TIDMTNG
RNS Number : 5667N
Tangent Communications PLC
19 May 2015
Tangent Communications PLC ("Tangent or the Company")
Results for the year ended 28 February 2015
Financial highlights
-- Revenues were GBP26.25m (2014: GBP26.50m) down 0.9%
-- Underlying operating profit fell 52.8% to GBP1.18m (2014: GBP2.50m)
-- Profit before tax fell 80.4% to GBP0.46m (2014: GBP2.35m)
-- Revenues from our retail websites were up at 37.1% of group total (2014: 34.4%)
-- Underlying earnings per share(1) fell by 52.4% to 0.30p (2014: 0.63p)
-- Net cash(2) is GBP1.58m (2014: GBP2.81m)
(1) Underlying earnings per share is before non-recurring
expenses, net of tax and on a fully diluted basis
(2) Net cash and cash equivalents less all borrowings
(3) Prior year comparisons restated to reflect discontinued
operations
Tangent's Chief Executive, Timothy Green, commented:
"2014-15 was a challenging year for Tangent; our profits were
down and performance in certain areas of our business fell short of
expectations.
People and businesses will continue to buy more print online and
the range of products they demand will expand. Tangent remains well
positioned and committed to grow its share of this exciting market
place.
We are moving towards a more streamlined approach to the online
print market to allow us to maximise our potential and ensure we
are providing our customers with the best possible choice, value
and experience".
For further information, please contact:
Tangent Communications PLC
Timothy Green - Chief Executive 020 7462 6101
Jamie Beaumont - Chief Financial Officer 020 7462 6101
Canaccord Genuity Limited - Nominated adviser and broker
Bruce Garrow / Emma Gabriel 020 7523 8000
STRATEGIC REPORT
CEO REPORT
Consolidated performance
Sales of GBP26.25m for the full year 2014-15 were 0.9% lower
than the prior year. Gross profit margin was down 2.2%. Sales of
high margin products, notably business card sales, declined and
were replaced with lower margin sales.
Underlying operating profit was GBP1.18m, with margin down from
9.4% to 4.5%, a direct result of the lower sales and gross profit
margin. Costs of GBP0.71m associated with downsizing Tangent
Snowball in the first half, rationalising Ravensworth in the second
half and relocation expenses reduced profit before tax to
GBP0.46m.
Our businesses
Online
Tangent generates the majority of its print revenues online. Our
broad customer base includes design professionals, print buyers and
a growing number of design savvy consumers. They purchase from a
broad range of products including business cards, brochures,
leaflets and flyers, posters, wedding stationery and personalised
wrapping paper (wrap.me). The majority are produced in-house at our
Newcastle facility.
Overall, online print sales in FY 2015 grew more slowly than
anticipated to GBP17.19m (2014: GBP15.94m), up 7.8%.
General demand to buy print online remains buoyant, demonstrated
by a 25% year on year increase in sales at printed.com across a
broadening range of products. Measures have been taken to
rationalise our approach to the online print business, focusing
more intently on driving sales through the growing printed.com
platform. This will include the transfer of the goodprint business
in to printed.com. For small businesses and sole traders, the
printed.com offer is particularly compelling, with a dedicated part
of the website tailored for particular groups, from wedding
stationers to photographers. The opportunity to develop a greater
breadth in our product offering and reach more customers remains
significant.
We believe this streamlined approach will enable us to maximise
our potential in the online print market. We will continue to
launch new products where demand is growing and capacity from
existing manufacturing can be most effectively utilised.
In line with this approach, going forwards, we will report the
performance of printed.com, goodprint and Ravensworth combined.
This more accurately reflects the overall structure of our print
business which shares key overheads in production.
printed.com
Sales in printed.com of GBP7.60m were up 25.2% on the prior year
(2014: GBP6.07m). The key to printed.com's success is constant
innovation, with a relentless push to get the right products onto
our website at the right price. This strategy continues to attract
new customers, with 25,000+ ordering in the year. We also continue
to see more customers returning year on year.
goodprint
The decrease in sales was acute for business cards, down 34.0%
at GBP2.14m (2014: GBP3.24m) as the market has become increasingly
competitive. Following the acquisition of Goodprint UK Ltd
("goodprint") in 2012, we integrated all of goodprint's print
operations with those of printed.com, but retained the customer
facing brands. We are now in the process of merging those brands.
