TIDMPNX
RNS Number : 1259U
Phoenix IT Group PLC
28 November 2013
28 November 2013
Phoenix IT Group plc
Interim Results for the six months ended 30 September 2013
Phoenix IT Group plc ('Phoenix' or 'the Group') the UK IT
services company, announces its results for the six months ended 30
September 2013.
FINANCIAL OVERVIEW
Underlying performance
-- Group revenues GBP116.9m (30 September 2012: GBP124.0m)
-- Underlying(1) EBITDA(3) GBP14.5m (30 September 2012: GBP17.0m)
-- Group underlying(1) operating profit GBP7.7m (30 September 2012: GBP9.9m)
-- Underlying(2) profit before tax GBP5.3m (30 September 2012: GBP7.8m)
-- Net debt (including finance leases) GBP74.6m (30 September 2012: GBP78.0m)
-- Order book GBP310.8m (30 September 2012: GBP284.6m)
-- Annual contract value GBP188.9m (30 September 2012: GBP187.7m)
-- Underlying(2) diluted earnings per share were 5.2p (30 September 2012: 7.6p)
-- Interim dividend 1.6p per share (30 September 2012: 3.7p per share)
Statutory performance
-- Profit from operations GBP3.8m (30 September 2012 loss from operations: GBP61.2m)
-- Profit before tax GBP1.2m (30 September 2012 loss before tax: GBP63.3m)
-- Diluted earnings per share 1.2p (30 September 2012 diluted loss per share: 83.9p)
-- Basic earnings per share 1.2p (30 September 2012 basic loss per share: 83.9p)
(1) Underlying is adjusted for non-recurring items GBP3.4m (30
September 2012: GBP70.0m) and amortisation of acquired intangibles
GBP0.5m (30 September 2012: GBP1.1m).
(2) Underlying is adjusted for non-recurring items GBP3.6m (30
September 2012: GBP70.0m) and amortisation of acquired intangibles
GBP0.5m (30 September 2012: GBP1.1m).
(3) EBITDA is group underlying(1) operating profit GBP7.7m (30
September 2012: GBP9.9m) plus depreciation GBP6.3m (30 September
2012: GBP6.6m) plus share option costs GBP0.5m (30 September 2012:
GBP0.5m).
Enquiries
Phoenix IT Group Tel: +44 (0)20 7562 0327
Peter Bertram Executive Chairman
Jane Aikman Chief Operating Officer & Chief Financial
Officer
FTI Consulting Tel: +44 (0)20 7831 3113
Charles Palmer
Christopher Lane
Interim Management Report to the Members of Phoenix IT Group
plc
This half-year interim management report covers the six months
ended 30 September 2013 and has been prepared to provide additional
information to the shareholders to assess the Group's strategies,
the success of those strategies and the potential for those
strategies to succeed in the future. This report should not be
relied on by any other party or for any other purpose.
Forward looking statements
Any forward looking statements made within this half-year
interim management report have been made in good faith by the
Directors based on the information available up to the date of the
Directors' approval of this report. These forward looking
statements should be treated with caution due to the inherent
uncertainties, including macroeconomic uncertainties, in the
markets that the Group serves and business risk factors which may
affect their outcome.
This interim management report has been prepared for the Phoenix
IT Group as a whole and therefore it gives greater emphasis to
those matters which are significant to Phoenix IT Group plc and its
subsidiary undertakings when viewed as a whole.
Overview
The first six months of the financial year have remained
challenging for the Group. Difficult trading conditions coupled
with the continued impact of legacy issues related to a disruptive
reorganisation have negatively affected results in the period.
Whilst management have been focussed on resolving these issues, as
previously announced, improvements are not expected until the
second half of the current financial year.
Performance improved during the first half of the year with the
run rate at the end of the half being better than at the beginning
of the year. This improvement has continued into the second half of
the financial year.
Group financial performance
Group revenues decreased in the period to GBP116.9m (30
September 2012: GBP124.0m). Underlying(1) EBITDA(3) for the period
was GBP14.5m (30 September 2012: GBP17.0m), underlying(1) operating
profit was GBP7.7m (30 September 2012: GBP9.9m) and underlying(2)
profit before tax was GBP5.3m (30 September 2012: GBP7.8m). Group
order book and annual contract value at 30 September 2013 were
GBP310.8m (30 September 2012: GBP284.6m) and GBP188.9m (30
September 2012: GBP187.7m) respectively.
The Group tax charge represents a tax rate of 23.3% (period
ended 30 September 2012: tax credit of GBP0.1m representing an
effective rate of 0.1%). This is based on the forecast annual
effective rate applied to profit before tax for the period and
takes into account the impact of the enactment of the Finance Act
2013, which includes a reduction in the rate of Corporation Tax
from 23% to 21% from 1 April 2014 and 20% from 1 April 2015.
Underlying(2) diluted earnings per share (excluding amortisation
of acquired intangibles and non-recurring costs) were 5.2p (30
September 2012: 7.6p).
Review of operations
Business Continuity
Unaudited six Unaudited six
months to 30 months to 30
September 2013 September 2012 Change
Revenue GBP26.6m GBP27.6m (GBP1.0m)
Underlying profit from operations GBP6.6m GBP8.0m (GBP1.4m)
Underlying operating margin 24.6% 29.1%
Order book GBP81.4m GBP91.2m (GBP9.8m)
Annual contract value GBP53.9m GBP54.0m (GBP0.1m)
Business Continuity provides the design, implementation and
hosting of work area / IT disaster recovery services and business
resilience and data backup. The business also provides Business
Continuity and IT Service Continuity consulting and on-going
program management.
The business continues to create new solutions for IT Business
resilience as an alternative to traditional disaster recovery
options. Revenues of GBP26.6m (30 September 2012: GBP27.6m; six
months ended 31 March 2013: GBP26.6m) were broadly flat compared to
the six month period ended 31 March 2013 reflecting a period of
business stability over the last twelve months. Underlying profit
from operations in the period was GBP6.6m (30 September 2012:
GBP8.0m; six months ended 31 March 2013: GBP6.9m).
