TIDMKBC
RNS Number : 8345A
KBC Advanced Technologies plc
26 March 2013
Embargoed until 0700 hrs 26 March 2013
KBC Advanced Technologies plc ("KBC", "the Company" or "the
Group")
Preliminary results for the year ended 31 December 2012
KBC Advanced Technologies plc, a leading consultancy and
software provider to the global hydrocarbon sector, today announces
its preliminary results for the year to 31 December 2012.
Highlights
-- Year of significant change - new leadership and restructured organisation
-- Acquisition and integration of Infochem, a leading software
and services provider to the upstream sector
-- Underlying profit before tax of GBP5.5m, ahead of expectations (2011: GBP5.9m)
-- Profit before tax of GBP3.7m (2011: GBP4.9m)
-- Software revenue up by 45% to GBP18.8m (2011: GBP13.0m)
-- Strong balance sheet with material net cash at year end
-- Record level of contract awards with backlog of GBP82.9m at year end (2011: GBP48.7m)
Ian Godden, Chairman of KBC, commented:
"2012 was a year of significant change for KBC. After a slow
start in the first half, the Group responded decisively and, under
the new leadership team, ended the year with a very strong final
quarter, culminating in the award of a major multi-year consulting
and software contract. This helped us generate an underlying profit
before tax slightly ahead of revised expectations.
In June we completed the acquisition of Infochem, which has been
integrated with our existing software business. This represents the
successful first step in our growth strategy to increase the
proportion of Group revenue from software and to expand into the
upstream oil and gas sector.
2013 has started well and, together with the benefits of the
reorganisation and restructuring, we are confident that the Group
is well placed to deliver on its plans to grow the business
profitably."
-Ends-
KBC Advanced Technologies plc +44 (0)1932 242424
Ian Godden, Chairman
Caroline Brown, Chief Financial Officer
Cenkos Securities plc
Bobbie Hilliam/Max Hartley/Callum Davidson +44 (0)20 7397 8900
Weber Shandwick Financial
Nick Oborne/Stephanie Badjonat/Robert Cook +44 (0)20 7067 0700
Notes to Editors:
KBC is a leading consultancy and software provider to the global
hydrocarbon processing industry. With over 30 years of experience,
KBC combines industry leading technology with experienced engineers
and operations personnel using robust methodologies to create
personalised, sustainable solutions for its clients. For more
information, visit www.kbcat.com.
CHAIRMAN'S STATEMENT
Summary
2012 was a year of significant change for KBC. After a slow
start in the first half, the Group responded decisively and, under
the new leadership team, ended the year with a very strong final
quarter, culminating in the award of a major multi-year consulting
and software contract. This helped us generate an underlying profit
before tax slightly ahead of revised expectations.
In June we completed the GBP9.5m acquisition of Infochem
Computer Services Ltd ("Infochem"), which has been integrated with
our existing software business. This represents the successful
first step in our growth strategy to increase the proportion of
Group revenue from software and to expand into the upstream oil and
gas sector.
In the third quarter we welcomed our new Chief Financial
Officer, Caroline Brown, and strengthened our balance sheet with a
small placing of new shares to raise GBP1.2m. The new leadership
team has focused on a fundamental review of our cost base and a
restructuring of our consulting operations, both of which are well
underway.
2013 has started well and, together with the benefits of the
reorganisation and restructuring, we are confident that the Group
is well placed to deliver on its plans to grow the business
profitably.
Results
Group revenue for the year increased by 13% to GBP63.1m (2011:
GBP55.7m). However, due to higher costs and provisions, operating
profit calculated on an underlying basis in 2012 was 5% lower than
the previous year at GBP5.7m (2011: GBP6.0m) and underlying profit
before tax was down 7% to GBP5.5m (2011: GBP5.9m). The earnings
figures for the year are adversely impacted by the decision to
de-recognise a deferred tax asset in the UK subsidiary, together
with the increase in earnings in higher-tax jurisdictions. The loss
after tax for 2012 of GBP1.6m (2011: GBP3.3m profit) equates to a
basic loss per share of 2.9p (2011: earnings per share of 5.9p).
Earnings per share calculated on the underlying profit measure
declined from 7.1p in 2011 to a loss per share of 2.1p. Diluted
loss per share was 2.9p in 2012, compared to diluted earnings per
share of 5.9p in 2011. The Group is continuing to review the
location of its assets and resources globally to minimise its
effective tax rate.
Dividend
In September 2012, after a slow first half, the Board took the
decision not to pay a dividend for the 2012 financial year. The
Board will review the position during 2013 with the intention of
returning to a progressive dividend policy in respect of the
current financial year.
