TIDMKBC
RNS Number : 7370Z
KBC Advanced Technologies plc
22 September 2015
Embargoed until 0700 hrs 22 September 2015
KBC Advanced Technologies plc
("KBC", the "Company" or the "Group")
Half year results for the six months ended 30 June 2015
KBC Advanced Technologies plc, a leading consultancy and
software provider to the hydrocarbon industry, today announces its
half year results for the six months ended 30 June 2015.
HIGHLIGHTS
- Solid operational and financial performance in difficult oil market conditions
- Revenue up 5% to GBP36.2m (H1 2014: GBP34.4m) with Consulting up 5% and Technology up 6%
- Adjusted profit before tax (as defined in note 7) grew 3% to GBP4.2m (H1 2014: GBP4.0m)
- Cost base reduced by around GBP3.5m per annum with full benefit expected in the second half
- Healthy pipeline of contracted work, up 17% to GBP74m at period end (H1 2014: GBP63m)
- Demand for KBC's operational excellence and profit improvement
services is increasing in refining
- Senior leadership team enhanced, with appointment of CEO and recruitment of new CFO
Ian Godden, Chairman of KBC, commented:
"Early management action in 2015 to respond to the oil price
fall, combined with an improving downstream refining market,
resulted in a solid first half performance. These actions, together
with the modernisation of KBC over recent years, led to a strong
finish to the first half and good momentum into the second half,
with early contract wins, higher consulting utilisation and good
Technology opportunities. Long term client relationships in the
downstream market are now delivering material contracts to the
Group as that market segment looks to profit improvement
initiatives.
The new CEO and his enhanced senior leadership team took action
to rebalance KBC's global resource pool, which has both improved
focus on the Group's strategic objectives and reduced KBC's cost
base, with full benefit expected in the second half year. At the
same time management has maintained focus on Technology and on
business development in growth regions such as the Middle East.
Recent contract wins in the Middle East and Russia improve
medium term visibility of Consulting revenue and therefore we
expect full year results to be in line with the Board's
expectations."
- Ends -
For further information, please contact:
KBC Advanced Technologies plc +44 (0)1932 236314
Andrew Howell, Chief Executive Officer
Eric Dodd, Chief Financial Officer
Cenkos Securities plc
Bobbie Hilliam/Harry Pardoe +44 (0)20 7397 8900
Weber Shandwick Financial
Nick Oborne/Tom Jenkins +44 (0)20 7067 0000
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.
KBC Advanced Technologies plc
("KBC", the "Company" or the "Group")
Half year results for the six months ended 30 June 2015
Chairman's Statement
The hydrocarbon industry is continuing to experience changing
and difficult conditions, impacting most upstream (and integrated
downstream) sectors, causing major project cutbacks throughout the
world and headwinds in discretionary spending budgets. In parts of
the downstream market, refinery and petrochemical margins have
improved, and the search for profit improvement has continued,
leading to recent firm demand for KBC's solutions.
The Group has reshaped and repositioned its business in response
to these conditions. KBC has reduced its cost base, bringing
annualised savings of approximately GBP3.5m, including
consolidation of offices in North America and reduction of staff in
more mature regions. The Group has continued its expansion in parts
of the world where hydrocarbon projects are still well-funded.
Whilst KBC has not altered its long-term strategy of increasing
and strengthening the more profitable software business, expanding
its resources in growth regions and breaking further into the
upstream sector, the Group has in the short term adjusted its
tactics to reflect the new market conditions in the upstream
sector. KBC currently sees further opportunity to develop its core
business in the downstream market particularly in Europe, the
Middle East and North Africa, areas which are experiencing a boost
from lower oil and gas prices and some expansion in refining and/or
petrochemicals. Investment in business development skills and
resources will therefore continue in these markets. In the
downstream sector we are executing our technology strategy of
adding KBC content to third party alliance software to deliver
software as a service.
KBC's core skills in providing clients with profit improvement
and operational excellence across the whole hydrocarbon chain are
compensating for the major cutbacks in new projects in
upstream.
TECHNOLOGY
Technology revenues were solid in the first half, growing by 6%
to GBP8.9m (H1 2014: GBP8.4m) with key contract wins in Australia,
Oman and the United States maintaining KBC's momentum in this
business. Revenue from royalties and maintenance, support and
upgrade revenue grew by 23% to GBP5.3m (H1 2014: GBP4.3m).
