TIDMDGB
RNS Number : 2283W
Digital Barriers plc
16 November 2010
16 November 2010
Digital Barriers plc
("Digital Barriers" or the "Company")
Interim Results for the seven months ending 30 September 2010
Digital Barriers plc (LSE AIM: DGB), the specialist provider of products and
services to the homeland security market, announces unaudited results for the
seven months ending 30 September 2010.
Key Highlights
· Successful AIM IPO in March 2010, raising GBP20.0 million before expenses
· Strong early progress made towards our strategic aim of building a
leading specialist in the homeland security sector
· Four acquisitions in the Surveillance, Imaging and Recognition area
completed to-date, three in the period, with integration of these businesses now
well underway
· Office established in Singapore
· Strategy validated by ongoing international terrorist activity and
counter-terrorism response, and by UK budget announcements
Commenting on the results Dr Tom Black, Executive Chairman of Digital Barriers
plc said:
"I am pleased with the progress that Digital Barriers has made since its IPO in
March. We came to market with a plan to build a new leading player in the
homeland security market and we have wasted no time in getting to work.
Homeland security remains a large, growing and dynamic global market place.
Whilst these are still early days, I believe that the four acquisitions we have
made so far this year create a solid base on which we can continue to extend the
scope and capabilities of our business in the months and years ahead."
For further information please contact:
+-----------------------------------+---------------+
| Digital Barriers plc | +44 (0)20 |
| | 7940 4740 |
+-----------------------------------+---------------+
| Tom Black, Executive Chairman | |
+-----------------------------------+---------------+
| Colin Evans, Managing Director | |
| | |
+-----------------------------------+---------------+
| | |
+-----------------------------------+---------------+
| Investec Investment Banking | +44 (0)20 |
| | 7597 5970 |
+-----------------------------------+---------------+
| Andrew Pinder | |
| | |
+-----------------------------------+---------------+
| | |
+-----------------------------------+---------------+
| Financial Dynamics | +44 (0)20 |
| | 7831 3113 |
+-----------------------------------+---------------+
| Edward Bridges / Matt Dixon | |
+-----------------------------------+---------------+
About Digital Barriers plc:
Founded by the leadership team behind Detica Group plc, Digital Barriers is
focused on the provision of specialist products and services to the
international homeland security market, where counter-terrorism, the protection
of critical computer systems and networks, and support for counter-insurgency
operations overseas represent a compelling commercial opportunity. Over time,
the Company aims to become a leading specialist, working directly with
end-customers and through key partner organisations, providing focused,
proportionate and effective solutions across the Secure Government, Border
Protection, Defence, Transportation, Energy and Utilities sectors, as well as
with organisations responsible for safeguarding crowded public spaces and
nationally symbolic locations.
www.digitalbarriers.com
Chairman's Statement
Introduction
Digital Barriers was established earlier this year to provide specialist
products and services to the international homeland security market, which is
assessed to be approximately $140 billion a year and growing1. The global
security context has evolved in recent years, with the most significant threats
now coming from international terrorism against civilian targets, attacks on
high-profile computer systems, and asymmetric military operations overseas. This
market represents a compelling opportunity to develop a leading international
business, working directly with end-customers and through key partner
organisations.
Since our IPO on AIM in March this year, these evolving threats have continued
to dominate the headlines, with terrorist and cyber attacks against high-profile
targets in different countries around the world. In our domestic market, this
has resulted in the UK's National Security Strategy, and in budget commitments
for counter-terrorism and new funding for cyber security as set out in the
Defence and Security Review and the Comprehensive Spending Review. The incoming
UK Government is also strongly supporting the export of leading technology and
capabilities through UK Trade and Investment initiatives. This has the potential
to benefit Digital Barriers as we engage with potential customers in key markets
around the world where we have already identified significant demand for
specialist homeland security products and services.
1 Source: Visiongain: 'Global Homeland Security 2009-2019', June 2009
Our strategy
Digital Barriers' strategy is to combine consulting and system integration
services with IP-rich solutions that address specific client requirements across
the international homeland security and defence sectors. We focus on
counter-terrorism, cyber security and specialist areas of defence, helping our
clients select, design and deploy effective and proportionate solutions to
enhance the physical and electronic security of high profile, high value
targets.
Digital Barriers provides consulting services, integration services and
specialist solutions. We work directly with government departments and
commercial organisations, and also through prime system integration partners.
Our consultants, operational security practitioners, technologists and systems
engineers are adept at complex problem solving, and have often played a leading
role on national-level programmes.
Our plan is to work with clients around the world through hub offices in key
locations, the first of which has been established in Singapore. Through our
acquisitions, we have international reference installations that enable us to
transfer capabilities and experiences from complex security programmes,
including major international airports, large metropolitan transportation
networks and high-security government locations.
Progress in period
We have made good progress since raising GBP20 million through our IPO. In
particular, we have:
· acquired four businesses, three in the period, which have secured key,
referenceable UK and overseas client relationships and an office in Singapore,
· established a central sales function to extend the reach of the
capabilities we acquire and to manage relationships with key partner
organisations, this function also manages our relationships with key strategic
advisers,
· put in place a central services function to focus on strategy, programme
delivery, acquisition and integration, and financial governance,
· invested in an organic consulting and pre-sales service through the
hiring of subject matter experts and the development of specific offerings, and,
· taken steps towards establishing the embryonic Digital Barriers brand as
a premium player in the mid-market sector.