This will reduce costs, provide both printed.com and goodprint
customers with a better range of products, and allow us to attract
new customers with greater efficiency.
Ravensworth
Ravensworth benefitted from a strengthening of the residential
property market into the early part of FY 2015, but saw the market
cool significantly with sales from October dropping 20% below the
trend set in the first eight months of the year. This impacted
profitability as the business experienced substantial diseconomies
of scale before it was able to fully adjust to the changing market
conditions.
Sales in FY 2015 were GBP7.45m, up 12.4% on the prior year,
supported by a buoyant residential property market during the first
half of the year. Following the cooling of the market from October
2014 onwards which severely impacted profitability in the business,
costs have been reduced to reflect current business levels.
Agency
Tangent Snowball ("TS")
TS is a digital marketing agency offering a blend of technology
and creative insight. Its customer base includes global brands such
as Carlsberg, PepsiCo, SAP and the Wolseley Group.
Sales during the year of GBP6.67m are down 18.5% (2014:
GBP8.18m). TS revenues were affected by budget cuts from two key
clients at the start of the year and the previously announced
divestment of operations in Australia.
TS has reacted to the challenges with a smaller headcount and
has started to see the benefits of operating with this leaner team.
Digital marketing remains in demand but competition and in house
skills continue to develop. New business was slower than targeted
to relieve the current dependency on our existing customer base and
senior management changes have now taken place.
Tangent On Demand ("T/OD")
T/OD is our innovative, print supplier, based in the City of
London, with a focus on producing design-inspired print solutions
to fashion retailers and advertising agencies.
Sales at T/OD grew by 0.4% to GBP2.39m (2014: GBP2.38m).
T/OD moved premises in FY 2015 and no longer shares overheads
with Tangent Snowball. In FY 2016 we will report T/OD within the
Online segment where all the print sales in Tangent reside.
Historic comparisons will reflect this.
Outlook
We have started the year in line with expectations, however
profits are anticipated to be lower year on year in the first half
of the year.
This year will see the rationalisation in our online print
business take effect to better address our markets. We continue to
drive innovation, developing new products and platforms to maximise
revenues from existing customers and attract new ones.
We have also invested in our people and have welcomed some new
talent in to key areas of the business to help drive growth and
profitability.
Despite the challenges of the last year, there is a sizeable
market to exploit and customers want the products we are offering.
We believe the business is well placed to capitalise on these
opportunities.
CFO REPORT
Non-recurring expenses
During the year the board reviewed the operational and
management structure of all business segments. That review resulted
in a reduction in headcount and lead to restructuring and
redundancy costs of GBP0.59m. In addition all of Tangent's London
based businesses moved premises during the year, which resulted in
GBP0.12m in one off relocation expenses.
Discontinued operations
On 12 March 2014, Tangent completed the disposal of 81% of the
issued share capital in Tangent Snowball PTY Limited, a company
incorporated in Australia. Fees and expenses related to the sale
(GBP0.06m) together with the loss on disposal (GBP0.06m) have been
shown in the statement of comprehensive income under discontinued
operations. The results of Tangent Snowball PTY Limited have not
been included in the consolidated financial statements for the year
to 28 February 2015 and have been included under discontinued
operations in the consolidated statement of comprehensive income
for the year to 28 February 2014.
Cash Flows
Tangent's cash and cash equivalents at 28 February 2015 amounted
to GBP1.88m (2014: GBP3.09m), net cash, after deducting all
outstanding debt, amounted to GBP1.58m (2014: GBP2.81m), a
reduction of GBP1.23m over the year.
Cash generated from operations amounted to GBP1.86m (2014:
GBP2.93m), representing 157.6% (2014: 117.2%) of underlying
operating profit and 404.3% (2014: 124.7%) of profit before
tax.
Capital Expenditure
Tangent continues to invest in printing equipment, IT
infrastructure and the development of software platforms and
websites to increase online sales. In addition, during 2014,
Tangent re-located all of its London based businesses and
investment was made in leasehold improvements as part of that
move.