Annual contract value has remained constant compared to the same
period last year, whilst the decrease in order book over the same
period is primarily due to a number of larger contracts which are
due for renewal in the future rolling off one more year of life in
the order book. Despite the decrease in order book, order intake
exceeded attrition in the period, resulting in positive net new
business.
The business provides both syndicated and dedicated work area
solutions. Syndicated seat utilisation has increased and stands at
45.6% at 30 September 2013 (31 March 2013 restated: 43.9%).
Dedicated seat utilisation decreased to 93.3% from 95.6% over the
same period as a result of increased capacity at our Hamilton site
in Scotland.
One of the main business resilience services is our Cloud Data
Backup and Replication offering. This service takes customer data
off-site into a secure Phoenix cloud vault ready for recovery. The
number of clients using our Cloud backup solutions has grown from
46 as at 31 March 2012, to 107 as at 31 March 2013 and to 121 as at
30 September 2013. The increase has resulted in annualised revenue
growth from Cloud backup solutions to GBP1.6m as at 30 September
2013 from GBP1.3m as at 31 March 2013 and GBP0.7m as at 30
September 2012, with attaching annualised revenues from other IT
recovery services of GBP2.0m as at 30 September 2013.
During the period Phoenix was awarded NetApp Gold Managed
Service Provider status for the provision of off-premise data
solutions including NetApp's Snap Mirror data replication solution
from within the Phoenix cloud offering.
Mid-market
Unaudited six Unaudited six
months to 30 months to 30
September 2013 September 2012 Change
Revenue GBP35.4m GBP42.7m (GBP7.3m)
Underlying loss from operations (GBP1.2m) (GBP2.6m) GBP1.4m
Underlying operating margin (3.4%) (6.1%)
Order book GBP61.0m GBP62.6m (GBP1.6m)
Annual contract value GBP37.4m GBP43.1m (GBP5.7m)
The Mid-market business comprises the provision of managed
services, professional services and hosting services together with
product sales directly to end users in the Mid-market.
Revenue reduced to GBP35.4m from GBP42.7m in the period ended 30
September 2012. Revenue decreased as a result of a reduction in one
large low margin professional services contract and some attrition
on traditional desktop service annuity contracts. Attrition in the
first half on annuity contracts was however better than expected.
Product revenues and other professional services revenues were
broadly constant and the sales team continues to focus on improving
the sales mix of the business.
The new management team continue to improve processes around
pricing and combined with a reorganisation and refocus of the sales
team, the underlying loss in the business has improved. The
underlying loss from operations decreased from GBP2.6m for the
period ended 30 September 2012 to a GBP1.2m loss for the current
period.
In November 2013, the business launched CloudSure UK, a next
generation enterprise class infrastructure that will enable us to
deliver IT resources as a service. CloudSure UK will be delivered
exclusively from Phoenix's UK data centres and includes the
elements of a cloud offering that our customers most frequently
request, in a secure, private, cloud environment.
Also in November, Phoenix announced its new status as a Hewlett
Packard ("HP") accredited platinum partner; a highly coveted
certification awarded to top tier partners only. The HP
accreditation is the latest in a number of vendor accreditations
awarded to the business.
Partner services
Unaudited six Unaudited six
months to 30 months to 30
September 2013 September 2012 Change
Revenue GBP54.9m GBP53.7m GBP1.2m
Underlying profit from operations GBP3.7m GBP5.8m (GBP2.1m)
Underlying operating margin 6.8% 10.8%
Order book GBP168.4m GBP130.8m GBP37.6m
Annual contract value GBP97.6m GBP90.6m GBP7.0m
The Partner services business provides a full range of IT
support services to large Systems Integrators and Outsourcers.
Revenues in the business have remained broadly consistent when
compared to both the previous six month period and the six month
period ended 30 September 2012. Whilst there continues to be
encouraging signs of new business activity, delayed sales cycles
have held back revenue growth. The order book has increased from
GBP130.8m as at 30 September 2012 to GBP168.4m due largely to a new
five year contract signed in November 2012 and a further five year
contract signed in September 2013, both with existing
customers.
The underlying operating margin has reduced from 10.8% to 6.8%.
Contract attrition at the beginning of the year on some higher
margin annuity contracts has adversely affected the margin in the
period. Due to the syndicated nature of some areas of our service
delivery cost base, it has been difficult to reduce our costs to
match these revenue reductions. Furthermore, recent contract wins
have required additional, dedicated resource or other bespoke
services which do not utilise our existing cost base.
Results in the reporting period
Net debt and capital expenditure
Net debt (including finance leases) at 30 September 2013 was
GBP74.6m (30 September 2012: GBP78.0m). Capital expenditure net of
disposal proceeds for the period was GBP4.1m (30 September 2012:
GBP4.5m). Capital investment has been focussed on developing
CloudSure UK, Phoenix's new cloud services offering.
Working capital increased by GBP2.5m (30 September 2012:
GBP10.4m). Underlying working capital after adjusting for
non-recurring items increased by GBP2.6m (30 September 2012:
GBP12.4m) as set out in the table below:
Six months Six months Six months Six months
to 30 Sep to 30 Sep to 30 Sep to 30 Sep
2013 2013 2013 2012
Underlying
Statutory Non-recurring Underlying
GBPm GBPm GBPm GBPm
------------------------------------ ----------- --------------- ------------- -------------
Decrease in inventories 3.0 (2.4) 0.6 1.2
Decrease/(increase) in receivables 8.0 (0.6) 7.4 (3.5)
(Decrease) in payables (10.3) 2.9 (7.4) (5.1)
(Decrease) in deferred revenue (3.2) - (3.2) (0.6)
------------------------------------ ----------- --------------- ------------- -------------
(Increase) in working capital (2.5) (0.1) (2.6) (8.0)
------------------------------------ ----------- --------------- ------------- -------------
The decrease in inventories of GBP0.6m (30 September 2012:
GBP1.2m) is stated after the excess inventory write-off (refer to
note 4 of the financial statements). The trade and other
receivables decrease of GBP7.4m (30 September 2012: GBP3.5m
increase) reflects the collection of certain large customer
balances shortly after 31 March 2013 combined with a lower level of
annuity billing during the period. The underlying decrease in
liabilities of GBP7.4m (30 September 2012: GBP5.1m) is primarily
due to timing differences on the payment of supplier invoices.
