The tax expense in the first half was GBP1.1m (H1 2013: GBP0.1m)
reflecting an estimated effective year-end tax rate of 39%, driven
by the Group's geographic mix of business. The 2013 first half tax
charge was significantly lower due to a number of one-off items
following the restructuring of the Group's operations.
Profit after tax in the first half of 2014 was GBP1.8m (H1 2013:
GBP2.9m). Basic earnings per share in the period was 2.9p, down
from 4.9p in the first half of 2013 due to the one-off tax credit
in 2013. On an adjusted basis, earnings per share increased by 2%
to 4.5p (H1 2013: 4.4p).
During the period the Group incurred research and development
costs of GBP1.7m (H1 2013: GBP1.3m). Of this amount, GBP0.7m (H1
2013: GBP0.5m) related to development expenditure and has been
carried forward as an intangible asset. Amortisation of development
costs in the period was GBP0.7m (H1 2013: GBP0.6m).
Net cash at 30 June 2014 was GBP24.4m (31 December 2013:
GBP6.9m) with no outstanding bank loans (31 December 2013:
GBP3.0m). This increase in net cash is largely due to the raising
of GBP24m, before expenses, from the placing of 20.9m Ordinary
shares in May 2014. Net cash outflow from operations was GBP2.2m,
largely as a result of additional working capital associated with
large contracts.
DIVIDEND
A final dividend for the year to 31 December 2013 of 1.0p per
share was paid to shareholders on 12 August 2014.
As last year, the Board does not intend to pay a dividend with
respect to the first half and intends to propose a final dividend
following its full year results.
BOARD
The Board appointed two new directors in April 2014, the
Managing Director of Technology, Andrew Howell, and the Managing
Partner of the Consulting business, Kevin Smith, to strengthen its
executive representation. An experienced interim Chief Financial
Officer (CFO), Andrew Hebb, was also appointed in April 2014 and a
search for a permanent CFO has been initiated. Paul Taylor
continues to serve as Deputy Chairman and our new Non-Executive
Director, Paul McCloskey, brings considerable expertise for KBC's
growth in the upstream oil and gas sector.
OUTLOOK
The second half of 2014 has started well and the Group has been
awarded a number of significant software contracts since June,
including a major five-year renewal of Petro-SIM for a South
American oil and gas major. The combination of Petro-SIM V6, to be
launched in late 2014, the continued success of the Infochem
Multiflash(TM) software and the new product, Maximus(TM), developed
by FEESA puts KBC in a very strong position to exploit the market's
need for operational improvement in upstream production. The
Consulting pipeline for larger projects is growing and recent
contract wins in South America, the Middle East and Asia provide
good prospects for the future. Our North American business has
returned to growth and is looking forward with renewed
optimism.
The business overall continues to improve significantly and a
more solid base has been established in the last 12 months from
which to make further gains across all areas of operation. We
remain confident that the full year results will be in line with
the Board's expectations.
Ian Godden
Executive Chairman
23 September 2014
Group income statement
for the six months ended 30 June 2014
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Note GBP000 GBP000 GBP000
-------------------------------- ---- ----------- ----------- ------------
Revenue 34,385 31,728 65,080
Direct costs (5,101) (4,205) (9,254)
Staff and associate costs (16,481) (16,905) (32,383)
Depreciation and amortisation (2,452) (2,281) (4,414)
Other operating charges (7,116) (5,153) (11,640)
-------------------------------- ---- ----------- ----------- ------------
Operating profit 3,235 3,184 7,389
Finance revenue 46 58 208
Finance cost (393) (293) (476)
-------------------------------- ---- ----------- ----------- ------------
Profit before tax 2,888 2,949 7,121
Tax expense 4 (1,128) (66) (1,584)
-------------------------------- ---- ----------- ----------- ------------
Profit for the period 1,760 2,883 5,537
-------------------------------- ---- ----------- ----------- ------------
Earnings per share attributable
to the ordinary equity
shareholders of the parent
company 6
Basic 2.9p 4.9p 9.5p
Diluted 2.8p 4.9p 9.2p
-------------------------------- ---- ----------- ----------- ------------
Group statement of comprehensive income
for the six months ended 30 June 2014
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
----------------------------------- ----------- ----------- ------------
Profit for the period 1,760 2,883 5,537
Other comprehensive (loss)/income:
- exchange differences on
retranslating foreign operations
recognised directly in equity (747) 1,011 (856)
----------------------------------- ----------- ----------- ------------
Total comprehensive income
recognised in the period 1,013 3,894 4,681
----------------------------------- ----------- ----------- ------------
Group statement of changes in equity
for the six months ended 30 June 2014
Issued Share Capital Merger Own Share- Foreign Retained Total
capital premium redemption reserve shares based exchange earnings GBP000
GBP000 GBP000 reserve GBP000 GBP000 payments reserve GBP000
GBP000 GBP000 GBP000
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
At 1 January
2014 1,479 9,437 113 929 (173) 2,710 1,310 20,711 36,516
Profit for
the period - - - - - - - 1,760 1,760
Other comprehensive
loss - - - - - - (747) - (747)
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
Total comprehensive
income - - - - - - (747) 1,760 1,013
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
Share-based
payments - - - - - 300 - - 300
Shares issued 537 22,607 - - - - - (12) 23,132
At 30 June
2014 2,016 32,044 113 929 (173) 3,010 563 22,459 60,961
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
Issued Share Capital Merger Own Share- Foreign Retained Total
capital premium redemption reserve shares based exchange earnings GBP000
GBP000 GBP000 reserve GBP000 GBP000 payments reserve GBP000
GBP000 GBP000 GBP000
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
At 1 January
2013 1,470 9,370 113 929 (172) 2,180 2,166 15,311 31,367
Profit for
the year - - - - - - - 5,537 5,537
Other comprehensive
loss - - - - - - (856) - (856)
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
Total comprehensive
income - - - - - - (856) 5,537 4,681
-------------------- -------- -------- ----------- -------- ------- --------- --------- --------- -------
Share-based
payments - - - - - 530 - - 530
Shares issued 9 67 - - (1) - - - 75
Purchase of
non-controlling
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