Board and management changes
During the year George Bright and Nicholas Stone left the Group
and the Board welcomed Caroline Brown as its new Chief Financial
Officer. In addition to my role as Chairman, I took on additional
responsibilities, on an interim basis, to lead a reorganisation of
KBC's businesses and accelerate implementation of the consulting
restructuring.
A new management and operating structure has been introduced to
improve efficiency, assist in exploiting the full range of KBC's
technology and to place greater emphasis on business development
within the consulting group. The business is led by a new Operating
Board comprising myself, Caroline Brown and three members of our
senior management team: Kevin Smith, Managing Partner of
Consulting, Andy Howell, Managing Director of Technology, and Ramon
Loureiro, Senior Partner of Consulting.
Current trading and outlook
In 2012, contract awards were GBP95.4m (2011: GBP44.9m), a
record for KBC, resulting in an order book at the year end of
GBP82.9m (2011: GBP48.7m) which, together with a large new software
contract award in Japan, has contributed to a strong start to the
year.
The exact timing of contract awards, particularly for software
licences, will continue to affect results within any year. However,
given the strength of the order book, the enhanced range of
products and services and a restructured business that is better
able to deliver profitable growth, the Board looks to the future
with confidence.
Ian Godden
Chairman
BUSINESS REVIEW
KBC's market
The worldwide hydrocarbon sector continues to grow, despite the
state of the world economy, and therefore remains an important
marketplace for KBC to serve. In 2012 the downstream hydrocarbons
segment remained our primary market and continued to provide
attractive opportunities for KBC. During the year we also expanded
into the upstream production segment of the market.
The rising level of US domestic crude oil and gas production
from shale and tight oil is arguably the single most important new
development influencing the outlook for hydrocarbon markets in the
medium term. Cheap feedstock from US shale gas developments is
causing a revitalisation of the petrochemicals sector in the US and
is challenging petrochemical businesses in other parts of the
world. In addition, large offshore gas discoveries are generating
significant LNG investment opportunities in East Africa and
Australia. In upstream oil, investment continued apace providing
double digit growth in certain parts of the world for services and
new technologies. Finally, although 2012 was marked by volatility
for the global refining industry, with significant swings in
refining margins, by the end of the year refining margins were much
stronger than originally forecast and many underperforming assets
were in need of major profit improvement initiatives.
These fluctuating market conditions and major investments in new
plants in certain parts of the world continue to suit KBC's
developing range of consulting and software products and services.
In the emerging markets the demand continued not only for our
profit improvement support through technological excellence and
organisational services but also for our strategy, feasibility and
capital project services. Even in the more mature markets of North
America and Europe, where economic growth in downstream is
relatively flat, there has been increasing demand for our more
traditional cost reduction and process optimisation offerings. In
addition, the shale revolution is generating many new opportunities
for KBC, not only in the Americas, but also around the world.
With our expansion into the upstream market, activity in the
upstream production sector is increasingly important to KBC as
capital expenditure grows to develop challenging new discoveries
and enhance existing production from mature regions. With oil
prices remaining at current levels, activity in this area is set to
increase across all producing regions both onshore and offshore.
This provides KBC with new market opportunities as the oil and gas
companies and the oilfield service companies are increasingly
looking to utilise sophisticated software to manage growing
upstream expenditure and apply profit improvement techniques more
typical for downstream assets.
KBC's strategy
KBC has refined its strategy over the last six months and
adjusted its core strategic direction to serve better the future
needs of our customers. We shall:
-- Continue our focus on consulting and technology for the
design, operation and management of hydrocarbon processing
facilities worldwide
-- Maintain our emphasis on services that add significant profit
improvement for our clients from their core hydrocarbon assets
-- Increase KBC's presence in the midstream and upstream
hydrocarbon industry, both organically and through acquisition
-- Widen and grow KBC's Technology business, through further
exploiting intellectual property within KBC and continued
acquisition of niche technologies along the oil and gas value
chain
-- Invest in growing markets including Central and South
America, the Middle East, FSU and Asia
Restructuring
In response to the slow first half we carried out a review of
the business overall and of the consulting organisation in
particular, in order to achieve higher utilisation and to realise
efficiency gains.
All of the consulting operations including technical,
organisational and skills-building are now managed as a single
resource under the direction of the Managing Partner of Consulting.
To capture what we believe to be the enhanced potential to expand
our activities into other areas of intellectual property
exploitation, we have renamed the former software business as
Technology. The realignment of the Technology business, that was
already underway under the direction of the Managing Director for
Technology, has been accelerated. The new Operating Board is
designed to ensure that the Consulting and Technology businesses
are effectively co-ordinated to maximise client engagement.