Dividend and interest payments during the period were GBP3.0m
(30 September 2012: GBP5.4m) and GBP5.0m (30 September 2012:
GBP1.8m) respectively and corporation tax was a GBP1.3m receipt (30
September 2012: GBP1.1m payment). The interest payment includes
GBP2.3m of loan issue costs as a result of the refinancing. The
corporation tax receipt represents the final refund in respect of
the repayments associated with the accounting irregularities
previously reported.
Dividend
The Board has announced the payment of an interim dividend of
1.6p per share (30 September 2012: 3.7p per share), to be paid on 8
January 2014 to shareholders on the register on 6 December
2013.
Non-recurring items
Total non-recurring items during the period were GBP3.6m (30
September 2012: GBP70.0m). A full analysis of non-recurring items
is set out in note 4 and are also summarised in the table
below:
30 30 Sep
Sep 2012
2013
GBPm GBPm
-------------------------------------------------- ------- --------
Impairment of goodwill and of other intangible
assets in the Mid-market CGU - (68.1)
Costs of reorganisation of the Group - Inventory (2.4) -
write-off (a)
Sub-total non-cash items (2.4) (68.1)
Costs of reorganisation of the Group (a) (1.0) (1.1)
Costs relating to the restatement - (0.8)
Sub-total cash items (1.0) (1.9)
Sub-total non-recurring items (3.4) (70.0)
Non-recurring finance costs (b) (0.2) -
Total non-recurring items (3.6) (70.0)
-------------------------------------------------- ------- --------
(a) Included in the total non-recurring items for the year is a
non-cash item of GBP2.4m (30 September 2012: GBPnil) relating to a
write-off of excess inventory held in the Group. During the
reorganisation higher attrition levels led to surplus inventory,
which has now been recorded at its net realisable value where it is
deemed to be lower than cost. Further cash items relating to the
continued reorganisation of the Group of GBP1.0m (30 September
2012: GBP1.1m) were incurred in the period.
(b) On 31 May 2013 the Group successfully refinanced its debt
facilities and repaid its existing facility in advance of its due
date resulting in the write-off of unamortised loan costs of
GBP0.1m (30 September 2012: GBPnil). On 26 June 2013 the Group
terminated a GBP10.0m swap arrangement with an existing lender and
replaced this with a new GBP10.0m swap arrangement with the same
lender. The cost of early termination will be expensed over the
period of the outgoing arrangement resulting in a GBP0.1m (30
September 2012: GBPnil) charge in the period.
During the period ended 30 September 2013 the Group paid a total
of GBP3.6m (30 September 2012: GBP4.3m) in respect of non-recurring
cash items. Of this GBP3.6m, GBP0.4m related to non-recurring cash
items charged in the period ended 30 September 2013 and GBP3.2m
related to non-recurring cash items charged in the year ended 31
March 2013 and previous financial years.
Interest rate swaps
At the beginning of the year the Group had three interest rate
swaps split equally amongst three of its lenders hedging GBP30.0m
until 29 April 2014 and GBP15.0m between 30 April 2014 and 30 April
2016.
On 26 June 2013 the Group entered into an additional GBP10.0m of
interest rate swap contracts with two of its existing lenders to
hedge the risks associated with interest rate fluctuations on
variable rates in respect of its GBP40.0m term loan. The new swap
arrangements, under which the Group receives interest at a variable
rate and pays interest at a fixed rate, hedge an additional GBP5.0m
with each lender from 30 April 2014 to 30 April 2016.
On the same date, the Group also terminated a GBP10.0m swap
arrangement with an existing lender and replaced this with a new
GBP10.0m swap arrangement with the same lender. The new swap
arrangement, under which the Group receives interest at a variable
rate and pays interest at a fixed rate, hedges GBP10.0m from 26
June 2013 to 29 May 2015.
At 30 September 2013, GBP52.0m of the Group's GBP82.0m drawn
facility was subject to a floating rate of interest. The Group
monitors movements in the swap market and has hedged the risk
associated with interest fluctuations on GBP30.0m of the facility.
The amount hedged by interest swap arrangements will reduce by
GBP10.0m to GBP20.0m on 29 May 2015 and the remaining arrangements
are due to expire on 30 April 2016. The weighted average interest
rate on all of the Group's fixed interest rate swap arrangements is
2.5%.
Going concern
The Group currently has committed facilities that consist of a
GBP50.0m revolving credit facility and a GBP40.0m term loan which
run until 30 June 2016 and an uncommitted overdraft facility of
GBP10.0m which is renewable annually in August. The limit on the
revolving credit facility will be reduced by GBP5.0m on 30 November
2014 to GBP45.0m and a further GBP5.0m on 30 November 2015 to
GBP40.0m. The limit on the overdraft, which was undrawn as at 30
September 2013, will be reduced by GBP2.5m to GBP7.5m from 1 April
2014 and by a further GBP2.5m to GBP5.0m from 1 August 2014.
Net debt (including finance leases) was GBP74.6m at 30 September
2013 (30 September 2012: GBP78.0m). At 30 September 2013 the Group
had GBP8.0m (30 September 2012: GBP5.0m) of its total committed
borrowing facilities available. Cash and cash equivalents as at 30
September 2013 was GBP8.5m (30 September 2012: GBP16.0m).
The Directors have reviewed the Group's future cash forecasts
and revenue projections which they believe are based on prudent
market data. Taking into account the level of headroom within the
existing facilities and covenants and the results of sensitivity
testing on the Group's future cash forecasts and revenue
projections, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future and therefore continue to adopt the
going concern basis in preparing the financial statements.
Board
Robin Taylor was appointed as Non-Executive Director and chair
of the Audit Committee with effect from 1 November 2013. David
Warnock stepped down as Non-Executive Director with effect from 30
October 2013. The search for a new Chief Executive Officer is
continuing.
Principal risks and uncertainties
The principal risks and uncertainties faced by the Group have
been reviewed and are expected to remain consistent with those
described on pages 11 and 12 of the 2013 Annual Report and
Accounts. These risks remain as; macroeconomic, loss of key
locations, liquidity, interest rate, credit, competitor, service
delivery, financial control and employee. In addition, the Summary
and outlook section of this statement provides a commentary
concerning the remainder of the current financial year.