Financials
These interim results reflect the phased acquisitions by the Company during the
period and ongoing central costs. As such, they are not representative of the
current trading performance of the Company.
Revenues in the period were GBP1.32 million. We recorded an adjusted loss before
tax of GBP1.18 million, after adding back amortisation of acquired intangibles
of GBP0.15 million, IPO costs of GBP0.19 million, and acquisition costs of
GBP0.5 million. Consideration for acquisitions in the period totalled GBP9.22
million, with GBP8.52 million of this paid in cash in the period. The cash
balance at the end of the period was GBP13.95 million, before the acquisition of
Waterfall Solutions Limited in October 2010.
Acquisitions
· Security Applications Limited (trading as DFA), acquired in March 2010, a
specialist installer and integrator of thermal imaging for high-profile targets.
· Overtis Solutions (now trading as Integration Services), acquired in July
2010, a specialist provider of integrated security solutions for the protection
of high-value assets.
· COE Group plc, acquired in September 2010, an innovative provider of
high-end video surveillance products and solutions for complex operating
environments across the homeland security market.
· Waterfall Solutions Limited, acquired after the period-end in October
2010, a specialist in advanced image processing and data and image fusion for
defence and homeland security.
Integration of these businesses under the Digital Barriers brand and operating
model is now well underway.
Outlook
We see the opportunity for Digital Barriers as very compelling over the medium
to long term. To capitalise on this, we intend to acquire additional
capabilities, establish regional overseas hubs for our services and solutions,
build our central sales and services functions, and develop strong relationships
with key partner organisations.
Given the current global preoccupation with counter-terrorism and cyber
security, we believe that our strategy has been validated during our first few
months of operation, and that our access to clients, to potential acquisition
targets, and to high-quality people will enable us to execute it successfully.
We anticipate making further strategic acquisitions to secure technologies and
capabilities that fall within our areas of focus; primarily businesses with
revenues of up to GBP10 million. In parallel, we will integrate our
acquisitions, continue to develop our UK and Singapore locations, and establish
the demand for our services and capabilities in the US and the Middle East.
It is important that we continue to develop the Digital Barriers brand in the
minds of our clients and partners to ensure that we become a globally recognised
and respected homeland security and defence specialist. We are pleased with the
progress made since our IPO, and remain confident about the prospects for
developing the Company as a leading specialist over the coming years.
DIGITAL BARRIERS PLC
Consolidated Statement of Comprehensive Income
for the seven months ended 30 September 2010
+----------------------------------------+------+-+-----------+
| | | | 7 |
| | | | Months |
| | | | ended |
+----------------------------------------+------+-+-----------+
| | | | 30 Sept |
| | | | 10 |
+----------------------------------------+------+-+-----------+
| | | | Unaudited |
+----------------------------------------+------+-+-----------+
| |Note | | GBP'000 |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Revenue | 2 | | 1,322 |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Cost of sales | | | (901) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Gross profit | | | 421 |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Administration costs | | | (2,425) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Operating Loss | | | (2,004) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Finance Revenue | | | 44 |
+----------------------------------------+------+-+-----------+
| Finance Costs | | | (60) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Loss before Tax | | | (2,020) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Income Tax | 4 | | 27 |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Loss for the Period | | | (1,993) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Adjusted loss: | 3 | | |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Loss before Tax | | | (2,020) |
+----------------------------------------+------+-+-----------+
| Amortisation of acquired intangibles | | | 151 |
+----------------------------------------+------+-+-----------+
| IPO and deal costs | | | 685 |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Adjusted loss for the period | | | (1,184) |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| | | | |
+----------------------------------------+------+-+-----------+
| Loss per share - basic (pence) | 5 | | 0.0898 |
+----------------------------------------+------+-+-----------+
| Loss per share - diluted (pence) | 5 | | 0.0898 |
+----------------------------------------+------+-+-----------+
| Loss per share - adjusted (pence) | 5 | | 0.0534 |
+----------------------------------------+------+-+-----------+
| Loss per share - adjusted diluted | 5 | | 0.0534 |
| (pence) | | | |
+----------------------------------------+------+-+-----------+
The results for the period are derived from continuing activities
DIGITAL BARRIERS PLC
Consolidated Balance Sheet
at 30 September 2010
+----------------------------------------+------+----------+-----------+
| | | | 30 Sept |
| | | | 10 |
+----------------------------------------+------+----------+-----------+
| | | | Unaudited |
+----------------------------------------+------+----------+-----------+
| |Note | | GBP'000 |
+----------------------------------------+------+----------+-----------+
| ASSETS | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Non current assets | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Property, plant and equipment | | | 331 |
+----------------------------------------+------+----------+-----------+
| Goodwill | 6 | | 6,065 |
+----------------------------------------+------+----------+-----------+
| Other intangible assets | 6 | | 3,036 |
+----------------------------------------+------+----------+-----------+
| | | | 9,432 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Current assets | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Trade and other receivables | | | 1,276 |
+----------------------------------------+------+----------+-----------+
| Inventories | | | 483 |
+----------------------------------------+------+----------+-----------+
| Cash and cash equivalents | | | 13,954 |
+----------------------------------------+------+----------+-----------+
| | | | 15,713 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| TOTAL ASSETS | | | 25,145 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| EQUITY AND LIABILITIES | | | |
+----------------------------------------+------+----------+-----------+
| Attributable to equity holders of the | | | |
| parent | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Equity share capital | 7 | | 248 |
+----------------------------------------+------+----------+-----------+
| Share premium | 7 | | 19,100 |
+----------------------------------------+------+----------+-----------+
| Capital redemption reserve | | | 4,735 |
+----------------------------------------+------+----------+-----------+