The upstream business acquired in 2014 with FEESA Ltd ("FEESA")
performed well in the first half, but is facing a tough upstream
market. Work continues on the integration of FEESA's products into
the KBC software suite, creating a unique selling point for the
Group.
New agreements with Kongsberg, announced in April 2015, have
strengthened KBC's business base and critical mass for the future
in upstream.
CONSULTING
Consulting revenue in the period was up by 5% to GBP27.3m (H1
2014: GBP26.0m). During the first half year the Group continued to
deliver on both its major South American project and a number of
new Middle East projects. Renewed client interest in Europe as
refinery margins improve has also resulted in growth in that
market.
The Group remains focused this year on the three key elements of
a successful consulting business (pricing, utilisation and staff
leverage) with a stronger and more effective global operations team
in place. The Group continues its emphasis on larger consulting
assignments where there is an opportunity for higher margins and
leverage along with the opportunity to deploy its own technology
and that of third parties.
Since the period end we have announced a three year, US$8.5m
contract to assist a major Middle Eastern client with margin
improvement and workforce capability development and a
multi-million dollar reliability and maintenance contract for a
major Russian refining company.
LEADERSHIP
The Group has strengthened its leadership with the appointment
of a new Chief Executive Officer and the appointment of a new Chief
Financial Officer. Internal appointments have also been made to two
positions: Chief Commercial Officer to improve the Group's sales
execution and Chief Technology Officer to support the commitment to
further technology investment and third party relationships.
RESULTS
Group revenue increased by 5% in the first half of the year to
GBP36.2m (H1 2014: GBP34.4m), with Consulting revenue growing by 5%
and Technology revenue growing by 6%. Direct costs increased by 20%
in the first half year to GBP6.1m (H1 2014: GBP5.1m) due to an
increase in subcontractor costs on projects where local third party
partners are required to secure multi-million pound contracts.
Staff and associate costs increased by 8% in the first half to
GBP17.8m (H1 2014: GBP16.5m) due to an increase in average
headcount compared to the first half of 2014, but have decreased by
4% when compared to the second half of 2014 as a result of the
restructuring of the Group's cost base in early 2015. The full
benefit of the restructuring is expected to be realised during the
remainder of the year. Other operating charges increased by 2% in
the first half to GBP7.3m (H1 2014: GBP7.1m) due to restructuring
costs of GBP0.8m, offset by reduced foreign exchange losses of
GBP0.5m (H1 2014: GBP0.7m) and recruitment costs. Depreciation and
amortisation charges increased by 39% in the first half to GBP3.4m
(H1 2014: GBP2.5m) due to an increase in amortisation linked to the
acquisition of FEESA in July 2014.
EBITDA in the first half was GBP4.1m (11% EBITDA margin)
compared with GBP4.9m (14% EBITDA margin) in the first half of
2014. This margin reduction was due to lower Consulting utilisation
and higher staff and associate costs before executing the
restructuring programme earlier in the year. Adjusted EBITDA (as
detailed in note 8) was GBP4.9m (14% aEBITDA margin) in the first
half compared with GBP5.3m (15% aEBITDA margin) in the first half
of 2014.
Profit before tax decreased in the first half to GBP1.6m (H1
2014: GBP2.9m) due to increases in amortisation of acquisition
intangibles, and redundancy and reorganisation costs.
Profit before tax, as detailed in note 7, adjusted for
acquisitions, capitalisation of R&D, amortisation, exceptional
and other items which do not reflect underlying operations,
increased to GBP4.2m in the first half year (H1 2014: GBP4.0m)
which represents a 12% adjusted profit before tax margin (H1 2014:
12%).
The tax expense in the first half was GBP0.6m (H1 2014: GBP1.1m)
reflecting an estimated effective year-end tax rate reduction to
37% (H1 2014: 39%), driven by the Group's geographic mix of
business and location of contracting entities.
Profit after tax in the first half of 2015 was GBP1.0m (H1 2014:
GBP1.8m). Basic earnings per share in the period was 1.2p, down
from 2.9p in the first half of 2014. On an adjusted basis, earnings
per share decreased by 16% to 3.8p (H1 2014: 4.5p).