Post balance sheet events
After the balance sheet date, and as previously announced on 28
October 2013, the Group received notification from one of its
suppliers of termination of its supply contract to Phoenix. The
Group is currently working to mitigate the effect of this and is
putting in place alternative arrangements to minimise any
disruption to its customers.
Summary and outlook
Whilst our Business Continuity segment continues to deliver a
strong performance and our Mid-market business is starting to show
signs of recovery, this was a challenging time for the Partner
Services business. The difficult economic environment together with
the continued impact of legacy issues has continued to affect
performance and the Board remains cautious in the short term.
Responsibility Statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of
the information required by DTR 4.2.7R (indication of important
events during the first six months and description of principal
risks and uncertainties for the remaining six months of
the year); and
(c) The interim management report includes a fair review of
the information required by DTR 4.2.8R (disclosure of related
party transactions and changes therein).
On behalf of the Board
Peter Bertram
Executive Chairman
27 November 2013
Consolidated Statement of Income
for the six months ended 30 September 2013
Unaudited six months to Unaudited six months
30 September 2013 to 30 September 2012
Amortisation
& non-
Before Amortisation Before recurring
amortisation & non-recurring amortisation items
& non-recurring items & non-recurring (note
items (note 4) Total items 4) Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Revenue 3 116.9 - 116.9 124.0 - 124.0
Profit/(loss) from
operations before
amortisation
of
intangibles 7.7 (3.4) 4.3 9.9 (70.0) (60.1)
Amortisation of
intangibles - (0.5) (0.5) - (1.1) (1.1)
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Profit/(loss) from
operations 5 7.7 (3.9) 3.8 9.9 (71.1) (61.2)
Finance costs 6 (2.4) (0.2) (2.6) (2.1) - (2.1)
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Profit/(loss) before
tax 5.3 (4.1) 1.2 7.8 (71.1) (63.3)
Tax 7 (1.2) 0.9 (0.3) (1.8) 1.9 0.1
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Profit/(loss) for
the
period 4.1 (3.2) 0.9 6.0 (69.2) (63.2)
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Earnings/(loss) per
share
Basic 8 5.4p 1.2p 7.9p (83.9p)
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Diluted 8 5.2p 1.2p 7.6p (83.9p)
--------------------- ----- ----------------- ----------------- ------ ----------------- ------------- --------
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2013
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
-------------------------------------------------- -------------- --------------
Profit/(loss) for the period 0.9 (63.2)
--------------------------------------------------- -------------- --------------
Items that will not be reclassified subsequently
to profit or loss:
Movement in post-retirement scheme (0.8) (1.2)
Tax on items that will not be reclassified
subsequently - 0.3
--------------------------------------------------- -------------- --------------
(0.8) (0.9)
Items that may be reclassified subsequently
to profit or loss:
Gain/(loss) arising in respect of cash flow
hedges 0.4 (0.2)
0.4 (0.2)
Other comprehensive expenditure for the period,
net of tax (0.4) (1.1)
Total comprehensive income/(expenditure) for
the period 0.5 (64.3)
--------------------------------------------------- -------------- --------------
Consolidated Balance Sheet
as at 30 September 2013
Unaudited Audited
30 September 31 March
2013 2013
Note GBPm GBPm
-------------------------------------- ----- -------------- ----------
Non-current assets
Goodwill 114.2 114.2
Intangible assets 1.8 2.3
Property, plant and equipment 10 58.6 59.0
174.6 175.5
-------------------------------------- ----- -------------- ----------
Current assets
Inventories 7.6 10.6
Trade and other receivables 54.8 62.8
Current tax assets 0.6 2.2
Deferred tax assets 0.9 0.9
Cash and cash equivalents 8.5 16.0
-------------------------------------- ----- -------------- ----------
72.4 92.5
Assets held for sale 11 1.0 1.0
-------------------------------------- ----- -------------- ----------
73.4 93.5
-------------------------------------- ----- -------------- ----------
Total assets 248.0 269.0
-------------------------------------- ----- -------------- ----------
Current liabilities
Trade and other payables (38.7) (47.4)
Obligations under finance leases and
hire purchase contracts (1.4) (1.4)
Other loans 12 - (0.4)
Provisions (2.7) (4.0)
Deferred revenue (48.5) (51.3)
-------------------------------------- ----- -------------- ----------
(91.3) (104.5)
-------------------------------------- ----- -------------- ----------
Net current liabilities (17.9) (11.0)
-------------------------------------- ----- -------------- ----------
Non-current liabilities
Obligations under finance leases and
hire purchase contracts (1.8) (0.7)
Bank loans 12 (79.9) (84.8)
Provisions (7.2) (8.1)
Derivative financial instruments 11 (1.1) (1.4)
Deferred revenue (1.4) (1.8)
Other non-current liabilities (4.7) (5.1)
Retirement benefit obligations 13 - -
(96.1) (101.9)
-------------------------------------- ----- -------------- ----------
Total liabilities (187.4) (206.4)
-------------------------------------- ----- -------------- ----------
Net assets 60.6 62.6
-------------------------------------- ----- -------------- ----------
Equity
Share capital 0.8 0.8
Share premium account 37.7 37.6
Merger reserve 57.5 57.5
Other reserves 2.3 1.5
Accumulated losses (37.7) (34.8)
-------------------------------------- ----- -------------- ----------
Total equity 60.6 62.6
-------------------------------------- ----- -------------- ----------
The financial statements were approved by the Board of Directors
and authorised for issue on 27 November 2013.