In addition, significant work has been undertaken to ensure that
KBC's cost structure is appropriate and that it is able to optimise
its business processes to further improve efficiency and
effectiveness. This will deliver further improvements in 2013 and
beyond.
Operations - Consulting
Consulting revenue in 2012 increased by 4% to GBP44.3m (2011:
GBP42.7m).
KBC has implemented a restructuring of its consulting business
in order to offer a unique combination of technology-based
consulting, together with organisational and skills-building
consulting. We are finding that clients are increasingly seeking
this integrated offering. A new worldwide "partnership" structure
within the Consulting group is designed to drive and incentivise
this integration and we are investing in the training and
development of leaders to match the future requirements of this new
structure.
Our ability to offer a truly integrated offering was the key
differentiator that led to KBC being awarded the major multi-year
consulting and technology transfer contract in South America in
December 2012. It also led to the extension of an existing
long-term relationship with a Canadian oil company to deliver a
multimillion dollar organisational development programme during
2012, and for the work we carried out for an Australian exploration
and production company developing a large coal seam gas to LNG
project in Queensland.
In 2012 we continued to implement the large multi-site Profit
Improvement Program in Mexico, with a full-time presence at six
refineries.
KBC's relationship with the Malaysian state oil company
continues to grow through the provision of both our simulation
software and consulting services. In addition, we have continued to
provide project feasibility and techno-economic advisory support
for an integrated refinery and petrochemical development in
Malaysia.
During the year we also commenced a contract for a refining and
petrochemical complex joint venture in China which will provide
best practice technology, including KBC software. We also started
work on a Profit Improvement Program for a major Indian refining
organisation in 2012.
Operations - Technology
The year to December 2012 saw a strong performance from KBC's
Technology business. Revenues for the year were up by 45% at
GBP18.8m (2011: GBP13.0m). Approximately GBP6.4m (2011: GBP6.7m) of
this total was from maintenance, upgrade and service revenue.
The acquisition of London-based Infochem Computer Services
Limited in June 2012 was an important first step in our strategy to
expand KBC's portfolio of software and services into the upstream
oil and gas market sector and increase the relative proportion of
software in our total revenue mix.
As part of the reorganisation, KBC has strengthened the
Technology management team and further improved the direct sales
channel. We have also made good progress in developing an enhanced
range of products for the downstream, upstream and gas production
markets. Petro-SIM Production(TM) has been launched, incorporating
Infochem's intellectual property into the Petro-SIM(TM) platform,
and a number of trials are currently in progress.
In December 2012 a large technology transfer package comprising
software applications and training materials was delivered to the
integrated national oil company of Ecuador as part of a consulting
and software contract. This includes a five year licence for KBC's
process and energy modelling software tools, including the full
Petro-SIM suite.
In early 2013 KBC announced a new contract with a Japanese
refiner to provide a five-year licence for Petro-SIM, selected SIM
models and software services.
Results
Group revenue increased by 13% in 2012 to GBP63.1m (2011:
GBP55.7m). Technology revenue, from software licences and related
services, was up by 45% to GBP18.8m (2011: GBP13.0m), including
GBP6.4m of maintenance, support and upgrade revenue (2011:
GBP6.7m). Consulting revenue was up by 4% to GBP44.3m (2011:
GBP42.7m).
Direct costs increased by 18% to GBP8.7m in 2012 (2011:
GBP7.4m). Staff and associate costs increased by 11% to GBP34.3m
(2011: GBP30.8m) and other indirect operating costs increased by
20% to GBP13.6m (2011: GBP11.3m).
Operating profit calculated on an underlying basis fell by 5% to
GBP5.7m in 2012 (2011: GBP6.0m) and underlying profit before tax
fell by 7% to GBP5.5m (2011: GBP5.9m). This measure adjusts for
reorganisation costs of GBP1.7m, development costs carried forward
of GBP2.1m, amortisation of development costs carried forward of
GBP0.8m, amortisation of acquisition intangibles of GBP0.9m and
other items which do not reflect underlying operations.
Profit before tax was GBP3.7m (2011: GBP4.9m) down 24% in
2012.
Tax
The tax charge of GBP5.3m (2011: GBP1.7m) for the year is made
up of current tax expense of GBP4.0m and a deferred tax charge of
GBP1.3m. See Note 4 below.
The current tax expense includes GBP4.4m (2011: GBP0.8m) of tax
payable on overseas operations in respect of the year and GBP0.7m
(2011: GBP0.7m) of withholding tax. Of this amount GBP0.4m is
expected to be recovered against overseas tax payable by way of
double tax relief. The balance of GBP0.3m is not expected to be
recoverable as a result of tax losses in the UK and limited
eligible income against which relief can be taken in Singapore.