During the year, GBP0.57m (2014: GBP0.50m) was spent on printing
equipment and IT, GBP0.28m (2014: GBP0.03m) on leasehold
improvements and GBP0.64m (2014: GBP0.56m) on software. Investment
in equipment and IT is expected to continue at a similar level in
the year to February 2016, reduce in software and not recur in
leasehold improvements.
Balance Sheet
Tangents' balance sheet remains strong with net assets of
GBP31.30m. This was GBP0.81m lower than 28 February 2014, impacted
by GBP0.38m in share re-purchase costs and dividends paid
(GBP0.66m) which exceeded retained earnings for the year ended 28
February 2015 by GBP0.45m.
Goodwill continues to be the largest asset on Tangent's balance
sheet at GBP24.80m (2014: GBP24.80m). The carrying value of
goodwill is tested annually for signs of impairment. Lower
operating profits have resulted in a reduction in the headroom
within the valuation of goodwill but no impairment was present at
28 February 2015. Full details are included in note 6 to the
financial statements.
Trade and other receivables were GBP4.49m (2014: GBP5.31m) a
reduction of GBP0.82m reflecting the increasing proportion of
customers that pay upfront and online with debit and credit
cards.
Dividend Declaration
The board is not proposing the payment of a final dividend.
Share Buyback
During the year Tangent bought back 3,945,000 GBP0.01 ordinary
shares at a total cost GBP0.38m, these shares are being held in
treasury. The Board has no current intention to make any further
share buybacks.
Key performance indicators
Financial KPI's
The key financial performance indicators that are noted and
commented upon individually in the strategic report are as
follows:-
KPIs 2015 2014
----------------------------------- ----------- -----------
Revenue GBP26.25m GBP26.50m
----------------------------------- ----------- -----------
Revenue decline/growth -0.9% 12.1%
----------------------------------- ----------- -----------
Reduction/improvement in gross
margin -2.2% 4.4%
----------------------------------- ----------- -----------
Employment costs as a percentage
of sales 40.5% 37.7%
----------------------------------- ----------- -----------
Underlying operating margin 4.5% 9.4%
----------------------------------- ----------- -----------
Fully diluted underlying earnings 0.30 pence 0.63 pence
per share
----------------------------------- ----------- -----------
Cash conversion - % of underlying
operating profit turned into
operating cash flow 157.6% 117.2%
----------------------------------- ----------- -----------
All KPI's are based on continuing activities only.
Non-financial KPIs
Waste management and recycling
Tangent is committed to mitigating the impact on the environment
of its operations and to measuring the amount of waste sent to
landfill. Our aim remains to ensure that no waste created in our
Newcastle print facility is sent to landfill.
Tangent recognises the value created by accreditation to the
Forestry Stewardship Council (FSC) and has continued its commitment
thereto. This ensures that paper stocks used conform to the FSC's
chain of custody requirements.
Our ongoing commitment to ISO14001 (Environmental Management),
continues to form a key part of our environmental and waste
management policy.
Tangent is pleased to confirm that again this year, no waste
produced in our Newcastle facility was sent to landfill.
Staff retention
Tangent recognises that staff retention is an important issue
for both business continuity and profitability. Tangent offers
competitive salary packages and uses staff appraisal systems to
identify and satisfy training needs.
To monitor retention, Tangent reviews staff turnover to identify
any trends and take action as and when required.
During the year to 28 February 2015, average monthly staff
turnover was 2.0% (2014: 2.1%).
Operational risks and uncertainties
The principal risks and uncertainties faced by Tangent are
detailed below. Some risks remain beyond the control of Tangent and
we cannot therefore provide absolute assurance that all risks are
managed to an acceptable level.
Risk area Impact on Tangent Mitigation of risk
------------------------------ ---------------------------------- ---------------------------------
Loss of service in both Tangent will not be Tangent invests in significant
website and print/delivery able to fulfil client IT hosting infrastructure
infrastructure. orders and as such financial to ensure that up time
performance may be impacted is maximised and disaster
in both the short and recovery procedures
longer term as customers are resilient and robust.
may move to alternative Tangent has service
suppliers. contracts in respect
of all its key items
of plant with contracted
service levels to mitigate
downtime. In addition,
Tangent invests in vendor
lead training programmes
to further reduce machinery
failure.