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During the period the Group incurred research and development
costs of GBP2.3m (H1 2014: GBP1.7m), the increase being due to the
research and development costs in FEESA. Of this amount, GBP0.8m
(H1 2014: GBP0.7m) related to development expenditure and has been
carried forward as an intangible asset. Amortisation of development
costs in the period was GBP0.8m (H1 2014: GBP0.7m).
The Company expects its cash balance to grow sequentially in
line with normal seasonal weighting. The final year end cash
balance is expected, however, to reflect increased working capital
demands. Net cash at 30 June 2015 was GBP10.6m (31 December 2014:
GBP11.0m) with no outstanding bank loans. This decrease in net cash
is due to the timing of receipts associated with large
contracts.
Net cash inflow during the period from operations was GBP2.6m
(H1 2014: GBP2.1m outflow).
Trade and other receivables increased to GBP43.7m (H1 2014:
GBP30.1m) due largely to the extension of a multi-year
contract.
The Group's pipeline of contracted work at 30 June 2015 was
GBP74m, which compares to GBP63m at 30 June 2014 and GBP88m at 31
December 2014 (31 December 2013: GBP78m).
DIVIDEND
A final dividend for the year to 31 December 2014 of 1.1p per
share was paid to shareholders on 22 July 2015.
As last year, the Board does not intend to pay a dividend with
respect to the first half year and intends to propose a final
dividend following its full year results.
BOARD
Andrew Howell, already a Board member, was appointed as the new
CEO on 1 January 2015. Ian Godden, previously Executive Chairman,
has been re-appointed as Non-Executive Chairman as of 1 January
2015 and continues his presence in the Middle East to assist the
executive team in expansion within the Middle East, North Africa
and parts of Asia. The new Chief Financial Officer, Eric Dodd,
joined the Group on 1 May 2015, replacing the interim CFO.
In line with good corporate governance practice, the Chairman
has resigned as a member of the Audit and Remuneration Committees.
Paul McCloskey has been appointed as Chairman of the Nomination
Committee, with Oliver Scott stepping down from that role but
remaining as a member of the Committee.
OUTLOOK
The second half of 2015 has started well. KBC's traditional
strengths in the downstream area have resulted in a number of
Consulting contracts and opportunities which are helping to buffer
the Group from the full hydrocarbon downturn. Together with current
opportunities for Technology, these give KBC a solid business base
and the Board expects the full year results to be in line with its
expectations.
Ian Godden
Chairman
22 September 2015
Group income statement
for the six months ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBP000 GBP000 GBP000
------------------------------------- ---- ----------- ----------- ------------
Revenue 36,226 34,385 75,954
Direct costs (6,113) (5,101) (13,113)
Staff and associate costs (17,759) (16,481) (35,855)
Depreciation and amortisation (3,399) (2,452) (5,691)
Other operating charges (7,288) (7,116) (14,132)
------------------------------------- ---- ----------- ----------- ------------
Operating profit 1,667 3,235 7,163
Finance revenue 13 46 86
Finance cost (62) (393) (578)
------------------------------------- ---- ----------- ----------- ------------
Profit before tax 1,618 2,888 6,671
Tax expense 4 (599) (1,128) (2,592)
------------------------------------- ---- ----------- ----------- ------------
Profit for the period 1,019 1,760 4,079
------------------------------------- ---- ----------- ----------- ------------
Earnings per share attributable
to the ordinary equity shareholders
of the parent company 6
Basic 1.2p 2.9p 5.7p
Diluted 1.2p 2.8p 5.5p
------------------------------------- ---- ----------- ----------- ------------
Group statement of comprehensive income
for the six months ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
------------------------------------------- ----------- ----------- ------------
Profit for the period 1,019 1,760 4,079
Other comprehensive (loss)/income:
- exchange differences on translation
of foreign operations recognised directly
in equity (422) (747) 1,595
------------------------------------------- ----------- ----------- ------------
Total comprehensive income recognised
in the period 597 1,013 5,674
------------------------------------------- ----------- ----------- ------------
Group statement of changes in equity
for the six months ended 30 June 2015
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 2015 2,044 32,044 113 2,134 (518) 3,410 2,905 24,137 66,269
Profit for the
period - - - - - - - 1,019 1,019
Other comprehensive
loss - - - - - - (422) - (422)