There is a GBP0.7m prior year credit reflecting claims made for
research and development and adjustments made on filing
returns.
The deferred tax charge includes a one-off tax charge of GBP1.4m
(2011: nil) which is the release of the opening deferred tax asset
in respect of trading losses in the UK. The decision to release
this opening asset was taken in the first half year due to
uncertainty over the timing of recoverability of the losses.
Notwithstanding the derecognition of the deferred tax asset in
2012, the Group's tax charge in subsequent periods will benefit
from these losses and further UK trading losses for the year as UK
profits become available. The balance of the deferred tax charge
principally relates to short term timing differences expected to
reverse in future years.
The 2012 effective tax rate was significantly higher than in
previous years. The main reasons for this are continuing trading
losses in the UK, increasing profitability of operations in the US
and the Far East, and the release of the opening deferred tax asset
in respect of UK trading losses. The Group is continuing to review
the location of its assets and resources globally to minimise its
effective tax rate.
Earnings and dividends
The loss after tax for 2012 of GBP1.6m (2011: GBP3.3m profit)
equates to a basic loss per share of 2.9p (2011: earnings per share
of 5.9p). The diluted loss per share was 2.9p in 2012, compared to
earnings per share of 5.9p in 2011. The loss per share calculated
on the underlying measure was 2.1p (2011: earnings per share of
7.1p).
The Board has decided not to pay a dividend for the 2012
financial year. The Board will review the position during 2013,
with the intention of returning to a progressive dividend policy in
respect of the current financial year.
Carry forward of software development costs
During 2012 the Group incurred research and development costs of
GBP2.4m (2011: GBP2.0m). Of this amount GBP2.1m (2011: GBP0.6m)
related to development expenditure for Petro--SIM and has been
carried forward as an intangible asset to be amortised against
expected future sales. The balance was charged directly to staff
and associate costs and direct costs in the income statement. The
amortisation of previously capitalised software development costs
in 2012 amounted to GBP0.8m (2011: GBP0.6m).
Working capital and net cash
Trade and other receivables reduced during the year from
GBP22.9m to GBP18.9m. Trade and other payables increased from
GBP7.9m to GBP22.1m due largely to a large multi-year contract
signed at the end of the year.
Cash and cash equivalents at the year end were GBP21.1m (2011:
GBP5.8m), showing a strong recovery during the final quarter. Cash
and cash equivalents per cash flow were GBP6.4m (2011: GBP5.8m).
The difference is largely due to an advance payment received at the
year end in connection with a new contract. As at the year end the
Group had outstanding bank loans totalling GBP5.4m (2011: nil).
Going concern
The Group's financial statements are prepared on a going concern
basis. The Directors are satisfied that the Group has sufficient
resources and borrowing facilities to meet its requirements for a
period of at least 12 months from the date of this statement.
Ian Godden Caroline Brown
Chairman Chief Financial Officer
Group Income Statement
For the year ended 31 December 2012
2012 2011
Note GBP000 GBP000
---------------------------------------- ----- --------- ---------
Revenue 63,140 55,725
Direct costs (8,741) (7,412)
Staff and associate costs (34,266) (30,822)
Depreciation and amortisation (2,686) (1,169)
Other operating charges (13,587) (11,311)
---------------------------------------- ----- --------- ---------
Operating profit 3,860 5,011
Finance revenue 1 20
Finance cost (198) (101)
---------------------------------------- ----- --------- ---------
Profit before tax 3,663 4,930
Tax expense 4 (5,309) (1,673)
---------------------------------------- ----- --------- ---------
(Loss)/Profit for the year (1,646) 3,257
---------------------------------------- ----- --------- ---------
(Loss)/Earnings per share attributable
to the ordinary equity shareholders
of the parent company
Basic 5 (2.9)p 5.9p
Diluted 5 (2.9)p 5.9p
---------------------------------------- ----- --------- ---------
Group Statement of Comprehensive Income
For the year ended 31 December 2012
2012 2011
GBP000 GBP000
------------------------------------------------------- -------- -------
(Loss)/Profit for the year (1,646) 3,257
Other comprehensive (loss)/income:
* exchange differences on translation of foreign
operations recognised directly in equity (247) 58
------------------------------------------------------- -------- -------
Total comprehensive (loss)/income recognised
in the year (1,893) 3,315
------------------------------------------------------- -------- -------
Group Statement of Changes in Equity
For the year ended 31 December 2012
Capital Share- Foreign
Issued Share redemption Merger Own based exchange Retained
capital premium reserve reserve shares payments reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
At 1 January
2011 1,386 8,072 113 929 (245) 1,580 2,389 15,905 30,129
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Profit for the
year - - - - - - - 3,257 3,257
Other comprehensive
income - - - - - - 58 - 58
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Total comprehensive
income - - - - - - 58 3,257 3,315
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Share-based
payments - - - - - 300 - - 300
Exchange translation
adjustment - - - - - - 5 - 5