| Other reserves | | | (307) |
+----------------------------------------+------+----------+-----------+
| Retained earnings | | | (1,968) |
+----------------------------------------+------+----------+-----------+
| TOTAL EQUITY | | | 21,808 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Non current liabilities | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Deferred tax liabilities | | | 274 |
+----------------------------------------+------+----------+-----------+
| | | | 274 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Current liabilities | | | |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| Trade and other payables | | | 2,082 |
+----------------------------------------+------+----------+-----------+
| Income tax payable | | | 10 |
+----------------------------------------+------+----------+-----------+
| Incentive Shares | | | 217 |
+----------------------------------------+------+----------+-----------+
| Deferred consideration | | | 754 |
+----------------------------------------+------+----------+-----------+
| | | | 3,063 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| TOTAL LIABILITIES | | | 3,337 |
+----------------------------------------+------+----------+-----------+
| | | | |
+----------------------------------------+------+----------+-----------+
| TOTAL EQUITY AND LIABILITIES | | | 25,145 |
+----------------------------------------+------+----------+-----------+
DIGITAL BARRIERS PLC
Consolidated statement of changes in equity
at 30 September 2010
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | Capital | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | Share | Share | Redemption | Retained | Other | Total |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | Capital | Premium | Reserve | Deficit | Reserves | equity |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| As at 1 March 2010 | 0 | 0 | 0 | 0 | 0 | 0 |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Total comprehensive income | 0 | 0 | 0 | (1,993) | 0 | (1,993) |
| - loss for the period | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Shares issued to market | 200 | 19,800 | 0 | 0 | 0 | 20,000 |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Share issue costs | 0 | (700) | 0 | 0 | 0 | (700) |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Issue of shares in exchange | 4,783 | 0 | 0 | 0 | 0 | 4,783 |
| for shares in Digital | | | | | | |
| Barriers Services Ltd | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Redemption of deferred | (4,735) | 0 | 4,735 | 0 | 0 | 0 |
| shares | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Arising on pooling of | 0 | 0 | 0 | 0 | (307) | (307) |
| interest transaction | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| Share based incentive | 0 | 0 | 0 | 25 | 0 | 25 |
| charge | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
| BALANCE AS AT 30 SEPTEMBER | 248 | 19,100 | 4,735 | (1,968) | (307) | 21,808 |
| 2010 | | | | | | |
+-----------------------------+---------+---------+------------+----------+----------+---------+
DIGITAL BARRIERS PLC
Consolidated statement of cash flows
for the period to 30 September 2010
+--+------------------------------------------+-----------+
| | 7 Months |
| | ended |
+---------------------------------------------+-----------+
| | 30 Sept |
| | 10 |
+---------------------------------------------+-----------+
| | Unaudited |
+---------------------------------------------+-----------+
| | GBP'000 |
+---------------------------------------------+-----------+
| Operating activities | |
+---------------------------------------------+-----------+
| Loss before tax | (2,020) |
+---------------------------------------------+-----------+
| Non-cash adjustment to reconcile loss | |
| before tax to net cash flows | |
+---------------------------------------------+-----------+
| | Depreciation of property, plant and | 33 |
| | equipment | |
+--+------------------------------------------+-----------+
| | Amortisation of intangible assets | 151 |
+--+------------------------------------------+-----------+
| | Share-based payment transaction expense | 25 |
+--+------------------------------------------+-----------+
| | Finance income | (44) |
+--+------------------------------------------+-----------+
| | Finance costs | 60 |
+--+------------------------------------------+-----------+
| Working capital adjustments: | |
+---------------------------------------------+-----------+
| | Decrease in trade and other receivables | 218 |
+--+------------------------------------------+-----------+
| | Decrease in inventories | 61 |
+--+------------------------------------------+-----------+
| | Decrease in trade and other payables | (355) |
+--+------------------------------------------+-----------+
| | |
+---------------------------------------------+-----------+
| Interest received | 44 |
+---------------------------------------------+-----------+
| Income tax paid | (80) |
+---------------------------------------------+-----------+
| Net cash flows from operating activities | (1,907) |
+---------------------------------------------+-----------+
| | |
+---------------------------------------------+-----------+
| Investing activities | |
+---------------------------------------------+-----------+
| Purchase of property, plant & equipment | (85) |
+---------------------------------------------+-----------+
| Acquisition of subsidiaries | (8,520) |
+---------------------------------------------+-----------+
| Acquisition of cash and cash equivalents of | 488 |
| subsidiaries | |
+---------------------------------------------+-----------+
| Cash and cash equivalents recognised under | 4,680 |
| pooling arrangements | |
+---------------------------------------------+-----------+
| Net cashflows generated in investing | (3,437) |
| activities | |
+---------------------------------------------+-----------+
| | |
+---------------------------------------------+-----------+
| Financing activities | |
+---------------------------------------------+-----------+
| Proceeds from issue of shares | 20,000 |
+---------------------------------------------+-----------+
| Share issue costs | (700) |
+---------------------------------------------+-----------+
| Interest paid | (2) |
+---------------------------------------------+-----------+
| Net cash flows from financing activities | 19,298 |
+---------------------------------------------+-----------+
| Net increase in cash and cash equivalents | 13,954 |
+---------------------------------------------+-----------+
| Cash and cash equivalents at 1 March | 0 |
+---------------------------------------------+-----------+
| Cash and cash equivalents at 30th September | 13,954 |
+--+------------------------------------------+-----------+
DIGITAL BARRIERS PLC
Notes to the financial statements
for the period to 30 September 2010
1. Accounting policies
Basis of preparation
The consolidated interim financial statements include those of Digital Barriers
plc and all of its subsidiary undertakings (together "the Group") drawn up at 30
September 2010. Subsidiary undertakings are those entities controlled directly
or indirectly by the Company. Control arises when the Group has the power to
govern the financial and operating policies of an entity so as to obtain
benefits from its activities. Subsidiaries are consolidated from the date of
their acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control ceases.