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2013
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share Merger Other Accumulated Total
capital premium reserve reserves losses equity
account
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Balance at 1 April 2013 0.8 37.6 57.5 1.5 (34.8) 62.6
----------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Profit for the period - - - - 0.9 0.9
Gain recognised on cash
flow hedge - - - 0.4 - 0.4
Movement in post-retirement
scheme - - - - (0.8) (0.8)
Total comprehensive income
for the period ended 30
September 2013 - - - 0.4 0.1 0.5
----------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Exercise of share options - 0.1 - - - 0.1
Share option expense - - - 0.4 - 0.4
Dividends (note 9) - - - - (3.0) (3.0)
Total transactions with
owners - 0.1 - 0.4 (3.0) (2.5)
----------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Balance at 30 September
2013 0.8 37.7 57.5 2.3 (37.7) 60.6
----------------------------- ---------- ---------- ---------- ---------- ------------- ----------
for the six months ended 30 September 2012
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share Merger Other Accumulated Total
capital premium reserve reserves losses equity
account
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Balance at 1 April 2012 0.8 37.6 57.5 1.5 33.6 131.0
Loss for the period - - - - (63.2) (63.2)
Loss recognised on cash
flow hedge - - - (0.2) - (0.2)
Movement in post-retirement
scheme - - - - (1.2) (1.2)
Tax on items taken directly
to equity - - - - 0.3 0.3
Total comprehensive expenditure
for the period ended 30
September 2012 - - - (0.2) (64.1) (64.3)
--------------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Share option expense - - - 0.4 - 0.4
Dividends (note 9) - - - - (5.4) (5.4)
Total transactions with
owners - - - 0.4 (5.4) (5.0)
--------------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Balance at 30 September
2012 0.8 37.6 57.5 1.7 (35.9) 61.7
--------------------------------- ---------- ---------- ---------- ---------- ------------- ----------
Consolidated Cash Flow Statement
for the six months ended 30 September 2013
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
Note GBPm GBPm
-------------------------------------------- ----- -------------- --------------
Net cash from operating activities 14 4.0 0.9
Investing activities
Purchases of property, plant and equipment (4.1) (5.2)
Proceeds on disposal of asset held
for sale - 0.7
Net cash used in investing activities (4.1) (4.5)
-------------------------------------------- ----- -------------- --------------
Financing activities
Dividends paid (3.0) (5.4)
Repayment of obligations under finance leases
and hire purchase contracts (1.1) (1.2)
Repayment of revolving credit facility (90.0) -
New term loan raised 40.0 -
New revolving credit facility raised 50.0 -
Net (repayment)/drawdown on revolving credit
facility (3.0) 5.0
New other loan raised - 1.0
Repayment of other loan (0.4) -
Issue of share capital 0.1 -
Net cash used in financing activities (7.4) (0.6)
-------------------------------------------- ----- -------------- --------------
Net decrease in cash and cash equivalents 15 (7.5) (4.2)
Cash and cash equivalents at beginning
of period 16.0 15.2
-------------------------------------------- ----- -------------- --------------
Cash and cash equivalents at end of
period 8.5 11.0
-------------------------------------------- ----- -------------- --------------
Notes to the Consolidated Financial Statements
for the six months ended 30 September 2013
1. Preparation of the interim financial information
The interim financial report for the half year ended 30
September 2013 has been prepared in accordance with the Disclosure
and Transparency Rules of the Financial Conduct Authority and with
IAS 34 Interim Financial Reporting. This report should be read in
conjunction with the annual financial statements for the year ended
31 March 2013, which have been prepared in accordance with IFRSs
(as adopted by the European Union).
The half year results are unaudited and were approved by the
Board of Directors on 27 November 2013.
The interim financial information does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A
copy of the statutory accounts for the year ended 31 March 2013 has
been delivered to the Registrar of Companies. The Auditor's report
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section
498 (2) or (3) of the Companies Act 2006.
Going concern is discussed in the interim review. The Directors
have reviewed the Group's future cash forecasts and revenue
projections which they believe are based on prudent market data.
Based on this assessment and the level of headroom within the
existing facilities and covenants, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they
adopt the going concern basis in preparing the interim financial
statements.
2. Accounting policies
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31 March 2013,
except as described below.
The following new standards, amendments to standards or
interpretations are mandatory for the first time for the year
ending 31 March 2014 and have been adopted in this interim
financial report:
-- IAS 1 Presentation of financial statements (amended) -
amended to revise the way other comprehensive income is presented
to distinguish between those items that may be reclassified (or
recycled) to profit or loss at a future point in time and those
items that will never be reclassified. The amendment affected
presentation only and had no impact on the Group's financial
position or performance. IAS 1 has also been amended to clarify the
requirements for comparative information; this has not had an
impact on the Group's financial statements.
-- IAS 16 Property, plant and equipment (amended) - amended to
clarify the treatment of major spare parts and servicing equipment,
this change has not had an effect on the Group's financial
statements.
-- IAS 19 Employee benefits (revised) - revised to provide a
clearer indication of an entity's obligations resulting from the
provision of defined benefit plans and how those obligations will
affect its financial position, financial performance and cash flow.
The revision includes:
-- The replacement of the expected return on pension plan assets
and interest expense on pension plan liabilities with a single net
interest component calculated on the net defined benefit liability
or asset using the discount rate used to determine the defined
benefit obligation; and
-- Additional disclosures to explain the characteristics of a
company's defined benefit plans, the amounts recognised in the
financial statements and the risk arising from these plans.
The revision requires retrospective adoption but as the effect
on the net interest cost and other comprehensive income for the
period ended 30 September 2012 is not material, the comparative
figures have not been restated. The finance cost disclosure has
been restated to net the GBP0.6m interest cost on the defined
pension scheme liabilities against the GBP0.6m investment income
relating to the expected return on defined benefit pension scheme
assets for the period ended 30 September 2012 under a new heading
called net interest on defined benefit liabilities.
-- IAS 32 Financial instruments: Presentation (amended) -
amended to clarify that income taxes arising from distributions to
equity holders are accounted for in accordance with IAS 12 Income
Taxes. This change has not had a material impact on the Group's
financial statements.
-- IAS 34 Interim financial reporting (amended) - amended to
clarify the requirements relating to segment information for total
assets and liabilities for each reportable segment to enhance
consistency with the requirements in IFRS 8 Operating Segments.
This has not had an effect on the Group's operating segments
disclosed in the Interim Report.
-- IFRS 7 Financial instruments: Disclosures (amended) - amended
to enhance the disclosures required relating to the offsetting of
assets and liabilities. This change has not had a material impact
on the Group's financial statements.
