REG - dotDigital Group plc - Final Results <Origin Href="QuoteRef">DOTD.L</Origin> - Part 2
18/10/2016 07:05
- Part 2: For the preceding part double click ID:nRSR7605Ma
Periods beginning on or after 1 January 2015 1 July 2015
IFRS 9 Financial Instruments Finalised version, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition Periods beginning on or after 1 January 2018. 1 July 2018
IFRS 10 Consolidated financial statements Amendments regarding the application of the consolidation exceptions Periods beginning on or after 1 January 2016 1 July 2016
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
IFRS 12 Disclosure of interest in other entities Amendments regarding the application of the consolidation exceptions Periods beginning on or after 1 January 2016 1 July 2016
IFRS 14 Regulatory deferral accounts Original issue of standard Periods beginning on or after 1 January 2016 1 July 2016
IFRS 15 Revenue from contracts with customers Original issue of standard Periods beginning on or after 1 January 2018 1 July 2018
IFRS 16 Leases Original issue of standard Periods beginning on or after 1 January 2019 1 July 2019
IAS 1 Presentation of financial statements Amendments resulting from the disclosure initiative Periods beginning on or after 1 January 2016 1 July 2016
IAS 7 Statement of cash flows Disclosure initiatives Periods beginning on or after 1 January 2017 1 July 2017
IAS 12 Income taxes Amendments regarding the Recognition of deferred tax assets for unrealised losses Periods beginning on or after 1 January 2017 1 July 2017
IAS 27 Separate financial statements Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity's separate financial statements Periods beginning on or after 1 January 2016 1 July 2016
IAS 28 Investments in associates and joint ventures Amendments regarding the sale or contribution of assets between investor and its associate or joint venture. Amendments regarding the application of the consolidation exceptions Periods beginning on or after 1 January 2016 1 July 2016
IAS 38 Intangible assets Amendments regarding the clarification of acceptable methods of depreciation and amortisation Periods beginning on or after 1 January 2016 1 July 2016
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
2.
ACCOUNTING POLICIES - continued
IAS 16 Property, Plant and Equipment Amendments regarding the clarification of acceptable methods of depreciation and amortisation Periods beginning on or after 1 January 2016 1 July 2016
IAS 19 Employee benefits Amendments resulting from September 2014 Annual Improvements to IFRSs Periods beginning on or after 1 January 2016 1 July 2016
The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no
material impact on the financial statements of the Group.
The financial statements are presented in sterling (£), rounded to the nearest thousand pound.
Basis of consolidation
In the period ended 2009 the Company acquired via a share for share exchange the entire issued share capital of dotmailer
Limited, whose principal activity is that of web and email-based marketing.
Under IFRS 3 'Business combinations' the dotmailer Limited share exchange has been accounted for as a reverse acquisition.
Although these consolidated financial statements have been issued in the name of the legal parent, the Company it
represents in substance is a continuation of the financial information of the legal subsidiary, dotmailer Limited. The
following accounting treatment has been applied in respect of the reverse acquisition:
- The assets and liabilities of the legal subsidiary, dotmailer Limited, are recognised and measured in the consolidated
financial statements at their pre-combination carrying amounts, without restatement to their fair value;
- The retained reserves recognised in the consolidated financial statements for the beginning of the prior period reflect
the retained reserves of dotmailer Limited to 30 April 2008. However, in accordance with IFRS3 'Business combinations' the
equity structure appearing in the consolidated financial statements reflects the equity structure of the legal parent
dotdigital Group Plc, including the equity instruments issued under the share exchange to effect the business combination;
- A reverse acquisition reserve has been created to enable the presentation of a consolidated balance sheet which combines
the equity structure of the legal parent with the non-statutory reserves of the legal subsidiary;
- Comparative numbers are prepared on the same basis.
The following accounting treatment has been applied in respect of the acquisition of dotdigital Group Plc:
- The assets and liabilities of dotdigital Group Plc are recognised and measured in the consolidated financial statements
at their fair value at the date of acquisition.
- The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities assumed in a business combination are measured initially at their fair values at the date of
acquisition, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value
of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less
than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income
statement.