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
Total comprehensive
(loss)/income - - - - - - (422) 1,019 597
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
Share-based payments - - - - - 390 - - 390
Shares issued 14 - - - - - - - 14
Movement in own
shares - - - - 30 - - (30) -
At 30 June 2015 2,058 32,044 113 2,134 (488) 3,800 2,483 25,126 67,270
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
At 1 January 2014 1,479 9,437 113 929 (173) 2,710 1,310 20,711 36,516
Profit for the
year - - - - - - - 4,079 4,079
Other comprehensive
profit - - - - - - 1,595 - 1,595
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
Total comprehensive
income - - - - - - 1,595 4,079 5,674
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
Share-based payments - - - - - 700 - - 700
Shares issued
for cash, net
of transaction
costs 540 22,607 - - - - - - 23,147
Shares issued
in business combination 25 - - 1,205 - - - - 1,230
Share buyback - - - - (196) - - - (196)
Movement in own
shares - - - - (149) - - 149 -
Dividends - - - - - - - (802) (802)
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
At 31 December
2014 2,044 32,044 113 2,134 (518) 3,410 2,905 24,137 66,269
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------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
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
(loss)/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
------------------------ -------- -------- ----------- -------- ------- --------- --------- --------- -------
Group balance sheet
as at 30 June 2015
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
--------------------------------- --- ------------ ----------- ------------
Non-current assets
Property, plant and equipment 1,159 888 1,026
Goodwill 15,371 10,095 15,401
Other intangible assets 16,024 10,454 18,336
Deferred tax assets 786 447 786
-------------------------------------- ------------ ----------- ------------
33,340 21,884 35,549
------------------------------------- ------------ ----------- ------------
Current assets
Trade and other receivables 43,679 30,062 42,312
Current tax receivable 2,711 2,297 2,438
Cash and cash equivalents 11,361 25,375 11,883
57,751 57,734 56,633
------------------------------------- ------------ ----------- ------------
Total assets 91,091 79,618 92,182
-------------------------------------- ------------ ----------- ------------
Non-current liabilities
Deferred tax liabilities (2,697) (1,272) (2,866)
Provisions (53) (203) (53)
-------------------------------------- ------------ ----------- ------------
(2,750) (1,475) (2,919)
Current liabilities
Trade and other payables (16,539) (11,813) (17,539)
Short-term borrowings (718) (971) (860)
Current tax payable (3,725) (4,268) (4,441)
Provisions (89) (130) (154)
-------------------------------------- ------------ ----------- ------------
(21,071) (17,182) (22,994)
------------------------------------- ------------ ----------- ------------
Total liabilities (23,821) (18,657) (25,913)
-------------------------------------- ------------ ----------- ------------
Net assets 67,270 60,961 66,269
-------------------------------------- ------------ ----------- ------------
Equity attributable to ordinary equity shareholders of parent company
Share capital 2,058 2,016 2,044
Share premium 32,044 32,044 32,044
Other reserves 2,247 1,042 2,247
Own shares (488) (173) (518)
Retained earnings 31,409 26,032 30,452
-------------------------------------- ------------ ----------- ------------
Total equity 67,270 60,961 66,269
-------------------------------------- ------------ ----------- ------------
Total equity and liabilities 91,091 79,618 92,182
-------------------------------------- ------------ ----------- ------------
Group cash flow statement
for the six months ended 30 June 2015
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBP000 GBP000 GBP000
----------------------------------------- ---- ----------- ----------- ------------
Net cash inflow from operating
activities
Profit before tax 1,618 2,888 6,671
Adjustments for:
Depreciation and amortisation 3,399 2,452 5,691
Foreign exchange (gains)/losses (193) (192) 647
Finance revenue (13) (46) (86)
Finance cost 62 393 578
Share-based payment expense 390 300 700
----------------------------------------- ---- ----------- ----------- ------------
5,263 5,795 14,201
Increase in trade and other receivables (1,640) (7,534) (19,233)
(Decrease)/increase in trade and
other payables (1,065) (382) 2,370
Cash generated from/(used in) operations 2,558 (2,121) (2,662)
Income taxes paid (1,484) (1,809) (3,369)
----------------------------------------- ---- ----------- ----------- ------------
Net cash generated from/(used in)