Shares issued 14 9 - - (13) - - - 10
Shares purchased - - - - (162) - - - (162)
Utilisation
of own shares - - - - 245 - - (245) -
Dividends - - - - - - - (1,100) (1,100)
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
At 1 January
2012 1,400 8,081 113 929 (175) 1,880 2,452 17,817 32,497
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Loss for the
year - - - - - - - (1,646) (1,646)
Other comprehensive
(loss)/income - - - - - - (247) - (247)
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Total comprehensive
(loss)/income - - - - - - (247) (1,646) (1,893)
Share-based
payments - - - - - 300 - - 300
Exchange translation
adjustment - - - - - - (39) - (39)
Shares issued 70 1,289 - - - - - - 1,359
Utilisation
of own shares - - - - 3 - - (3) -
Dividends - - - - - - - (857) (857)
At 31 December
2012 1,470 9,370 113 929 (172) 2,180 2,166 15,311 31,367
---------------------- -------- -------- ----------- -------- ------- --------- --------- --------- --------
Group Balance Sheet
As at 31 December 2012
2012 2011
GBP000 GBP000
-------------------------------------------- --------- --------
Non--current assets
Property, plant and equipment 1,200 1,255
Goodwill 10,263 7,505
Other intangible assets 14,588 1,367
Deferred tax assets 1,813 2,764
-------------------------------------------- --------- --------
27,864 12,891
-------------------------------------------- --------- --------
Current assets
Trade and other receivables 18,893 22,860
Current tax receivable 110 568
Cash and cash equivalents 21,116 5,815
Other financial assets - 54
40,119 29,297
-------------------------------------------- --------- --------
Total assets 67,983 42,188
-------------------------------------------- --------- --------
Non--current liabilities
Long-term borrowings (3,000) -
Deferred tax liabilities (3,320) (1,197)
Provisions (57) -
-------------------------------------------- --------- --------
(6,377) (1,197)
-------------------------------------------- --------- --------
Current liabilities
Trade and other payables (22,058) (7,850)
Short-term borrowings (4,845) -
Current tax payable (3,063) (644)
Provisions (273) -
Other financial liabilities - -
-------------------------------------------- --------- --------
(30,239) (8,494)
-------------------------------------------- --------- --------
Total liabilities (36,616) (9,691)
-------------------------------------------- --------- --------
Net assets 31,367 32,497
-------------------------------------------- --------- --------
Equity attributable to the ordinary
equity shareholders of the parent company
Share capital 1,470 1,400
Share premium 9,370 8,081
Other reserves 1,042 1,042
Own shares (172) (175)
Retained earnings 19,657 22,149
-------------------------------------------- --------- --------
Total equity 31,367 32,497
-------------------------------------------- --------- --------
Total equity and liabilities 67,983 42,188
-------------------------------------------- --------- --------
Group Cash Flow Statement
For the year ended 31 December 2012
2012 2011
GBP000 GBP000
----------------------------------------- --------- --------
Net cash inflow from operating
activities
Profit before tax 3,663 4,930
Adjustments for:
Depreciation and amortisation 2,686 1,169
Foreign exchange gains (1,105) (56)
Finance revenue (1) (20)
Finance cost 198 101
Share-based payment expense 300 300
----------------------------------------- --------- --------
5,741 6,424
Decrease in trade and other receivables 3,994 359
Increase/(decrease) in trade and
other payables 14,516 (1,008)
Decrease/(increase) in financial
assets and liabilities 54 (61)
Cash generated from operations 24,305 5,714
Income taxes paid (1,434) (2,086)
----------------------------------------- --------- --------
Net cash flows from operating
activities 22,871 3,628
----------------------------------------- --------- --------
Investing activities
Acquisition of subsidiary, net (7,771) -
of cash acquired
Purchase of tangible non-current
assets (514) (443)
Purchase of intangible non-current
assets (6,669) (635)
Restricted cash (12,287) -
Finance revenue received 1 20
Net cash used in investing activities (27,240) (1,058)
----------------------------------------- --------- --------
Financing activities
Issue of ordinary shares 1,359 23
Purchase of ordinary shares for
cancellation - (175)
Advances of bank borrowings 6,000 -
Repayment of bank borrowings (600) -
Finance costs paid (198) (101)
Dividends paid to equity holders
of parent (857) (1,100)
Net cash generated from/(used
in) financing activities 5,704 (1,353)
----------------------------------------- --------- --------
Net increase in cash and cash
equivalents 1,335 1,217
Cash and cash equivalents at 1
January 5,815 4,506
Exchange adjustments (766) 92
----------------------------------------- --------- --------
Cash and cash equivalents at 31
December 6,384 5,815
----------------------------------------- --------- --------
1. Basis of preparation
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2012
or 2011. Statutory accounts for the years ended 31 December 2012
and 31 December 2011 have been reported on by the independent
auditors. The independent auditors' reports on the annual reports
and financial statements for 2012 and 2011 were unqualified, did
not draw attention to any matters by way of emphasis and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
Statutory accounts for the year ended 31 December 2011 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2012 will be delivered to the Registrar
in due course.