Subsidiaries
A subsidiary is an entity whose operating and financing policies are controlled by the Group. Subsidiaries are
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
consolidated from the date on which control was transferred to the Group. Subsidiaries cease to be consolidated from
the date the Group no longer has control. Intercompany transactions, balances and unrealised gains on transactions between
Group companies have been eliminated on consolidation.
As a result of applying reverse acquisition accounting since 30 January 2009, the consolidated IFRS financial information
of dotdigital Group Plc is a continuation of the financial information of dotmailer Limited.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the
ordinary course of the Group's activities. Revenue is shown net of value added tax returns, rebates and discounts after
eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that the future
economic benefits will flow to the entity. The Group bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of each arrangement.
The Group sells web-based marketing services to other businesses and services are either provided on a usage basis or fixed
price bespoke contract. Revenue from contracts are recognised under percentage of completion method based on a percentage
of services performed to date as a percentage of the total services to be performed.
Going concern
The Directors, at the time of approving the financial statements, have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the financial statements. Further detail is contained in the Business
review.
Operating profit
Operating profit is stated after charging operating expenses but before finance costs.
Dividends
Final dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the
period in which the dividends are approved by the Company's shareholders while interim dividends distributions are
recognised in the period in which the dividends are declared and paid.
Goodwill
Goodwill represents the excess of the fair value of the consideration over the fair values of the identifiable net tangible
and intangible assets acquired.
Under IFRS 3 "Business Combinations", goodwill arising on acquisitions is not subject to amortisation but is subject to
annual impairment testing. Any impairment is recognised immediately in the income statement and not subsequently reversed.
Investments in subsidiaries
Investments are held as non-current assets at cost less any provision for impairment. Where the recoverable amount of the
investment is less than the carrying amount, impairment is recognised.
Intangible assets
Intangible assets are recorded as separately identifiable assets and recognised at historical cost less any accumulated
amortisation. These assets are amortised over their useful economic lives four to five years, with the charge included in
administrative expenses in the income statement.
Intangible assets are reviewed for impairment annually. Impairment is measured by determining the recoverable amount of an
asset or cash generating unit (CGU) which is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or
CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the
smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows
of other assets or CGU.
- Domain names
Acquired domain names are shown at historical cost. Domain names have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of domain names over
their useful lives of four years.
- Software
Acquired software and websites are shown at historical cost. They have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using straight-line method to allocate the cost of software and
websites over their useful lives of four years.
- Product development
Product development expenditure is capitalised when it is considered that there is a commercially and technically viable
product, the related expenditure is separately identifiable and there is a reasonable expectation that the related
expenditure will be exceeded by future revenues. Following initial recognition, product developments are carried at cost
less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are
assessed to have a finite life of five years. Amortisation is charged on assets with finite lives, and until economic
benefit can be received and recognised, this expense is taken to the income statement and useful lives are reviewed on an
annual basis. Amortisation is charged from the point when the asset is available for use.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs
are recorded as intangible assets and amortised from the point at which they are ready for use on a straight-line basis
over their useful life.
Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as
intangible assets when the following criteria are fulfilled:
- It is technically feasible to complete the intangible asset so that it will be available for use or resale;
- Management intends to complete the intangible asset and use or sell it;
- There is an ability to use or sell the intangible assets;
- It can be demonstrated how the intangible asset will generate possible future economic benefits;
- Adequate technical, financial and other resource to complete the development and to use or sell the intangible asset are
available; and
- The expenditure attributable to the intangible asset during its development can be reliably measured.
Impairment of non-financial assets (excluding goodwill)
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the
asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of
the cash generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Property, plant and equipment
Tangible non-current assets are stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, only
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
when it is probable that future economic benefits are associated with the item will flow to the company and the cost of the
item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance
are charged to the income statement during the financial period in which they are incurred. Depreciation is provided at the
following rates in order to write off each asset over its estimated useful life and is based on the cost of assets less
residual value. Significant components of individual assets are assessed and if a component has a useful life that is
different from the remainder of that asset, that component is depreciated separately.
Short leasehold: over the term of the lease
Fixtures and fittings: 25% on cost
Computer equipment: 25% on cost
The assets' residual values and useful economic lives are reviewed and adjusted, if appropriate, at each reporting date. An
asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable value.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within
other (losses) or gains in the income statement.