Subsidiaries are consolidated using the Group's accounting policies. Business
combinations are accounted for using the acquisition method of accounting except
for the acquisition of Digital Barriers Services Limited by Digital Barriers plc
which has been accounted for using the pooling method. All inter-company
balances and transactions, including unrealised profits arising from them, are
eliminated on consolidation.
The company is a limited liability company incorporated and domiciled in England
& Wales and whose shares are quoted on AIM, a market operated by The London
Stock Exchange.
The financial statements have been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting Standards as
adopted by the European Union ('IFRS') and are consistent with those which will
be adopted in the annual statutory financial statements for the year ended 31st
March 2011.
While the financial information included has been prepared in accordance with
the recognition and measurement criteria of International Financial Reporting
Standards as adopted by the European Union (EU), this announcement does not in
itself contain sufficient information to comply with IFRS's.
New holding company
On 8 February 2010, Digital Barriers plc was incorporated as a new holding
company and parent company of the Group. On 22 February 2010 the former
shareholders of Digital Barriers Services Limited ("DBSL") were issued new
shares in Digital Barriers plc in a share for share exchange. Immediately
following the share for share exchange the former shareholders of DBSL held the
same economic interest in Digital Barriers plc as they held in DBSL immediately
prior to the exchange.
The acquisition of DBSL by Digital Barriers plc falls outside the scope of
IFRS3R "Business Combinations" and has been accounted for in these financial
statements using the pooling of interests method which reflects the economic
substance of the transaction. In accordance with the requirements of the pooling
of interests method, the assets and liabilities of Digital Barriers plc and DBSL
are recognized and measured in these financial statements at their
pre-combination carrying amounts.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration transferred,
measured at acquisition date fair value and the amount of any non-controlling
interest in the acquiree. For each business combination, the acquirer measures
the non-controlling interest in the acquiree either at fair value or at the
proportionate share of the acquiree's identifiable net assets. Acquisition costs
incurred are expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in accordance
with the contractual terms, economic circumstances and pertinent conditions as
at the acquisition date. This includes the separation of embedded derivatives in
host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair
value of the acquirer's previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be
recognised at fair value at the acquisition date. Subsequent changes to the fair
value of the contingent consideration which is deemed to be an asset or
liability, will be recognised in accordance with IAS 39 either in profit or loss
or as a change to other comprehensive income. If the contingent consideration is
classified as equity, it should not be remeasured until it is finally settled
within equity.
Goodwill is initially measured at cost being the excess of the aggregate of the
consideration transferred and the amount recognised for non-controlling interest
over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in a
business combination is, from the acquisition date, allocated to each of the
Group's cash-generating units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree are assigned
to those units.
Where goodwill forms part of a cash-generating unit and part of the operation
within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining
the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values of the operation disposed
of and the portion of the cash-generating unit retained.
Impairment of Goodwill
The determination of whether or not goodwill has been impaired requires an
estimate to be made of the value in use of the cash-generating units to which
goodwill has been allocated. The value in use calculation includes estimates
about the future financial performance of the cash-generating units, including
management's estimates of long-term operating margins and long-term growth
rates.
Intangible Assets
In accordance with IFRS 3 "Business combinations" goodwill arising on the
acquisition of subsidiaries is capitalised and included in intangible assets.
IFRS 3 also requires the identification of other intangible assets acquired. The
method used to value intangible assets is the "income approach" The Income
Approach indicates the fair value of an asset based on the value of the cash
flows that the asset mightreasonably be expected to generate.
Other intangible assets
Intangible assets acquired from a business combination are capitalised at fair
value as at the date of acquisition and amortised over their estimated useful
economic life. An intangible asset acquired as part of a business combination is
recognised outside goodwill if the asset is separable or arises from contractual
or other legal rights and if its fair value can be measured reliably. The
estimated useful lives of the intangible assets are as follows: Customer
relationships and order book 3-5 years, Intellectual Property 1-7 years and
trademarks 10 years. Intangible assets, other than development costs, created
within the business are not capitalised and expenditure thereon is charged to
the income statement in the period in which the expenditure is incurred.
The carrying value of other intangible assets is reviewed for impairment when
events or changes in circumstance indicate that it may be impaired. If any such
indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss. The asset's recoverable amount is
the higher of the asset's fair value less costs to sell and its value in use.
