 41% 33%
Operating Profit* 125.5 79.5 85.3 58% 47%
Profit before tax* 117.0 80.0 85.8 46% 36%
Profit after tax 45.0 52.0 55.7 (13%) (19%)
and minority
interests
Earnings per share* 14.5p 11.0p 11.8p 32% 23%
Key exchange rates
used above: #1 =
Netherlands Guilder 3.62 3.62 3.35
Deutsche Mark 3.21 3.21 2.97
French Franc 10.77 10.77 9.97
Euro 1.64 1.64 1.52
* before goodwill amortisation
3. Segmental information
Analyses of turnover and profit before tax by country of origin and
geographic area are given below :
Turnover Profit before tax
2000 1999 2000 1999
#'m #'m #'m #'m
Benelux 335.6 325.4 62.9 63.0
Wireless Data Solutions 155.3 73.2 42.3 11.6
United Kingdom 206.1 125.9 21.1 10.3
Germany 58.8 59.8 1.8 4.0
France 44.5 24.3 (0.2) (0.1)
Rest of World 10.1 - 0.9 -
810.4 608.6 128.8 88.8
Common costs - - (3.3) (3.5)
Goodwill amortisation - - (33.9) (2.2)
810.4 608.6 91.6 83.1
Net interest (payable)/receivable - - (8.5) 0.5
810.4 608.6 83.1 83.6
#0.9 million of the goodwill amortisation is attributable to the Benelux (1999:
#0.5 million); #1.5 million to Wireless Data Solutions (1999: nil) #29.7
million to the UK which includes all goodwill amortisation relating to Admiral
(1999: #0.9m), #0.7 million to France (1999: #0.4m), and the remaining #1.1
million to Germany (1999: #0.4m).
An analysis of turnover by country of destination is given below:
Turnover
2000 1999
#'m #'m
Benelux 348.3 330.8
United Kingdom 215.3 118.0
Germany 77.8 82.1
France 53.0 28.4
Rest of World 116.0 49.3
810.4 608.6
4. Employees
2000 1999 2000 1999
Year end Year end Average Average
The number of employees was:
Benelux 6,796 5,607 6,233 5,237
United Kingdom 3,608 1,713 2,752 1,645
Germany 899 776 853 705
France 1,095 501 844 436
Rest of World 672 59 377 40
13,070 8,656 11,059 8,063
5. Ordinary dividends paid and proposed
2000 2000 1999 1999
#'m #'m #'m #'m
Interim dividend of 1.0 pence on
602,629,500 ordinary 6.0 3.7
shares (1999: 0.725 pence on
512,850,632 ordinary shares) (0.2) (0.1)
Less dividends payable to the
Employee Trust 5.8 3.6
Proposed final dividend of 1.8
pence on 613,255,963 11.1 7.4
ordinary shares (1999: 1.45 pence
on 512,850,632 ordinary shares)
Less dividends payable to
the Employee Trust (0.4) (0.3)
10.7 7.1
16.5 10.7
The comparatives have been restated to reflect the bonus issue and share split
which took place in May 2000.
6. Earnings per share
2000 1999
Earnings - standard basis (#'m) 45.0 55.7
- add back goodwill amortisation (#'m) 33.9 2.2
- before goodwill amortisation (#'m) 78.9 57.9
Number of shares (millions)
Weighted average number of shares in issue 566.6 512.8
Shares held by the Employee Trust (22.3) (22.4)
Shares used to calculate earnings per share 544.3 490.4
Effect of dilutive potential ordinary shares
- share options 29.9 29.6
Shares used to calculate diluted earnings per share 574.2 520.0
The comparatives have been restated to reflect the bonus issue and share split
which took place in May 2000.
7. Reconciliation of operating profit to net cash inflow from operating
activities
2000 1999
#'m #'m
Operating profit 91.6 83.1
Goodwill amortisation 33.9 2.2
Depreciation of tangible fixed assets 8.9 6.5
Increase in debtors (37.0) (32.5)
(Decrease)/increase in creditors and provisions (1.5) 11.6
Net cash inflow from operating activities 95.9 70.9
Reconciliation of cash flow to change in net (debt)/ funds
8.
2000 2000 1999 1999
#'m #'m #'m #'m
Net funds as at 1 January
Cash 26.2 34.7
Liquid resources 5.0 4.8
31.2 39.5
Net cash inflow before use of liquid resources (218.5) (6.7)
and financing
Other movements 2.0 0.1
Debt and financing acquired with subsidiary (3.8) -
Exchange differences 0.8 (1.7)
(219.5) (8.3)
Net (debt) / funds as at 31 December 2000
Cash 52.2 26.2
Liquid resources - 5.0
Overdrafts (7.5) -
Finance lease obligations (3.7) -
Loans and borrowings due after more than one year (229.3) -
(188.3) 31.2
9. Reconciliation of group reserves
Share Share Reserves of Profit Merger Total
capital premium Employee and
account Trust Reserve
loss
account
#'m #'m #'m #'m #'m #'m
Balance at 1 January 6.4 10.5 2.6 102.1 - 121.6
2000
Change in value due - - - 3.6 - 3.6
to currency
fluctuations
Bonus issue 6.4 (6.4) - - - -
Retained profit for - - - 28.5 - 28.5
the year
Shares issued during 2.5 3.5 - - 836.3 842.3
the year
Transfer in respect - - 0.5 (0.5) - -
of Employee Trust
Share issue expenses - (0.4) - - - (0.4)
Balance at 31 15.3 7.2 3.1 133.7 836.3 995.6
December 2000
10. Acquisitions
During 2000, the Group made the following acquisitions:
Admiral plc, a UK listed company, was acquired on 31 May 2000 for
consideration comprising the issue of 89,872,928 ordinary shares of 2.5p
each; #165.6 million cash and #0.8 million loan notes. The fair value of
the total consideration was #1,021.3 million.
Subsequently Admiral plc changed its name to Admiral Limited.
Software Development & Consulting GmbH, a company incorporated in Germany,
was acquired on 24 May 2000 for a cash consideration of DM 30.3 million (#
9.5 million). DM 30.2 million of this is deferred until February 2002.
adit GmbH, banksys Software GmbH, two companies incorporated in Germany,
were acquired on 1 January 2000 for a cash consideration of DM 13.0 million
(#4.3 million) and DM 5.5 million (#1.8 million) respectively.
Tell.IT International BV, a company incorporated in the Netherlands was
acquired on 8 February 2000 for cash consideration of NLG 25.2 million (#
7.0 million).
EPL Group, a company incorporated in France, was acquired on 1 March 2000
for a cash consideration of FFr 53.0 million (#4.9 million).
Software Resource Ltd, a company incorporated in the UK, was acquired on 21
March 2000 for a cash consideration of #6.9 million.
On 20 July 2000, Computer Answers Group Limited, a UK company, was acquired
for a cash consideration of #60.0 million.
The amounts for consideration shown above exclude any acquisition costs
such as stamp duty and due diligence fees.
In some of the acquisitions, a part of the purchase consideration was
withheld to cover potential liabilities.
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