-- IFRS 13 Fair value measurement - aims to improve consistency
and reduce complexity by providing a precise definition of fair
value and a single source of fair value measurement and disclosure
requirements for use across IFRSs. The introduction of the standard
has not had a material impact on the Group's financial position or
performance. IFRS 13 also requires additional disclosures at the
interim period which have been incorporated into IAS 34. These
disclosures are given in note 11.
At the date of authorisation of these financial statements,
certain new standards, interpretations and amendments to existing
standards are not yet effective and have not been early adopted by
the Group. Those of which are considered relevant to the Group's
operations are as follows:
Separate financial statements
* IAS 27
(previously IAS 27 'Consolidated and separate financial 1 January
statements') 2014
Financial instruments presentation
* IAS 32
Amendments relating to the offsetting of assets 1 January
and liabilities 2014
Impairment of assets (amended) 1 January
* IAS 36 2014
Financial instruments: Recognition and measurement 1 January
* IAS 39 (amended) 2014
Financial instruments: Disclosures 1 January
* IFRS 7 2015
Financial instruments (amended) 1 January
* IFRS 9 2015
Consolidated financial statements 1 January
* IFRS 10 2014
The adoption of these standards is not expected to have a
material impact on the reported results or financial
statements.
3. Segmental reporting
The Board, which is considered to be the Chief Operating
Decision Maker, has determined its operating segments by business
line, based on the Group's management and internal reporting
structure.
The Group's operations are based entirely in the UK. The Group
has no significant concentration of sales to a particular
individual external customer.
Principal activities are as follows:
Business Continuity Provision of business continuity and IT disaster recovery services
Mid-market Provision of information technology services and systems
Partner Services Provision of information technology services,
networking support and infrastructure services
Segment results include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis.
Corporate costs relate to central Group costs, including finance,
legal and employee costs that are not directly attributable to the
operating segments.
Inter-segment revenue has been eliminated.
Revenue Profit/(loss)
Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months
ended 30 ended 30 ended 30 ended 30
September September September September
2013 2012 2013 2012
GBPm GBPm GBPm GBPm
------------------------------- ----------- ----------- ----------- -----------
Business Continuity 26.6 27.6 6.6 8.0
Mid-market 35.4 42.7 (1.2) (2.6)
Partner services 54.9 53.7 3.7 5.8
Corporate - (1.4) (1.3)
------------------------------- ----------- ----------- ----------- -----------
116.9 124.0 7.7 9.9
------------------------------- ----------- ----------- ----------- -----------
Amortisation of intangibles (0.5) (1.1)
Non-recurring (3.4) (70.0)
----------- -----------
Profit/(loss) from operations 3.8 (61.2)
Finance costs (2.6) (2.1)
----------- -----------
Profit/(loss) before tax 1.2 (63.3)
------------------------------- ----------- ----------- ----------- -----------
4. Non-recurring items
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
------------------------------------------------ -------------- --------------
Non-recurring items included in profit/(loss)
from operations:
Impairment of goodwill (a) - (67.2)
Impairment of intangible assets (a) - (0.9)
Costs of reorganisation of the Group (b) (3.4) (1.1)
Professional fees relating to the restatement
(c) - (0.8)
(3.4) (70.0)
Non-recurring items included in finance costs:
Refinancing finance costs (d) (0.2) -
(0.2) -
------------------------------------------------ -------------- --------------
(3.6) (70.0)
------------------------------------------------ -------------- --------------
Non-recurring items are items of income or expenditure that, in
management's judgement, should be disclosed separately on the basis
that they are material, either by their nature or their size.
Non-recurring items in the current and comparative periods
comprise:
(a) At 30 September 2012 there was an indication of impairment
due to the accounting irregularities uncovered within the
Mid-market business. This resulted in the reduction of the
estimated future cash flows for this CGU to such an extent that the
carrying value of its assets was greater than the recoverable
amount. Consequently, a non-cash impairment charge of GBP68.1m was
recognised, GBP67.2m related to goodwill and GBP0.9m related to
other intangible assets.
(b) Included in costs of reorganisation of the Group is GBP2.4m
relating to a write-off of excess inventory held in the Group.
During the reorganisation higher attrition levels led to surplus
inventory, which has now been recorded at its net realisable value
where it is deemed to be lower than cost. Further items relating to
the continued reorganisation of the Group of GBP1.0m (30 September
2012: GBP1.1m) were incurred in the period.
(c) Professional fees charged in relation to the independent
forensic investigation following the accounting irregularities
uncovered were GBP0.8m for the period ended 30 September 2012; no
further costs have been incurred for the period ended 30 September
2013.
(d) On 31 May 2013, the Group successfully refinanced its bank
facilities with its existing lenders. Un-amortised loan costs of
GBP0.1m and break costs of GBP0.1m have been incurred for the
period ended 30 September 2013 (30 September 2012: GBPnil).
5. Profit/(loss) from operations
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
------------------------------------------ -------------- --------------
Revenue 116.9 124.0
Raw materials and consumables (2.7) (3.6)
Staff costs (47.5) (44.8)
Depreciation (6.3) (6.6)
Amortisation of intangibles (0.5) (1.1)
Impairment of goodwill (note 4) - (67.2)
Impairment of intangible assets (note 4) - (0.9)
Inventory write-off (note 4) (2.4) -
Other operating charges (53.7) (61.0)
------------------------------------------ -------------- --------------
3.8 (61.2)
------------------------------------------ -------------- --------------
6. Finance costs
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
--------------------------------------------------- --------------- ---------------
Finance costs:
Interest on bank overdraft and loans (2.0) (1.6)
Interest on obligations under finance leases
and hire purchase contracts (0.1) (0.1)
Amortisation of loan issue costs (0.3) (0.3)
Other interest (0.1) (0.1)
Less: amounts included in the cost of qualifying 0.1 -
assets
Total interest expense excluding non-recurring
items (2.4) (2.1)
Non-recurring finance costs:
Refinancing finance costs (note 4) (0.2) -
(0.2) -
--------------------------------------------------- --------------- ---------------
Total finance costs (2.6) (2.1)
--------------------------------------------------- --------------- ---------------
The 'IAS 19 Employee benefits' amendment requires retrospective
adoption. As a result, the finance cost disclosure has been amended
to net the GBP0.6m interest cost on the defined benefit pension
scheme liabilities against the GBP0.6m investment income related to
the expected return on defined benefit pension scheme assets for
the period ended 30 September 2012. The net interest on defined
benefit liabilities for the period ended 30 September 2013 is
GBPnil (30 September 2012: GBPnil).