Where it is not possible to estimate the recoverable amount of an individual
asset, the Group estimates the recoverable amount of the cash-generating unit to
which it belongs.
Revenue and Profit Recognition
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, VAT and other sales taxes. Revenue derived from professional
fees billed to clients on a time and materials or fixed-price basis represents
the value of work completed, including attributable profit, based on the stage
of completion achieved on each project. For time and materials projects, revenue
is recognised as services are performed. For fixed-price projects, revenue is
recognised according to the stage of completion which is determined using the
percentage-of-completion method based on the Directors' assessment of progress
against key project milestones and risks, and the ratio of costs incurred to
total estimated project costs. Revenue from support contracts is spread evenly
over the period of the support contract. Revenue from the sale of products is
recognised at the point at which goods are supplied to the client. Revenue from
recharging to clients the cost of specialist managed subcontractors and the
purchase of software or hardware for client assignments, together with
associated mark-up, is recognised as these costs are incurred. Where the Group
acts as agent in the transaction, only the mark up is recognised as Group
revenue. The cumulative impact of any revisions to the estimate of
percentage-of-completion of any fixed-price contracts is reflected in the period
in which such impact becomes known. Licence income is recognised in accordance
with the substance of the agreement. Revenue from licence agreements which have
no significant remaining performance obligations is recognised where there is
persuasive evidence that an arrangement exists, delivery has occurred, the fee
is fixed or determinable and collectability is probable.
Revenue recognised in this interim period arises largely from the sale of
products.
Amounts recoverable on contracts
Amounts recoverable on contracts represent revenue recognised to date less
amounts invoiced to clients. Full provision is made for known or anticipated
project losses.
Payments Received on Account
Payments received on account represent amounts invoiced to clients in excess of
revenue recognised to date.
Trade and other receivables
Trade receivables are recognised and measured at their original invoiced amount
less provision for any uncollectible amounts. An estimate for doubtful debts is
made when the collection of the full amount is no longer probable. Bad debts are
written off to the income statement when they are identified.
Provisions
Provisions are recognised in the balance sheet when there is a present legal or
constructive obligation as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made of the obligation.
Income taxes
Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates and laws
that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the
financial statements, with the following exceptions:
- where the temporary difference arises from the initial recognition of goodwill
- or of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor
taxable profit or loss;
- in respect of taxable temporary differences associated with investments in
subsidiaries, associates and joint ventures, where the timing of the reversal of
the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future; and
- deferred income tax assets are recognised only to the extent that it is
probable that taxable profit will be available against which the deductible
temporary differences, carried forward tax credits or tax losses can be
utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis
at the tax rates that are expected to apply when the related asset is realised
or liability is settled, based on tax rates and laws enacted or substantively
enacted at the balance sheet date.
The carrying amount of deferred income tax assets is reviewed at each balance
sheet date. Deferred income tax assets and liabilities are offset, only if a
legally enforcement right exists to set off current tax assets against current
tax liabilities, the deferred income taxes relate to the same taxation authority
and that authority permits the group to make a single net payment.
Income tax is charged or credited to other comprehensive income if it relates to
items that are charged or credited to other comprehensive income. Similarly,
income tax is charged or credited directly to equity if it relates to items that
are credited or charged directly to equity. Otherwise income tax is recognised
in the income statement.
Equity
Equity comprises the following: Share capital represents the nominal value of
equity shares. Share premium represents the excess over nominal value of the
fair value of consideration received for equity shares, net of expenses of the
share issue. Profit and loss reserve represents retained profits.
Research and Development Costs
Research expenditure is charged to income in the year in which it is incurred.
Expenditure incurred in the development of software and hardware products for
use or sale by the business, and their related intellectual property rights, is
capitalised as an intangible asset only when:
- Technical feasibility has been demonstrated;
- Adequate technical, financial and other resources exist to complete the
development, which the Group intends to complete and use;
- Future economic benefits expected to arise are deemed probable; and
- The costs can be reliably measured.
Development costs not meeting these criteria are expensed in the income
statement as incurred. When capitalised, development costs are amortised on a
straight-line basis over their useful economic lives once the related software
and hardware products are available to use. During the period of development
the asset is tested for impairment annually. No research and development costs
have been capitalised in the period.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and accumulated impairment losses. Depreciation is charged on the following
bases to reduce the cost of the Company's property, plant, and equipment to
their residual values over their expected useful lives at the following rates:
Leasehold improvements - 20% straight line,
Office furniture and equipment - 20% straight line,
Computer equipment - 33% straight line,
Demonstration Stock - 14% to 20% straight line.
The carrying value of property, plant and equipment is reviewed for impairment
when events or changes in circumstances indicate the carrying value may be
impaired.
Inventories
Inventories are valued at the lower of cost and net realisable value on a first
in first out basis. In the case of finished goods, cost includes all direct
expenditure and production overheads based on the normal level of activity.
Where necessary, an appropriate allowance is made for obsolete, slow-moving and
defective inventories. In certain instances stock items are used for
Demonstration purposes, in this case the stock item is classified as a fixed
asset and depreciated in line with the group depreciation policy.
Trade and other payables
Trade and other payables are initially recognised at fair value. Subsequent to
initial recognition, they are measured at amortised cost.
Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand
and short-term deposits with an original maturity of three months or less.
Deferred Income
Deferred income represents amounts received in advance from clients less
turnover recognised to date.