------------------------------ ---------------------------------- ---------------------------------
Loss or a significant Whilst no client represents Tangent has a proven
reduction in revenue more than 10% of group track record of both
from a major client revenue, Tangent Snowball winning new business
has some significant and organically growing
client relationships. long term client relationships.
Loss or a significant Strategic account managers
reduction in revenue are appointed to preserve
from one or more of these relationships,
these clients may impact monitor service levels
Tangent's operating and expand services
profit and financial to clients.
performance.
------------------------------ ---------------------------------- ---------------------------------
Shortage or loss of The inability to attract Tangent seeks to engage,
key personnel and skills or retain key staff motivate and retain
with the required level staff by offering remuneration
of competency and technical packages that include
knowledge may impact competitive basic salaries,
our ability to capitalise annual bonus awards
on opportunity and deliver and benefits packages.
against our business Comprehensive annual
strategy and objectives. staff reviews are undertaken
to identify skills gaps.
------------------------------ ---------------------------------- ---------------------------------
Deterioration in the Tangent is a provider Trends, both general
general economic environment of marketing services and market specific,
and print to businesses are monitored and factored
and consumers. There into business planning
is a risk that general and forecasting. In
economic issues may addition, Tangent builds
impact Tangent's clients strong working relationships
and reduce their spending with its significant
power. This may impact clients maintaining
on revenue and the profitability an on-going dialogue
of Tangent. to provide visibility
on potential future
revenue.
------------------------------ ---------------------------------- ---------------------------------
Technological obsolescence Tangent's equipment/products Tangent continues to
may become obsolete, invest in digital platforms
potentially impacting to improve our competitive
productivity and margin. edge and broaden the
product offering.
Development of strong
relationships with suppliers
and dedicated procurement
resources within the
group ensures that Tangent
is able to react quickly
to changes in technology.
------------------------------ ---------------------------------- ---------------------------------
Consolidated statement of comprehensive income
for the year ended 28 February 2015
2015 2014
Notes GBP000 GBP000
------------------------------------- ------ --------- ---------
Revenue 26,249 26,503
Cost of sales (10,822) (10,331)
------------------------------------- ------ --------- ---------
Gross profit 15,427 16,172
Operating expenses (14,251) (13,489)
Share-based payment charge - (183)
------------------------------------- ------ --------- ---------
Underlying operating profit 1,176 2,500
Non-recurring expenses 2 (708) (131)
Operating profit 468 2,369
Finance costs (12) (18)
------------------------------------- ------ --------- ---------
Profit before tax 456 2,351
Tax (122) (628)
------------------------------------- ------ --------- ---------
Profit for the year from continuing
operations 334 1,723
------------------------------------- ------ --------- ---------
Discontinued operations
Loss for the year from discontinued
operations (122) (25)
------------------------------------- ------ --------- ---------
Profit for the year - attributable
to equity shareholders 212 1,698
--------------------------------------------- --------- ---------
Other comprehensive income
Exchange differences on translating
foreign operations - (42)
--------------------------------------------- --------- ---------
Total comprehensive income
for the year 212 1,656
------------------------------------- ------ --------- ---------
Basic earnings per share (pence) 4
From continuing operations 0.12 0.62
From discontinued operations (0.04) (0.01)
From profit for the year 0.08 0.61
Diluted earnings per share
(pence)
From continuing operations 0.12 0.60
From discontinued operations (0.04) (0.01)
From profit for the year 0.08 0.59
Consolidated statement of changes in equity
for the year ended 28 February 2015
Share Share Own shares Other Retained Total
capital premium Reserves earnings equity
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ------ -------- -------- ----------- --------- --------- --------
At 28 February 2013 2,790 8,584 - 3,898 15,484 30,756
Comprehensive income:
Profit for the year - - - - 1,698 1,698
Other comprehensive
income - - - - (42) (42)
----------------------- ------ -------- -------- ----------- --------- --------- --------
Total comprehensive
income - - - - 1,656 1,656
----------------------- ------ -------- -------- ----------- --------- --------- --------