The financial information set out in this preliminary results
release has been prepared using the recognition and measurement
principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations adopted for use
in the European Union (collectively Adopted IFRSs). The accounting
policies adopted in these preliminary results have been
consistently applied to all the years presented and are consistent
with the policies used in the preparation of the statutory accounts
for the period ended 31 December 2011.
2. Segment information
The Group has adopted IFRS 8 Operating segments, which uses a
"management approach", under which information is presented on the
same basis as that used for internal reporting purposes.
With regard to the balance sheet, those elements of the balance
sheet where regional reporting is prepared have been disclosed.
Those elements are trade receivables and provisions, amounts
recoverable on contracts and deferred revenue.
Transactions between the reportable segments are carried out at
internally agreed rates and are reflected in the performance of
each segment.
At the balance sheet date 7% of total trade receivables were
concentrated with one of the Group's customers (2011: 7%). The
balance was spread over 162 (2011: 132) customers, none of whom
comprised more than 5% (2011: 6%) of the total.
Year ended 31 December Americas Asia EMEA Unallocated Total
2012
GBP000 GBP000 GBP000 GBP000 GBP000
Provision of services
(Consulting) 22,807 11,666 9,847 - 44,320
Sale of goods (Software) 9,107 5,452 4,261 - 18,820
Inter-segment revenue 860 403 756 - 2,019
----------------------------- --------- ------- ------- ------------ --------
Total revenue 32,774 17,521 14,864 - 65,159
Revenues carried out by
other segments (860) (403) (756) - (2,019)
----------------------------- --------- ------- ------- ------------ --------
Revenue from external
customers 31,914 17,118 14,108 - 63,140
----------------------------- --------- ------- ------- ------------ --------
Contribution 16,553 4,743 3,732 - 25,028
Operating profit/(loss)
before amortisation 11,559 822 91 (6,489) 5,983
Amortisation (438) - - (1,685) (2,123)
----------------------------- --------- ------- ------- ------------ --------
Operating profit/(loss) 11,121 822 91 (8,174) 3,860
Finance revenue - - - 1 1
Finance cost - - - (198) (198)
----------------------------- --------- ------- ------- ------------ --------
Profit/(loss) before tax 11,121 822 91 (8,371) 3,663
Tax expense - - - (5,309) (5,309)
-----------------------------
Profit/(loss) for the
year 11,121 822 91 (13,680) (1,646)
----------------------------- --------- ------- ------- ------------ --------
As at 31 December 2012 Americas Asia EMEA Unallocated Total
GBP000 GBP000 GBP000 GBP000 GBP000
Trade receivables 1,888 2,321 4,814 - 9,023
Provisions (79) (57) (2,002) - (2,138)
------------------------ --------- ------- -------- ------------ --------
Net carrying amount 1,809 2,264 2,812 - 6,885
------------------------ --------- ------- -------- ------------ --------
Amounts recoverable
on contracts 2,762 4,517 3,263 - 10,542
------------------------ --------- ------- -------- ------------ --------
Deferred revenue 7,960 1,334 1,024 - 10,318
------------------------ --------- ------- -------- ------------ --------
Year ended 31 December Americas Asia EMEA Unallocated Total
2011
GBP000 GBP000 GBP000 GBP000 GBP000
Provision of services
(Consulting) 18,516 12,786 11,431 - 42,733
Sale of goods (Software) 3,879 4,695 4,418 - 12,992
Inter-segment revenue 1,134 246 671 - 2,051
----------------------------- --------- ------- ------- ------------ --------
Total revenue 23,529 17,727 16,520 - 57,776
Revenues carried out by
other segments (1,134) (246) (671) - (2,051)
----------------------------- --------- ------- ------- ------------ --------
Revenue from external