operating activities 1,074 (3,930) (6,031)
----------------------------------------- ---- ----------- ----------- ------------
Investing activities
Acquisition of subsidiary, net
of cash acquired - - (9,885)
Purchases of tangible non-current
assets (396) (298) (669)
Purchases of intangible non-current
assets (834) (728) (1,552)
Finance revenue received 13 46 86
----------------------------------------- ---- ----------- ----------- ------------
Net cash used in from investing
activities (1,217) (980) (12,020)
----------------------------------------- ---- ----------- ----------- ------------
Financing activities
Issue of ordinary shares 14 24,000 24,014
Issue cost of ordinary shares - (867) (867)
Payments to acquire treasury shares - - (196)
Repayment of bank borrowings - (3,000) (3,000)
Finance costs paid (62) (393) (578)
Dividends paid to equity holders
of parent - - (802)
Net cash (used in)/generated from
financing activities (48) 19,740 18,571
----------------------------------------- ---- ----------- ----------- ------------
Net (decrease)/increase in cash
and cash equivalents (191) 14,830 520
Cash and cash equivalents at beginning
of period 11,023 9,931 9,931
Exchange adjustments (189) (357) 572
----------------------------------------- ---- ----------- ----------- ------------
Cash and cash equivalents at period
end 9 10,643 24,404 11,023
----------------------------------------- ---- ----------- ----------- ------------
Notes to the half year financial information
1. General information
KBC Advanced Technologies plc (the "Company") is a company
domiciled in England. The half year results of the Company for the
six months ended 30 June 2015 comprise the Company and its
subsidiaries (together referred to as the "Group").
2. Accounting policies
Basis of preparation
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The financial information presented in these half year results
has been prepared in accordance with the recognition and
measurement requirements of International Financial Reporting
Standards issued by the International Accounting Standards Board,
as adopted by the European Union. The principal accounting policies
adopted in the preparation of the financial information in this
Half year report are unchanged from those used in the company's
financial statements for the year ended 31 December 2014 and are
consistent with those that the company expects to apply in its
financial statements for the year ended 31 December 2015.
This Half year report will be sent to shareholders and published
on the Investor Relations section of the corporate website at
www.kbcat.com. Further copies of this Half Year Report may be
obtained from the Company Secretary, KBC Advanced Technologies plc,
42-50 Hersham Road, Walton on Thames, Surrey, KT12 1RZ.
The financial information for the year ended 31 December 2014
presented in this Half year report does not constitute the
company's statutory accounts for that period but has been derived
from them. The Annual Report for the year ended 31 December 2014
were audited and have been filed with the Registrar of Companies.
The Independent Auditors' Report on the Annual Report for the year
ended 31 December 2014 was unqualified and did not draw attention
to any matters by way of emphasis and did not contain statements
under s498(2) or (3) of the Companies Act 2006. The financial
information for the periods ended 30 June 2015 and 30 June 2014 are
unaudited.
3. Segment information
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.
At the balance sheet date 55% (December 2014: 39%) of total
trade receivables were concentrated with one (December 2014: one)
of the Group's customers. The balance was spread over 112 (December
2014: 123) customers, two of whom comprised more than 5% (December
2014: none) of the total.
Consulting Technology Unallocated Total
Six months ended 30 June 2015 GBP000 GBP000 GBP000 GBP000
-------------------------------- --------------------- ---------- ----------- -------
Revenue from external customers 27,337 8,889 - 36,226
-------------------------------- --------------------- ---------- ----------- -------
Operating profit 787 880 - 1,667
Finance revenue - - 13 13
Finance cost - - (62) (62)
-------------------------------- --------------------- ---------- ----------- -------
Profit/(loss) before tax 787 880 (49) 1,618
Tax expense - - (599) (599)
-------------------------------- --------------------- ---------- ----------- -------
Profit/(loss) for the period 787 880 (648) 1,019
-------------------------------- --------------------- ---------- ----------- -------
Consulting Technology Unallocated Total
As at 30 June 2015 GBP000 GBP000 GBP000 GBP000
----------------------- ---------- ---------- ----------- -------