Transactions with
owners:
Dividend 5 - - - - (558) (558)
Credit to equity for
equity-settled
share-based payments - - - 243 -- 243
Transfer on exercise
of options - - - (116) 116 -
Issue of shares 7 15 3 - - - 18
Total transactions
with owners 15 3 - 127 (442) (297)
----------------------- ------ -------- -------- ----------- --------- --------- --------
At 28 February 2014 2,805 8,587 - 4,025 16,698 32,115
----------------------- ------ -------- -------- ----------- --------- --------- --------
Comprehensive income:
Profit for the year - - - - 212 212
Other comprehensive - - - - - -
income
----------------------- ------ -------- -------- ----------- --------- --------- --------
Total comprehensive
income - - - - 212 212
----------------------- ------ -------- -------- ----------- --------- --------- --------
Transactions with
owners:
Dividend 5 - - - - (663) (663)
Credit to equity for
equity-settled
share-based payments - - - 10 - 10
Transfer on exercise
of options - - - (39) 39 -
Own shares acquired
in the year 8 - - (379) - - (379)
Issue of shares 7 8 - - - - 8
Total transactions
with owners 8 -- (379) (29) (624) (1,024)
----------------------- ------ -------- -------- ----------- --------- --------- --------
At 28 February 2015 2,813 8,587 (379) 3,996 16,286 31,303
----------------------- ------ -------- -------- ----------- --------- --------- --------
Consolidated balance sheet
At 28 February 2015
2015 2014
Notes GBP000 GBP000
------------------------------------- ------ -------- --------
Assets
Non-current assets
Intangible assets 6 26,288 25,939
Property, plant and equipment 2,121 1,950
Deferred tax asset 141 230
------------------------------------- ------ -------- --------
28,550 28,119
------------------------------------- ------ -------- --------
Current assets
Inventories 414 236
Trade and other receivables 4,492 5,311
Cash and cash equivalents 1,875 3,094
------------------------------------- ------ -------- --------
6,781 8,641
------------------------------------- ------ -------- --------
Total assets 35,331 36,760
------------------------------------- ------ -------- --------
Liabilities
Current liabilities
Borrowings (143) (194)
Trade and other payables (3,505) (3,590)
Current tax liabilities (143) (637)
Provisions for liabilities (33) (34)
------------------------------------- ------ -------- --------
(3,824) (4,455)
------------------------------------- ------ -------- --------
Non-current liabilities
Borrowings (148) (91)
Provisions for liabilities (56) (99)
------------------------------------- ------ -------- --------
(204) (190)
------------------------------------- ------ -------- --------
Total liabilities (4,028) (4,645)
------------------------------------- ------ -------- --------
Net assets 31,303 32,115
------------------------------------- ------ -------- --------
Equity
Share capital 7 2,813 2,805
Share premium 8,587 8,587
Own shares 8 (379) -
Other reserves 3,996 4,025
Retained earnings 16,286 16,698
------------------------------------- ------ -------- --------
Total equity attributable to equity
shareholders of the company 31,303 32,115
------------------------------------- ------ -------- --------
Consolidated statement of cash flows
for the year ended 28 February 2015
2015 2014
Notes GBP000 GBP000
-------------------------------------------- ------ -------- --------
Cash from operations
Cash generated from operations 9 1,861 2,932
Interest paid (12) (18)
Tax paid (527) (633)
-------------------------------------------- ------ -------- --------
Net cash inflow from operating activities 1,322 2,281
-------------------------------------------- ------ -------- --------
Investing activities
Disposal of subsidiary (22) -
Development of software (644) (563)
Purchase of property, plant and equipment (847) (527)
Sale of property, plant and equipment - 29
Net cash used in investing activities (1,513) (1,061)
-------------------------------------------- ------ -------- --------
Financing activities
Dividends paid (663) (558)
Purchase of own shares (379) -
Repayment of borrowings (210) (186)
New finance leases raised 216 -
Proceeds on issue of shares (net of
costs) 8 18
Net cash outflow from financing activities (1,028) (726)
-------------------------------------------- ------ -------- --------
(Decrease)/increase in cash and cash
equivalents (1,219) 494
-------------------------------------------- ------ -------- --------
Cash and cash equivalents at beginning
of year 3,094 2,642
-------------------------------------------- ------ -------- --------
Effect of foreign exchange rate changes - (42)
-------------------------------------------- ------ -------- --------
Cash and cash equivalents at end of
year 1,875 3,094
-------------------------------------------- ------ -------- --------
1. Basis of preparation
Tangent Communications plc is quoted on the AIM market of the
London Stock Exchange. It has the TIDM code TNG and is incorporated
in England.