7. Taxation
The Group tax charge represents a tax rate of 23.3% (30
September 2012: tax credit of GBP0.1m representing an effective
rate of 0.1%). This is based on the forecast annual effective rate
applied to profit before tax for the period and takes into account
the impact of the enactment of the Finance Act 2013, which includes
a reduction in the rate of Corporation Tax from 23% to 21% from 1
April 2014 and 20% from 1 April 2015.
8. Earnings per share
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
Adjusted earnings per share excluding amortisation
of acquired intangibles and non-recurring items
Basic 5.4p 7.9p
---------------------------------------------------- -------------- --------------
Diluted 5.2p 7.6p
---------------------------------------------------- -------------- --------------
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings
GBPm GBPm
------------------------------------------------------ -------- ---------
Earnings for the purposes of basic earnings
per share and diluted earnings per share being
net profit/(loss) attributable to equity holders
of the parent 0.9 (63.2)
Amortisation of acquired intangibles 0.5 1.1
Non-recurring items 3.6 70.0
Tax on amortisation of acquired intangibles
and non-recurring items (0.9) (1.9)
------------------------------------------------------ -------- ---------
Earnings for the purposes of adjusted earnings
per share being net profit attributable to
equity holders of the parent excluding amortisation
of acquired intangibles and non-recurring items 4.1 6.0
------------------------------------------------------ -------- ---------
Number of shares
Number Number
m m
------------------------------------------------- ------- -------
Weighted average number of Ordinary Shares
for the purposes of basic earnings per share 75.4 75.4
Effect of dilutive potential Ordinary Shares:
Share options 2.8 3.3
------------------------------------------------- ------- -------
Weighted average number of Ordinary Shares
for the purposes of diluted earnings per share 78.2 78.7
------------------------------------------------- ------- -------
9. Dividends
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
----------------------------------------------------- -------------- --------------
Amounts recognised as distributions to Shareholders
in the period:
Final dividend for the year ended 31 March
2013 of 4.0p (2012: 7.2p) per share 3.0 5.4
----------------------------------------------------- -------------- --------------
Proposed interim dividend for the year ended
31 March 2014 of 1.6p (2013: 3.7p) per share 1.2 2.8
----------------------------------------------------- -------------- --------------
The final dividend was approved at the Annual General Meeting on
1 August 2013.
The proposed interim dividend was recommended by the Board on 26
November 2013 and will be paid on 8 January 2014.
10. Capital expenditure
Additions to property, plant and equipment in the period were
GBP6.1m (30 September 2012: GBP5.1m), of which GBP2.2m were
financed by new finance leases (30 September 2012: GBP0.2m). There
were no significant disposals of property, plant and equipment
during the period (30 September 2012: GBPnil).
11. Fair value measurements
Recurring fair value measurements
Unaudited Audited
30 September 31 March
2013 2013
Liability Liability
Fair Notional Fair value Notional
value
GBPm GBPm GBPm GBPm
---------------------------------- ------- --------- ----------- ---------
Derivative financial instruments
Interest rate swaps 1.1 30.0 1.4 30.0
---------------------------------- ------- --------- ----------- ---------
At the beginning of the year the Group had three interest rate
swaps split equally amongst three of its lenders, hedging GBP30.0m
until 29 April 2014 and GBP15.0m between 30 April 2014 and 30 April
2016.
On 26 June 2013 the Group entered into additional GBP10.0m
interest rate swap contracts with two of its existing lenders to
hedge the risks associated with interest rate fluctuations on
variable rates in respect of its GBP40.0m term loan. The new swap
arrangements, under which the Group receives interest at a variable
rate and pays interest at a fixed rate, hedge an additional GBP5.0m
with each lender from 30 April 2014 to 30 April 2016.
On the same date, the Group also terminated a GBP10.0m swap
arrangement with an existing lender and replaced this with a new
GBP10.0m swap arrangement with the same lender. The new swap
arrangement, under which the Group receives interest at a variable
rate and pays interest at a fixed rate, hedges GBP10.0m from 26
June 2013 to 29 May 2015.
At 30 September 2013, GBP52.0m of the Group's borrowings were
subject to a floating rate of interest. The Group monitors
movements in the swap market and has hedged the risk associated
with interest fluctuations on GBP30.0m of the term loan. The amount
hedged by interest swap arrangements will reduce by GBP10.0m to
GBP20.0m on 29 May 2015 and the remaining arrangements are due to
expire on 30 June 2016. The weighted average interest rate on all
of the Group's fixed interest rate swap arrangements is 2.462% (30
September 2012: 2.665%).
The Group has recognised a GBP0.1m non-recurring expense as a
result of terminating its existing interest rate swap contract.
The interest rate swaps are designated as cash flow hedges and
are classified as level 2 in the fair value hierarchy. They are
valued using the hypothetical derivative technique which
incorporates observable market interest rates.
Non-recurring fair value measurements
Assets held for sale of GBP1.0m (31 March 2013: GBP1.0m) consist
of properties held in the Mid-market services division. They are
measured at fair value less costs to sell in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations
because the assets' fair value less costs to sell are lower than
their carrying amount.
The assets held for sale are classified as level 2 in the fair
value hierarchy. The market approach has been used to value the
properties by observing prices for similar properties.