Trade receivables 13,465 3,107 - 16,572
Provisions (294) (275) - (569)
----------------------- ---------- ---------- ----------- -------
Net carrying amount 13,171 2,832 - 16,003
Amounts recoverable on
contracts 14,221 12,012 - 26,233
----------------------- ---------- ---------- ----------- -------
Deferred revenue 693 6,153 - 6,846
----------------------- ---------- ---------- ----------- -------
Consulting Technology Unallocated Total
Year ended 31 December 2014 GBP000 GBP000 GBP000 GBP000
-------------------------------- ---------- ---------- ----------- -------
Revenue from external customers 54,973 20,981 - 75,954
-------------------------------- ---------- ---------- ----------- -------
Operating profit 2,117 5,046 - 7,163
Finance revenue - - 86 86
Finance cost - - (578) (578)
-------------------------------- ---------- ---------- ----------- -------
Profit/(loss) before tax 2,117 5,046 (492) 6,671
Tax expense - - (2,592) (2,592)
-------------------------------- ---------- ---------- ----------- -------
Profit/(loss) for the period 2,117 5,046 (3,084) 4,079
-------------------------------- ---------- ---------- ----------- -------
Consulting Technology Unallocated Total
As at 31 December 2014 GBP000 GBP000 GBP000 GBP000
----------------------- ---------- ---------- ----------- -------
Trade receivables 10,410 4,635 (3) 15,042
Provisions (273) (270) - (543)
----------------------- ---------- ---------- ----------- -------
Net carrying amount 10,137 4,365 (3) 14,499
Amounts recoverable on
contracts 13,659 12,377 - 26,036
----------------------- ---------- ---------- ----------- -------
Deferred revenue 802 4,471 - 5,273
----------------------- ---------- ---------- ----------- -------
3. Segment information (continued)
Consulting Technology Unallocated Total
Six months ended 30 June 2014 GBP000 GBP000 GBP000 GBP000
--------------------------------- ---------- ---------- ----------- -------
Revenue from external customers 26,012 8,373 - 34,385
--------------------------------- ---------- ---------- ----------- -------
Operating profit 1,454 1,781 - 3,235
Finance revenue - - 46 46
Finance cost - - (393) (393)
--------------------------------- ---------- ---------- ----------- -------
Profit/(loss) before tax 1,454 1,781 (347) 2,888
Tax expense - - (1,128) (1,128)
--------------------------------- ---------- ---------- ----------- -------
Profit/(loss) for the period 1,454 1,781 (1,475) 1,760
--------------------------------- ---------- ---------- ----------- -------
Consulting Technology Unallocated Total
As at 30 June 2014 GBP000 GBP000 GBP000 GBP000
--------------------------------- ---------- ---------- ----------- -------
Trade receivables 8,006 3,592 13 11,611
Provisions (626) (247) (13) (886)
--------------------------------- ---------- ---------- ----------- -------
Net carrying amount 7,380 3,345 - 10,725
Amounts recoverable on contracts 7,843 9,492 - 17,335
--------------------------------- ---------- ---------- ----------- -------
Deferred revenue 519 4,880 - 5,399
--------------------------------- ---------- ---------- ----------- -------
Revenue from external
customers Non-current assets
6 months 6 months 6 months
6 months ended ended ended
ended 30 June 30 June 30 June
30 June 2015 2014 2015 2014
GBP000 GBP000 GBP000 GBP000
-------------------------- -------------- --------- ---------- ---------
Ecuador 13,092 10,239 4 6
United States of America 3,522 3,972 6,191 5,340
Saudi Arabia 2,926 981 - -
Mexico 1,235 1,936 - -
United Kingdom 1,209 947 26,236 15,808
Canada 1,176 1,942 12 17
Thailand 900 2,091 - -
Other 12,166 12,277 111 266
-------------------------- -------------- --------- ---------- ---------
36,226 34,385 32,554 21,437
-------------------------- -------------- --------- ---------- ---------
Revenues above are based on the location of the customer and
non-current assets on the location of the Group's assets. The
countries listed represent those where the total revenue or assets
are greater than 5% of the Group total on an annualised basis.
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The following customers account for more than 10% of the Group's
revenues:
Revenue Percentage
6 months 6 months
6 months 6 months ended ended
ended ended 30 June 30 June
30 June 2015 30 June 2014 2015 2014
GBP000 GBP000 GBP000 GBP000
GBP000 GBP000 % %
------------ -------------- -------------- --------- ---------
Customer 1 13,092 10,239 36% 30%
------------ -------------- -------------- --------- ---------
The revenue generated from the major customer above is derived
from both Consulting and Technology.
The adjusted profit before tax (note 7) and adjusted EBITDA
(note 8) also form part of the internal reporting.