The Group's consolidated financial statements for the year ended
28 February 2015, from which this financial information has been
extracted, and for the comparative year ended 29 February 2014 are
prepared on a going concern basis and in accordance with IFRS as
adopted by the EU ("IFRS"), and in accordance with those parts of
the Companies Act 2006 applicable to companies reporting under
IFRS.
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006 but it is derived from those
accounts. The financial information for the year ended 28 February
2014 is derived from the statutory accounts for that year which
have been delivered to the Registrar of Companies. The auditors
reported on those accounts; their report was unqualified and did
not contain a statement under s498(2) or s498(3) of the Companies
Act 2006. The consolidated statement of financial position at 28
February 2015, the consolidated statement of comprehensive income,
the consolidated statement of changes in equity, the consolidated
statement of cash flows and the related notes for the year then
ended have been extracted from the Group's 2015 statutory financial
statements upon which the auditor's opinion is unqualified and does
not include any statement under s498(2) or s498(3) of the Companies
Act 2006.
The announcement has been agreed with the company's auditor for
release.
2. Non-recurring expenses
In order to provide a clear view on operating performance,
Tangent shows separately on the face of the statement of
comprehensive income those items that are both significant and
non-recurring in nature.
During the year, the board reviewed the operational and
management structure of all business segments. That review resulted
in a reduction in headcount, restructuring and employment
termination costs. In addition, Tangent moved its London head
offices, resulting in one off relocation costs. These costs have
been included in non-recurring expenses as they do not form part of
the normal activities of Tangent and were as follows:-
GBP000
Redundancy and restructuring costs 589
Relocation expenses 119
708
-------
3. Segmental information
Management has determined the operating segments based on the
reports reviewed by the Board of Directors that are used to make
strategic decisions, which reviews revenues and operating profits
by segment but assets at a consolidated level.
The group had two reportable segments. Unallocated corporate
expenses are shown below under PLC.
Online - ComprisesRavensworth, printed.com and goodprint.
Agency - Comprises Tangent Snowball and T/OD (Tangent on
Demand).
PLC - PLC costs relate to the cost of non-executive directors,
maintenance of Tangent's stock market listing, general professional
advice together with the share-based payment charge as set out in
note 25. Executive directors' costs are allocated to the Online and
Agency business segments.
The segment results for the year ended 28 February 2015 were as
follows:
Agency Online PLC Total
GBP000 GBP000 GBP000 GBP000
Revenue 9,293 17,611 - 26,904
Less inter segment sales (234) (421) - (655)
------- ------- ------- -------
Revenues from external customers 9,059 17,190 - 26,249
------- ------- ------- -------
Results
Underlying operating profit 687 899 (410) 1,176
Non-recurring costs (263) (445) - (708)
------- ------- ------- -------
Profit from
operations 424 454 (410) 468
------- ------- ------- -------
Net finance
costs (12)
-------
Profit before
tax 456
Income tax expense (122)
Loss for the year from discontinued
activities (122)
-------
Profit for the
year 212
-------
Other segment information
Agency Online PLC Total
GBP000 GBP000 GBP000 GBP000
Depreciation 427 241 3 671
Amortisation 241 54 - 295
------- ------- ------- -------
Major customers
During the year, Tangent had no customer that represented more
than 10% of revenues.
Online had no customer that represented more than 10% of that
segment\'s revenues.