customers 22,395 17,481 15,849 - 55,725
----------------------------- --------- ------- ------- ------------ --------
Contribution 9,819 7,567 5,768 - 23,154
Operating profit/(loss)
before amortisation 4,534 3,348 688 (2,880) 5,690
Amortisation - - - (679) (679)
----------------------------- --------- ------- ------- ------------ --------
Operating profit/(loss) 4,534 3,348 688 (3,559) 5,011
Finance revenue - - - 20 20
Finance cost - - - (101) (101)
----------------------------- --------- ------- ------- ------------ --------
Profit/(loss) before tax 4,534 3,348 688 (3,640) 4,930
Tax expense - - - (1,673) (1,673)
-----------------------------
Profit/(loss) for the
year 4,534 3,348 688 (5,313) 3,257
----------------------------- --------- ------- ------- ------------ --------
As at 31 December 2011 Americas Asia EMEA Unallocated Total
GBP000 GBP000 GBP000 GBP000 GBP000
Trade receivables 2,592 3,088 5,114 - 10,794
Provisions - - (1,767) - (1,767)
------------------------ --------- ------- -------- ------------ --------
Net carrying amount 2,592 3,088 3,347 - 9,027
------------------------ --------- ------- -------- ------------ --------
Amounts recoverable
on contracts 2,311 4,560 5,491 - 12,362
------------------------ --------- ------- -------- ------------ --------
Deferred revenue 2,197 1,176 1,243 - 4,616
------------------------ --------- ------- -------- ------------ --------
Measure of underlying profit/(loss) is shown in note 3b.
Revenue from Non-current
external customers assets
2012 2011 2012 2011
GBP000 GBP000 GBP000 GBP000
------------------------------------ ---------- ---------- ------- -------
United Kingdom 1,561 1,384 18,086 6,030
Mexico 13,147 10,722 - -
United States of America 7,227 8,246 7,780 3,835
Ecuador 5,833 - - -
Australia 4,379 1,155 - -
Canada 3,977 2,092 - -
China 3,320 2,294 - -
India 1,768 3,543 - -
Malaysia 1,616 2,750 - -
South Korea 624 2,504 - -
Other 19,688 21,035 185 262
------------------------------------ ---------- ---------- ------- -------
63,140 55,725 26,051 10,127
------------------------------------ ---------- ---------- ------- -------
Revenues above are based on the location of the customer and
non-current assets on the location of the assets. The countries
listed represent those where the total revenue or assets are
greater than 5% of the Group total.
The following customers account for more than 10% of the Group's
revenues:
Revenue Percentage
2012 2011 2012 2011
GBP000 GBP000 % %
------------------------------------ ------- ------- ------- -----
Customer 1 13,147 10,722 21% 19%
------------------------------------ ------- ------- ------- -----
3. Group operating profit
This is stated after charging/(crediting) the 2012 2011
following:
GBP000 GBP000
----------------------------------------------- ------- -------
Depreciation and amortisation:
Depreciation 563 490
Amortisation of intellectual property rights
- existing intellectual property rights 205 119
- contract based intangibles 438 -
- business combination 692 -
- development costs carried forward 788 560
----------------------------------------------- ------- -------
Total 2,686 1,169
Included in other operating charges:
Operating lease rentals
- minimum lease payments 2,511 2,566
- sublease rentals received (172) (163)
Share-based payments 300 300
Net foreign exchange differences 430 (32)
----------------------------------------------- ------- -------
a) Research and development costs
During 2012 the Group incurred research and development costs of
GBP2.4m (2011: GBP2.1m). Of this amount GBP2,055,000 (2011:
GBP635,000) related to development expenditure for Petro--SIM and
has been carried forward as an intangible asset to be amortised
against expected future sales. The balance was charged directly to
staff and associate costs and direct costs in the income
statement.