4. Tax
Tax is charged at 37% for the six months ended 30 June 2015 (30
June 2014: 39% and 31 December 2014: 39%) representing the best
estimate of the average annual effective tax rate expected to apply
for the full year, applied to the pre-tax income of the six month
period.
5. Dividends
A final dividend for the year to 31 December 2014 of 1.1p per
share was paid to shareholders on 22 July 2015.
6. Earnings per share
6 months 6 months Year ended
ended ended 31 December
30 June 2015 30 June 2014 2014
GBP000 GBP000 GBP000
-------------------------------------- ------------- ------------- ------------
Numerator - earnings
Earnings for the purpose of basic
EPS 1,019 1,760 4,079
Effect of dilutive potential ordinary
shares - - -
-------------------------------------- ------------- ------------- ------------
Earnings for the purpose of diluted
EPS 1,019 1,760 4,079
-------------------------------------- ------------- ------------- ------------
Denominator - number of shares
Weighted average number of ordinary
shares used in basic EPS 82,212 61,219 71,150
Effect of dilutive potential ordinary
shares 3,279 2,412 2,559
-------------------------------------- ------------- ------------- ------------
Weighted average number of ordinary
shares for the purposes of diluted
EPS 85,491 63,631 73,709
-------------------------------------- ------------- ------------- ------------
Basic earnings per share 1.2p 2.9p 5.7p
-------------------------------------- ------------- ------------- ------------
Diluted earnings per share 1.2p 2.8p 5.5p
-------------------------------------- ------------- ------------- ------------
7. Adjusted profit before tax
Consulting Technology Unallocated Total
Six months ended 30 June 2015 GBP000 GBP000 GBP000 GBP000
---------------------------------------- --------------------- ---------- ----------- -------
Operating profit 787 880 - 1,667
Amortisation of acquisition intangibles - 1,424 - 1,424
Development costs carried forward - (834) - (834)
Amortisation of development costs
carried forward - 754 - 754
Redundancy and reorganisation
costs 609 198 - 807
Share-based payments 294 96 - 390
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted operating profit 1,690 2,518 - 4,208
---------------------------------------- --------------------- ---------- ----------- -------
Finance revenue - - 13 13
Finance cost - - (62) (62)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) before
tax 1,690 2,518 (49) 4,159
Tax expense - - (1,012) (1,012)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) for the
period 1,690 2,518 (1,061) 3,147
---------------------------------------- --------------------- ---------- ----------- -------
Consulting Technology Unallocated Total
Year ended 31 December 2014 GBP000 GBP000 GBP000 GBP000
---------------------------------------- --------------------- ---------- ----------- -------
Operating profit 2,117 5,046 - 7,163
Amortisation of acquisition intangibles - 2,064 - 2,064
Development costs carried forward - (1,552) - (1,552)
Amortisation of development costs
carried forward - 1,299 - 1,299
Acquisition costs - 352 - 352
Redundancy and reorganisation
costs (29) (9) - (38)
Share-based payments 506 194 - 700
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted operating profit 2,594 7,394 - 9,988
---------------------------------------- --------------------- ---------- ----------- -------
Finance revenue - - 86 86
Finance cost - - (578) (578)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) before
tax 2,594 7,394 (492) 9,496
Tax expense - - (2,888) (2,888)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) for the
period 2,594 7,394 (3,380) 6,608
---------------------------------------- --------------------- ---------- ----------- -------
7. Adjusted profit before tax (continued)
Consulting Technology Unallocated Total
Six months ended 30 June 2014 GBP000 GBP000 GBP000 GBP000
---------------------------------------- --------------------- ---------- ----------- -------
Operating profit 1,454 1,781 - 3,235
Amortisation of acquisition intangibles - 752 - 752
Development costs carried forward - (728) - (728)
Amortisation of development costs
carried forward - 704 - 704
Redundancy and reorganisation
costs 83 28 - 111
Share-based payments 227 73 - 300
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted operating profit 1,764 2,610 - 4,374
---------------------------------------- --------------------- ---------- ----------- -------
Finance revenue - - 46 46
Finance cost - - (393) (393)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) before
tax 1,764 2,610 (347) 4,027
Tax expense - - (1,277) (1,277)
---------------------------------------- --------------------- ---------- ----------- -------
Adjusted profit/(loss) for the
period 1,764 2,610 (1,624) 2,750
---------------------------------------- --------------------- ---------- ----------- -------
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