Financial Instruments
The Group classifies financial instruments, or their component parts, on initial
recognition as a financial asset, a financial liability or an equity instrument
in accordance with the substance of the contractual arrangement.
Foreign Currency Translation
The functional and presentation currency of the Group is Sterling. Transactions
denominated in foreign currencies are translated into Sterling at the rates of
exchange ruling on the date of the transaction. Monetary assets and liabilities
are translated into Sterling at the rate of exchange ruling at the balance sheet
dates. All other exchange differences are dealt with through the income
statement.
Retirement benefits
The Group operates defined contribution pension schemes for certain employees,
and makes contributions to a Group personal pension plan for the majority of
employees. Pension costs are calculated annually and charged to the income
statement as they arise.
Share Based Payments
Certain employees of the Group receive remuneration in the form of share-based
payment transactions, whereby employees render services in exchange for rights
over shares under the Long-Term Incentive Plan ("LTIPs"). The LTIP performance
and service conditions are all non-market conditions. The total amount to be
expensed over the vesting period of the options and LTIPs is determined by
reference to the fair value at the date at which the options or LTIPs are
granted and the number of awards that are expected to vest. The fair value is
determined using a Black Scholes model. The assumptions underlying the number of
options expected to vest are adjusted to reflect conditions prevailing at the
balance sheet date. At the vesting date, the cumulative expense recognised in
the income statement is adjusted to take account of the awards that actually
vest.
The executive directors have subscribed an aggregate of GBP217,500 for incentive
shares. The incentive shares only reward participants if shareholder value is
created, thereby aligning the interests of the executive directors with those of
shareholders. The incentive shares carry the right to 12.5 percent of any
increase in the value of the company in excess of the retail prices index after
1 February 2010. The incentive shares do not carry any voting or dividend rights
and are not transferable except in limited circumstances. The total amount to be
expensed over the vesting period of the incentive shares is determined by
reference to the fair value at the date at which the incentive shares were
acquired. The fair value is determined using a stochastic model. The cash
subscribed for the incentive shares has been recognised as a current liability
on the balance sheet as it becomes repayable if the executive directors leave
office. The fair value of the incentive shares has been determined to be
equivalent to the amount subscribed and hence no share based payment charge has
been recognised.
Employee Benefit Trust
The Digital Barriers Group Employee Benefit Trust (the "Trust"), which purchases
and holds ordinary shares of the Company in connection with employee share
schemes, is consolidated in the Group financial statements. Any consideration
paid or received by the Trust for the purchase or sale of the Company's own
shares is shown as a movement in shareholders' equity.
Lease commitments and hire purchase contracts
Assets acquired under finance leases and hire purchase contracts are capitalised
and disclosed under property, plant and equipment at their estimated fair value,
or, if lower, the present value of the minimum lease payments on the inception
of each lease or contract and depreciated over their estimated useful lives. The
capital element of the future payments is treated as a liability and the total
finance charge is allocated over the period of the lease or contract in such a
way as to give a constant charge on the outstanding liability.
Leases in which a significant proportion of the risk and rewards of ownership
are retained by the lessor are classified as operating leases. Operating lease
rentals payable or receivable are charged or credited to the income statement on
a straight-line basis over the lease term.
Dividends
Dividends proposed by the Directors and unpaid at the year end are not
recognised in the financial statements until they have been approved by
shareholders at a general meeting of the Company. Interim dividends are
recognised when they are paid.
Adoption of new and revised International Financial Reporting Standards
The Group's accounting policies have been prepared in accordance with IFRS
effective as for its reporting date of 31 March 2011.
2. Segmental information
At this stage of the Group's development, the directors are of the opinion that
there is only one reportable segment within the activities of the Group relating
to the provision of specialist Digital Security and Surveillance Technology and
Services. This is the business segment used for internal reporting purposes and
reviewed by the Directors to assess performance and allocate resources.
3. Adjusted loss
An adjusted loss measure has been presented which excludes the amortisation of
intangibles (GBP151,000), the cost of the initial public offering (GBP185,000)
and the costs of acquisitions (GBP500,000) as the directors believe that this is
a more relevant measure of the group's underlying performance.
4. Taxation on ordinary activities
It is anticipated that there will be no charge to United Kingdom corporation tax
for the period to 31st March 2011. The tax credit recognised in the interim
period arises from the unwinding of the deferred tax liability recognised on
acquisition.
5. Loss per share
The loss per share is calculated on the loss after tax of GBP1,993,000 and the
average number of shares in issue during the period of 22,183,000.
Diluted earnings per share are calculated as above as the inclusion of potential
ordinary shares arising from share options in issue would be anti-dilutive.
The adjusted loss per share is calculated on the adjusted loss before tax of
GBP1,184,000 and the average number of shares in issue during the period of
22,183,000.
Diluted adjusted earnings per share is calculated as above as the inclusion of
potential ordinary shares arising from share options in issue would be
anti-dilutive.
6. Acquisitions
Digital Barriers Services Limited
On 22nd February 2010, Digital Barriers plc acquired 100% of the shares of
Digital Barriers Services Limited to form the Digital Barriers group via a share
for share exchange. Digital Barriers plc issued 4,782,500 GBP1 ordinary shares
and 217,500 incentive shares at GBP1 to acquire 100% of the share capital of
Digital Barriers Services Limited. This transaction has been accounted for using
the pooling of interests method. Digital Barriers Services Limited is the main
operating business of the group.