b) Underlying operating profit
Americas Asia EMEA Unallocated Total
Year ended 31 December 2012 GBP000 GBP000 GBP000 GBP000 GBP000
Operating profit/(loss) 11,121 822 91 (8,174) 3,860
Amortisation of acquisition
intangibles - - - 897 897
Development costs carried
forward (730) (645) (680) - (2,055)
Amortisation of development
costs carried forward - - - 788 788
Arbitration costs - - - 150 150
Acquisition costs - - - 316 316
Redundancy and reorganisation
costs 187 87 553 903 1,730
Underlying operating profit/(loss) 10,578 264 (36) (5,120) 5,686
Finance revenue - - - 1 1
Finance cost - - - (198) (198)
------------------------------------ ----------- ------- ------- ------------ --------
Underlying profit/(loss)
before tax 10,578 264 (36) (5,317) 5,489
Tax expense - - - (6,656) (6,656)
------------------------------------ ----------- ------- ------- ------------ --------
Underlying profit/(loss)
after tax 10,578 264 (36) (11,973) (1,167)
------------------------------------ ----------- ------- ------- ------------ --------
Americas Asia EMEA Unallocated Total
Year ended 31 December 2011 GBP000 GBP000 GBP000 GBP000 GBP000
Operating profit/(loss) 4,534 3,348 688 (3,559) 5,011
Amortisation of acquisition
intangibles - - - 119 119
Development costs carried
forward (223) (185) (227) - (635)
Amortisation of development
costs carried forward - - - 560 560
Exceptional bad debt provision - - 357 - 357
Arbitration costs - - - 557 557
------------------------------------ ----------- ------- ------- ------------ --------
Underlying operating profit/(loss) 4,311 3,163 818 (2,323) 5,969
Finance revenue - - - 20 20
Finance cost - - - (101) (101)
------------------------------------ ----------- ------- ------- ------------ --------
Underlying profit/(loss)
before tax 4,311 3,163 818 (2,404) 5,888
Tax expense - - - (1,958) (1,958)
------------------------------------ ----------- ------- ------- ------------ --------
Underlying profit/(loss)
after tax 4,311 3,163 818 (4,362) 3,930
------------------------------------ ----------- ------- ------- ------------ --------
4. Tax expense
Tax on profit charged in the income statement
2012 2011
GBP000 GBP000
Current tax expense
Income tax of overseas operations 4,386 774
Withholding taxes payable 735 651
Double tax relief (412) (56)
Adjustment for over provision in prior periods (748) (3)
--------------------------------------------------- ------- -------
3,961 1,366
--------------------------------------------------- ------- -------
Deferred tax expense
Origination and reversal of temporary differences 398 94
Unrelieved tax losses carried forward against
profits of future years 1,092 37
Asset amortisation temporary differences (142) 176
--------------------------------------------------- ------- -------
1,348 307
Total tax expense 5,309 1,673
--------------------------------------------------- ------- -------
5. (Loss)/Earnings per share
Basic (loss)/earnings per share are calculated by dividing after
tax net profit for the year attributable to Ordinary shareholders
of the parent company by the weighted average number of Ordinary
shares in issue during the year.
2012 2011
GBP000 GBP000
------------------------------------------------- -------- -------
Numerator - earnings
(Loss)/earnings for the purpose of basic EPS (1,646) 3,257
Effect of dilutive potential ordinary shares - -
------------------------------------------------- -------- -------
(Loss)/earnings for the purpose of basic EPS (1,646) 3,257
------------------------------------------------- -------- -------
Number Number
000s 000s
------------------------------------------------- -------- -------
Denominator - number of shares
Weighted average number of Ordinary shares used
in basic EPS 56,380 55,027
------------------------------------------------- -------- -------
Number of shares used for basic and underlying
earnings per share 56,380 55,027
Effect of dilutive potential ordinary shares 197 425
------------------------------------------------- -------- -------
Weighted average number of Ordinary shares for
the purposes of diluted EPS 56,577 55,452
------------------------------------------------- -------- -------
Pence Pence
------------------------------------------------- -------- -------
Basic (loss)/earnings per share (2.9)p 5.9p
Diluted (loss)/earnings per share (2.9)p 5.9p
Basic underlying (loss)/earnings per share (2.1)p 7.1p
Diluted underlying (loss)/earnings per share (2.1)p 7.1p
------------------------------------------------- -------- -------
Basic underlying loss per share are based upon an after tax loss
as shown in note 3b of GBP1.17m (2011: GBP3.93m profit) and on
56,380,000 (2011: 55,027,000) Ordinary shares, being the weighted
average number of Ordinary shares in issue during the period after
excluding the shares owned by the Employee Trust.
The dilution referred to above is shown below:
2012 2011
Number Number
000s 000s
Total share options outstanding 2,182 4,053
Share options excluded (see below) (1,871) (3,493)
--------------------------------------- -------- --------
Potentially exercisable share options 311 560
Fair value shares (114) (135)
--------------------------------------- -------- --------
Dilution 197 425
--------------------------------------- -------- --------
Share options excluded are those where the exercise price is
greater than the share price at 31 December 2012, those with
performance conditions that have not yet been met and those to be
settled by the Employee Trust.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JAMRTMBATBFJ
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