12. Bank and other loans
The following table analyses bank and other borrowings,
excluding bank overdrafts:
Unaudited Audited
30 September 31 March
2013 2013
GBPm GBPm
------------------ -------------- ----------
Current:
Other loans - 0.4
Non-current:
Bank loans 79.9 84.8
------------------ -------------- ----------
Total borrowings 79.9 85.2
------------------ -------------- ----------
The Group refinanced its facilities on 31 May 2013 and entered
into a GBP40.0m term loan and a GBP50.0m revolving credit facility
with its existing lenders; Barclays Bank plc, HSBC Bank plc, The
Royal Bank of Scotland plc and Clydesdale Bank plc. The limit on
the revolving credit facility will be reduced by GBP5.0m on 30
November 2014 to GBP45.0m and a further GBP5.0m on 30 November 2015
taking the facility to GBP40.0m. The term loan and remaining
GBP40.0m on the revolving credit facility is due for repayment in
full in June 2016. Interest is charged at LIBOR plus margin, where
the margin is dependent upon the Group's net debt: EBITDA ratio
ranging from 2.85 to 3.95%.
13. Retirement benefit obligations
The Group has not recognised the IAS 19 surplus of GBP2.5m (31
March 2013: GBP1.8m) as the present value of the economic benefits
available on a reduction of future contributions is GBPnil (31
March 2013: GBPnil).
14. Notes to the cash flow statement
Unaudited Unaudited
six months to six months
30 September to
2013 30 September
2012
GBPm GBPm
------------------------------------------ --------------- --------------
Profit/(loss) from operations 3.8 (61.2)
Adjustments for:
Depreciation of property, plant and
equipment 6.3 6.6
Impairment of goodwill (note 4) - 67.2
Impairment of intangibles (note 4) - 0.9
Amortisation of acquired intangibles 0.5 1.1
Share option costs 0.4 0.4
Retirement benefit - difference between
contribution and amount charged (0.8) (0.8)
Operating cash flows before movements
in working capital 10.2 14.2
Decrease in inventories 3.0 1.2
Decrease/(increase) in receivables 8.0 (3.5)
Decrease in payables (10.3) (7.5)
Decrease in deferred revenue (3.2) (0.6)
----------------------------------------- --------------- --------------
Cash generated by operations 7.7 3.8
Income taxes received/(paid) 1.3 (1.1)
Interest paid (5.0) (1.8)
------------------------------------------ --------------- --------------
Net cash from operating activities 4.0 0.9
------------------------------------------ --------------- --------------
Included within interest paid was GBP2.3m (30 September 2012:
GBPnil) relating to loan issue costs incurred in order to refinance
the Group's debt facilities and GBP0.3m (30 September 2012: GBPnil)
as a result of the increased margin payable on the banking facility
following the accounting irregularities and subsequent
restatement.
15. Reconciliation of net borrowings
Unaudited Unaudited
six months six months
to to
30 September 30 September
2013 2012
GBPm GBPm
---------------------------------------------- -------------- --------------
Decrease in cash and cash equivalents during
the period (7.5) (4.2)
Movement in borrowings 4.2 (5.0)
Movement in net borrowings during the period (3.3) (9.2)
Net borrowings brought forward (71.3) (68.8)
---------------------------------------------- -------------- --------------
Net borrowings carried forward (74.6) (78.0)
---------------------------------------------- -------------- --------------
Cash and cash equivalents 8.5 11.0
Other current borrowings (1.4) (3.3)
Non-current borrowings (81.7) (85.7)
---------------------------------------------- -------------- --------------
Net borrowings carried forward (74.6) (78.0)
---------------------------------------------- -------------- --------------
16. Contingent liabilities
Provision is made for the Directors' best estimate of all known
legal claims and all legal actions in progress. The Group takes
legal advice as to the likelihood of success of claims and actions
and no provision is made where the Directors consider, based on
advice, that the action is unlikely to succeed or a sufficiently
reliable estimate of the potential obligation cannot be made. The
Group has no material claims or actions as at 30 September 2013 (31
March 2013: GBPnil), other than an outstanding potential claim
relating to the previous period which the Board believe is fully
covered by insurance.
17. Related party transactions
There have been no related party transactions, other than
transactions between the Company and its subsidiaries which have
been eliminated on consolidation and remuneration to key
management. Therefore, there have been no changes in the related
party transactions described in the Phoenix IT Group plc Annual
Report and Accounts for the year ended 31 March 2013.
18. Post balance sheet events
After the balance sheet date, and as previously announced on 28
October 2013, the Group received notification from one of its
suppliers of termination of its supply contract to Phoenix. The
Group is currently working to mitigate the effect of this and is
putting in place alternative arrangements to minimise any
disruption to its customers.
INDEPENDENT REVIEW REPORT TO PHOENIX IT GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2013, which comprises the
Consolidated Statement of Income, the Consolidated Statement of
Comprehensive Income, the Consolidated Balance Sheet, the
Consolidated Statement of Changes in Equity, the Consolidated Cash
Flow Statement and related notes. We have read the other
information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, "Interim
Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. This report, including the
conclusion, has been prepared for and only for the Company for the
purpose of the Disclosure and Transparency Rules of the Financial
Conduct Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2013 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
Milton Keynes
27 November 2013
Notes:
(a) The maintenance and integrity of the Phoenix IT Group plc
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Advisers and shareholder information
Phoenix IT Group plc Principal Bankers
Registered In England 03476115 Royal Bank of Scotland
152 Silbury Boulevard
Registered Office Milton Keynes
Lakeside House MK9 1LT
The Lakes
Bedford Road Solicitors
Northampton Nabarro LLP
NN4 7HD Lacon House
84 Theobalds Road
Financial Advisers & Stockbrokers London
Investec Investment Banking WC1X 8RW
2 Gresham Street
London Financial Public Relations
EC2V 7QP FTI Consulting
Holborn Gate
Numis Securities Limited 26 Southampton Buildings
The London Stock Exchange Building London
10 Paternoster Square WC2A 1PB
London
EC4M 7LT Remuneration Consultants
New Bridge Street
Independent Auditors (an Aon plc company)
PricewaterhouseCoopers LLP 6 More London Place
Chartered Accountants and Statutory London
Auditors
Exchange House SE1 2DA
Central Business Exchange
Midsummer Boulevard
Central Milton Keynes
MK9 2DF
Registrars
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Financial calendar
Ex dividend date 4 December 2013
Record date for dividend 6 December 2013
Dividend payment date 8 January 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KDLFLXFFEFBD
Phoenix It (LSE:PNX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Phoenix It (LSE:PNX)
Historical Stock Chart
From Jul 2023 to Jul 2024