The carrying value of the assets and liabilities of Digital Barriers Services
Limited at the transaction date are set out below.
+---------------------------------------------------+----------+
| GBP'000 | Carrying |
| | Value |
+---------------------------------------------------+----------+
| Non-current assets | |
+---------------------------------------------------+----------+
| Tangible Fixed Assets | 51 |
+---------------------------------------------------+----------+
| Total Non-current Assets | 51 |
+---------------------------------------------------+----------+
| | |
+---------------------------------------------------+----------+
| Current Assets | |
+---------------------------------------------------+----------+
| Trade & other receivables | 28 |
+---------------------------------------------------+----------+
| Cash and cash equivalents | 4,680 |
+---------------------------------------------------+----------+
| Total Current Assets | 4,708 |
+---------------------------------------------------+----------+
| | |
+---------------------------------------------------+----------+
| Total Assets | 4,759 |
+---------------------------------------------------+----------+
| | |
+---------------------------------------------------+----------+
| Current liabilities | |
+---------------------------------------------------+----------+
| Trade & other payables | 66 |
+---------------------------------------------------+----------+
| Total current liabilities | 66 |
+---------------------------------------------------+----------+
| | |
+---------------------------------------------------+----------+
| Net Assets Acquired | 4,693 |
+---------------------------------------------------+----------+
The difference of GBP307,000 between the carrying value of the net assets
acquired and the GBP5,000,000 of shares issued in consideration has been
recognised in reserves on consolidation.
Security Applications Limited
On 23rd March 2010, the group acquired the entire issued share capital of
Security Applications Ltd (SAL), (trading as D Ford Associates).
SAL is a UK-based specialist supplier, installer and integrator of thermal
imaging equipment for perimeter surveillance, law enforcement and the protection
of high-profile target locations. SAL supplies customised equipment and
associated installation and maintenance services on a project-by-project basis
to a highly-concentrated customer base through a framework agreement with a
major UK Government department.
+--------------------------------+----------+-------------+---------+
| GBP'000 | Carrying | Adjustments | Fair |
| | Value | | Value |
+--------------------------------+----------+-------------+---------+
| Non-current assets | | | |
+--------------------------------+----------+-------------+---------+
| Tangible Fixed Assets | 136 | - | 136 |
+--------------------------------+----------+-------------+---------+
| Customer relationships - | - | 778 | 778 |
| intangible | | | |
+--------------------------------+----------+-------------+---------+
| Intellectual Property - | - | 256 | 256 |
| intangible | | | |
+--------------------------------+----------+-------------+---------+
| Total Non-current Assets | 136 | | 1,170 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Current Assets | | | |
+--------------------------------+----------+-------------+---------+
| Trade & other receivables | 732 | - | 732 |
+--------------------------------+----------+-------------+---------+
| Inventories | 124 | - | 124 |
+--------------------------------+----------+-------------+---------+
| Cash and cash equivalents | 238 | - | 238 |
+--------------------------------+----------+-------------+---------+
| Total Current Assets | 1,094 | | 1,094 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Total Assets | 1,230 | | 2,264 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Current liabilities | | | |
+--------------------------------+----------+-------------+---------+
| Trade & other payables | 580 | - | 580 |
+--------------------------------+----------+-------------+---------+
| Income tax payable | 89 | - | 89 |
+--------------------------------+----------+-------------+---------+
| Total current liabilities | 669 | | 669 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Non-current liabilities | | | |
+--------------------------------+----------+-------------+---------+
| Deferred tax liabilities | 21 | 281 | 302 |
+--------------------------------+----------+-------------+---------+
| Total Non-current Liabilities | 21 | | 302 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Total liabilities | 690 | | 971 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Net Assets Acquired | 540 | | 1,293 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| | | | GBP'000 |
+--------------------------------+----------+-------------+---------+
| Consideration paid in cash | | | 2,013 |
+--------------------------------+----------+-------------+---------+
| Deferred payments | | | 697 |
+--------------------------------+----------+-------------+---------+
| Total consideration | | | 2,710 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Goodwill arising from | | | 1,417 |
| Acquisition | | | |
+--------------------------------+----------+-------------+---------+
The provisional fair value of the identifiable assets and liabilities of SAL at
acquisition date are set out below.
The goodwill of GBP1,417,000 comprises the value of expected synergies arising
from the acquisition and the workforce, which is not separately recognised. None
of the goodwill recognised is expected to be deductible for income tax purposes.
The deferred consideration represents an earn-out based on revenue and profit
targets for the period ending 31 July 2011.
Overtis Solutions
On 23rd July 2010 the group acquired the business and assets of the Solutions
division of Overtis Group for GBP3.20m in cash.
Overtis Solutions is a UK-based specialist provider of integrated security
solutions used in the protection of high value physical, human and information
assets on a global basis held by high risk government departments, public sector
bodies and major corporations.
The provisional fair value of the identifiable assets and liabilities of Overtis
Solutions at acquisition date are set out below.