Agency customers representing more than 10% of that segment's
revenue for the year were as follows:
Customer one 23%
Customer two 16%
The segment results for the year ended 28th February 2014 were
as follows:
Agency Online PLC Total
GBP000 GBP000 GBP000 GBP000
Revenue 10,786 16,488 - 27,274
Less inter segment sales (223) (548) - (771)
------- ------- ------- -------
Revenues from external customers 10,563 15,940 - 26,503
------- ------- ------- -------
Results
Underlying operating profit 1,209 1,801 (510) 2,500
Restructuring
costs (131) - - (131)
------- ------- ------- -------
Profit from
operations 1,078 1,801 (510) 2,369
------- ------- ------- -------
Net finance
costs (18)
-------
Profit before
tax 2,351
Income tax expense (628)
Loss for the year from discontinued
operations (25)
-------
Profit for the
year 1,698
Agency Online PLC Total
GBP000 GBP000 GBP000 GBP000
Other segment information
Depreciation 217 534 - 751
Amortisation 54 148 - 202
------- ------- ------- -------
Major customers
During the year, Tangent had no customer that represented more
than 10% of revenues.
Online had no customer that represented more than 10% of that
segment's revenues.
Agency customers representing more than 10% of that segment's
revenue for the year were as follows:
Customer one 15%
Customer two 11%
Geographical information 2015 2014
GBP000 GBP000
------- -----------
Revenues from external customers
United Kingdom 24,032 23,226
Europe 2,167 3,151
Other countries 50 126
------- -----------
26,249 26,503
------- -----------
Non-current assets
United Kingdom 28,550 28,114
Australia - 5
------- -----------
28,550 28,119
------- -----------
Non-current assets for this purpose consist of property, plant
and equipment, intangible assets and deferred tax assets.
4. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following:
2015 2014
GBP000 GBP000
Profit from continuing operations attributable
to shareholders 334 1,723
Loss from discontinued operations attributable
to shareholders (122) (25)
------------------------------------------------ -------- --------
Profit attributable to shareholders 212 1,698
------------------------------------------------ -------- --------
2015 2014
Number Number
000 000
------------------------------------------------ -------- --------
Weighted average number of shares:
For basic earnings per share 277,062 278,341
Adjustment for options outstanding 8,176 8,902
For diluted earnings per share 285,238 287,243
------------------------------------------------ -------- --------
Pence per Pence per
Share Share
------------------------------ ---------- ----------
Earnings per share:
Basic (pence)
From continuing operations 0.12 0.62
From discontinued operations (0.04) (0.01)
From profit for the year 0.08 0.61
Diluted (pence)
From continuing operations 0.12 0.60
From discontinued operations (0.04) (0.01)
From profit for the year 0.08 0.59
------------------------------ ---------- ----------
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
A calculation is performed for the share options to determine
the number of shares that could have been acquired at fair value
based on the monetary value of the subscription rights attached to
the outstanding share options. The number of shares from this
calculation is compared with the number of shares that would have
been issued assuming the exercise of the options and the difference
is deemed to be the number of dilutive shares attributable to share
options.
5. Dividends 2015 2014
GBP000 GBP000
-------------------------------------------- ------- -------
Recommended final dividend for the year of
nil (2014: 0.24p) per share - 671
-------------------------------------------- ------- -------
The Directors do not recommend a final dividend in respect of
the year ending 28 February 2015.
2015 2014
GBP000 GBP000
-------------------------------------------------- ------- -------
Final dividend paid for the year of 0.24p (2014:
0.2p) per share 663 558
-------------------------------------------------- ------- -------
6. Intangible assets
Goodwill Software Other Total
assets intangible
assets
Group GBP000 GBP000 GBP000 GBP000
----------------------------- -------------------- ---------- ------------ -------
Cost
At 1 March 2013 24,801 810 117 25,728
Additions - 563 - 563
At 28 February 2014 24,801 1,373 117 26,291
Additions - 644 - 644
------------------------------ -------------------- ---------- ------------ -------
At 28 February 2015 24,801 2,017 117 26,935
------------------------------ -------------------- ---------- ------------ -------
Amortisation and impairment
At 1 March 2013 - 33 117 150
Amortisation during the
year - 202 - 202
------------------------------ -------------------- ---------- ------------ -------
At 28 February 2014 - 235 117 352
Amortisation during the
year - 295 - 295
At 28 February 2015 - 530 117 647
------------------------------ -------------------- ---------- ------------ -------
Net book value
At 28 February 2015 24,801 1,487 - 26,288
------------------------------ -------------------- ---------- ------------ -------
At 28 February 2014 24,801 1,138 - 25,939
------------------------------ -------------------- ---------- ------------ -------
The addition to software assets represents the acquisition and
development of software platforms for the group. These assets are
being amortised over their expected useful life, estimated to be 5
years.
Impairment of goodwill
Goodwill acquired in a business combination is allocated for
impairment testing to the cash-generating units (CGUs) that are
expected to benefit from that business combination.
Tangent has the following business segments:-
Online
This business segment includes printed.com, goodprint and
Ravensworth; and
Agency
This business segment includes Tangent Snowball and T/OD
(Tangent on Demand).
The above represents the lowest level within Tangent at which
goodwill is reviewed for impairment.
Tangent tests goodwill annually for impairment, or more
frequently if there are indications that goodwill might be
impaired.
The recoverable amounts of the CGU's are determined from
value-in-use calculations. The key assumptions for the value-in-use
calculations are those regarding the discount rates, growth rates
and expected changes to forecast profitability. These assumptions
have been revised in the year to take account of the current
economic environment. Management estimates discount rates using
pre-tax rates that reflect the current market assessments of the
time value of money and the risks specific to each CGU.
Future cash flows are derived from the most recent financial
budget approved by management for the next five years, beyond that
period cash flows are extrapolated using a growth rate of 3% (2014:
3%).
The rate used to discount forecast future cash flows for both
business segments is 8.5% (2014: 10%).
In 2015, no impairment charge has been made against goodwill for
either CGU (2014: GBPnil). Headroom in the Online CGU is GBP6.96
million and GBP4.11million in the Agency CGU.
Tangent has conducted a sensitivity analysis on the impairment
test of each CGU's carrying value with the following results:
-- The discount rate would need to increase to 11.4% to remove
the headroom in the Online CGU and to 10.5% to remove the headroom
in the Agency CGU.
-- Removing the long term growth rate for the Online CGU does
not result in any impairment and the rate would need to fall below
0.3% to create any impairment in the Agency CGU.
-- Cash flows over the next five years would need to reduce by
34% to remove the headroom in the Online CGU and by 26% to remove
the headroom in the Agency CGU.
7. Share capital
Number of ordinary Nominal value
1p shares
-----------------
2015 2014 2015 2014
000 000 GBP000 GBP000
------------------------- ---------- ---------- -------- -------
Allotted and fully paid
At 1 March 280,313 278,813 2,805 2,790
Issued in the year 954 1,500 8 15
------------------------- ---------- ---------- -------- -------
At 28 February 281,267 280,313 2,813 2,805
------------------------- ---------- ---------- -------- -------
The company has one class of ordinary share which carries no
right to fixed income, each share carries the right to one vote at
general meetings of the company.
At 28 February 2015 the number of shares in issue was
281,267,536 and at the date of this report 281,267,536 were in
issue.
8. Own shares
GBP000
Acquired during the year 379
Balance at 28 February
2015 379
----------------------------- --------
The own shares reserve represents the cost of shares in Tangent
Communications PLC purchased in the market and held in treasury.
The number of ordinary shares held in treasury by the company at 28
February 2015 was 3,945,000.
9. Cash generated from operations
2015 2014
Group GBP000 GBP000
-------------------------------------------------------- ----------- ----------
Profit before tax for the year 212 1,698
Income tax expense 122 628
Depreciation and amortisation of non-current assets 966 953
Loss on disposal of discontinued activities 57 -
Profit on sale of plant and equipment - (17)
Net interest charge 12 18
Share-based payment charge 10 183
-------------------------------------------------------- ----------- ----------
1,379 3,463
Movements in working capital
Increase in inventories (178) (9)
Decrease/(increase) in receivables 748 (113)
Decrease in payables and provisions (88) (409)
Cash generated from operations 1,861 2,932
-------------------------------------------------------- ----------- ----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR APMFTMBIBBAA
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