+--------------------------------+----------+-------------+---------+
| GBP'000 | Carrying | Adjustments | Fair |
| | Value | | Value |
+--------------------------------+----------+-------------+---------+
| Non-current assets | | | |
+--------------------------------+----------+-------------+---------+
| Tangible Fixed Assets | 79 | - | 79 |
+--------------------------------+----------+-------------+---------+
| Customer relationships - | - | 1,197 | 1,197 |
| intangible | | | |
+--------------------------------+----------+-------------+---------+
| Total Non-current Assets | 79 | | 1,276 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Current Assets | | | |
+--------------------------------+----------+-------------+---------+
| Inventories | 99 | - | 99 |
+--------------------------------+----------+-------------+---------+
| Total Current Assets | 99 | | 99 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Net Assets Acquired | 178 | | 1,375 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| | | | GBP'000 |
+--------------------------------+----------+-------------+---------+
| Consideration paid in cash | | | 3,200 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Goodwill arising from | | | 1,825 |
| Acquisition | | | |
+--------------------------------+----------+-------------+---------+
The goodwill of GBP1,825,000 comprises the value of expected synergies arising
from the acquisition and the workforce, which is not separately recognised. All
of the goodwill recognised is expected to be deductible for income tax purposes.
COE Group plc
On the 20th of August 2010 the groups recommended cash offer for the issued
share capital of COE Plc for GBP3.3m in cash became unconditional, and the group
took control of Coe Group plc.
COE's focus has been to specialise in bringing innovative products to the video
surveillance market. This has culminated in the successful development of COE's
product range which offer high levels of video quality and technological
integration for surveillance activities across IP, fibre and hybrid networks.
The provisional fair value of the identifiable assets and liabilities of COE
Group plc at acquisition date are set out below.
+--------------------------------+----------+-------------+---------+
| GBP'000 | Carrying | Adjustments | Fair |
| | Value | | Value |
+--------------------------------+----------+-------------+---------+
| Non-current assets | | | |
+--------------------------------+----------+-------------+---------+
| Tangible Fixed Assets | 14 | - | 14 |
+--------------------------------+----------+-------------+---------+
| Customer relationships - | - | 715 | 715 |
| intangible | | | |
+--------------------------------+----------+-------------+---------+
| Intellectual Property - | - | 138 | 138 |
| intangible | | | |
+--------------------------------+----------+-------------+---------+
| Trademark - Intangible | - | 103 | 103 |
+--------------------------------+----------+-------------+---------+
| Total Non-current Assets | 14 | | 970 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Current Assets | | | |
+--------------------------------+----------+-------------+---------+
| Trade & other receivables | 734 | - | 734 |
+--------------------------------+----------+-------------+---------+
| Inventories | 321 | | 321 |
+--------------------------------+----------+-------------+---------+
| Cash and cash equivalents | 250 | - | 250 |
+--------------------------------+----------+-------------+---------+
| Total Current Assets | 1,305 | | 1,305 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Total Assets | 1,319 | | 2,275 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Current liabilities | | | |
+--------------------------------+----------+-------------+---------+
| Trade & other payables | 1,763 | - | 1,763 |
+--------------------------------+----------+-------------+---------+
| Total current liabilities | 1,763 | | 1,763 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Non-current liabilities | | | |
+--------------------------------+----------+-------------+---------+
| Trade & other payables | 28 | - | 28 |
+--------------------------------+----------+-------------+---------+
| Total Non-current Liabilities | 28 | | 28 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Total liabilities | 1,791 | | 1,791 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Net Assets Acquired | (472) | | 484 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| | | | GBP'000 |
+--------------------------------+----------+-------------+---------+
| Consideration paid in cash | | | 3,307 |
+--------------------------------+----------+-------------+---------+
| | | | |
+--------------------------------+----------+-------------+---------+
| Goodwill arising from | | | 2,823 |
| Acquisition | | | |
+--------------------------------+----------+-------------+---------+
The goodwill of GBP2,823,000 comprises the value of expected synergies arising
from the acquisition and the workforce, which is not separately recognised. None
of the goodwill recognised is expected to be deductible for income tax purposes.
7. Issued capital and reserves
On 22nd February 2010 the Company issued 4,782,500 Ordinary Shares of GBP1 each
in a share for share exchange to acquire Digital Barriers Services Ltd. These
shares were subsequently sub-divided into 4,782,500 shares of GBP0.01 each and
4,782,500 Deferred Shares of GBP0.99 each. The Deferred Shares were bought back
by the Company for a total consideration of GBP1 from the proceeds of the IPO,
resulting in a capital redemption reserve of GBP4,735,000.
On 4th March 2010 the Company issued 20,000,000 GBP0.01 Ordinary shares for a
total consideration of GBP20,000,000.
8. Post Balance Sheet Events
On the 20th October 2010, Digital Barriers acquired the entire share capital of
Waterfall Solutions Limited for a maximum consideration of GBP5.5m in cash and
loan notes. The initial consideration of GBP3.9m was paid in cash. Deferred
consideration of up to GBP0.85 million is payable in cash and loan notes on
completion of Waterfall's current financial year, ending 30 September 2011, and
an additional sum of GBP0.75 million is payable in cash and loan notes on
completion of the subsequent financial year, ending on 30 September 2012,
subject to the satisfaction of certain performance conditions.
Waterfall is as UK-based provider of advanced technology solutions and related
consulting services, specialising in the areas of image processing, data fusion,
modelling and simulation, and fits neatly with Digital Barriers existing
acquired assets. Waterfall works directly with government and commercial clients
in the defence and security sectors as well as through strategies partnerships
and prime systems integrators.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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