Capital risk management
The Group manages its capital to ensure it is able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of cash
equivalents and equity attributable to the owners of the parent as disclosed in the statement of changes in equity.
Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement, to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.
Current tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules,
using tax rates enacted or substantially enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary difference will be utilised.
Deferred income tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date
and are expected to apply when the related deferred income asset is realised or deferred income tax liability is settled.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
Operating leases
Rent payable under operating leases is not recognised in the Group's statement of financial position. Such costs are
expensed on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part
of the total expense, over the term of the lease.
Financial instruments
Financial assets and financial liabilities are recognised on the statement of financial position when an entity becomes a
party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured
at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through
profit or loss are recognised immediately in the income statement.
- Financial assets
The Group's accounting policies for financial assets are set out below.
Management determine the classification of its financial assets at initial recognition depending on the purpose for which
the financial assets were acquired and, where allowed and appropriate, revaluate this designation at every reporting date.
All financial assets are recognised on a trade date when, and only when, the Group becomes a party to the contractual
provisions of an instrument. When financial assets are recognised initially, they are measured at fair value plus
transaction costs, except for those finance assets classified as at fair value through profit or loss ('FVTPL'), which are
initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets at FVTPL, 'held-to-maturity'
investments, 'available for sale' (AFS) financial assets and loans and receivables. The classification depends on the
nature and purpose of the financial assets and is determined at the time of recognition.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred.
At each reporting date, financial assets are reviewed to assess whether there is objective evidence of impairment. If any
such evidence exists, impairment loss is determined and recognised based on the classification of the financial asset.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
Loans and receivables (including trade receivables, prepayments, deposits and other receivables, cash and bank balances)
are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. At each
reporting date subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective
interest method, less any identified impairment losses. An impairment loss is recognised in the statement of comprehensive
income when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's
carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate.
Impairment losses are reversed in subsequent periods when an increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of
the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment
not been recognised.
- Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions,
and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value, having been within three months of maturity at acquisition. Bank overdrafts that
are repayable on demand and form an integral part of the Group's cash management are also included as a component of cash
and cash equivalents for the purpose of the consolidated statement of cash flows
- Trade receivables
Trade receivables are recognised initially at the lower of their original invoiced value and recoverable amount. A
provision is made when it is likely that the balance will not be recovered in full. Terms on receivables range from 30 to
90 days.
- Financial liabilities and equity
Financial liabilities and equity are recognised on the Group's statement of financial position when the Group becomes a
party to a contractual provision of an instrument. Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets
of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of transaction costs.
The Group's financial liabilities include trade payables and accrued liabilities.
- Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method. Terms on accounts payable range from 10 to 90 days.
Foreign currency risk
Currency risk is the risk that the holding of foreign currencies will affect the Group's position as a result of a change
in foreign currency exchange rates. The Group has no significant foreign currency risk as most of the Group's financial
assets and liabilities are denominated in functional currencies of relevant Group entities. Accordingly, no quantitative
market risk disclosures or sensitivity analysis for currency risks have been prepared.
The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
(a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet;
(b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the rate on the dates of the transactions); and
(c) all resulting exchange differences are recognised in other comprehensive income.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
2. ACCOUNTING POLICIES - continued
ACCOUNTING POLICIES - continued
Equity
Share capital is the amount subscribed for shares at their nominal value.
Share premium represents the excess of the amount subscribed for the share capital over the nominal value of the respective
shares net of share issue expenses.
Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.
The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance
with IFRS3 'Business combinations'.
Other reserves relate to the charge for share-based payments in accordance with IFRS2 'Share-based payments'.
Share-based payments
For equity-settled share-based payment transactions the Group, in accordance with IFRS 2 'Share-Based Payments' measures
their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments
granted. The fair value of those equity instruments is measured at the grant date using the trinomial method. The expense
is apportioned over the vesting period of the financial instrument and is based on the number which is expected to vest and
the fair value of those financial instruments at the date of grant. If the equity instruments granted vest immediately, the
expense is recognised in full.
Functional currency translation
- Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the entity operates (functional currency), which is mainly pounds sterling (£) and it is this currency
the financial statements are presented in.
- Transaction and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at the year end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Employee benefit costs
The Group operates a defined contribution pension scheme. Contributions payable by the Group's pension scheme are charged
to the income statement in the period in which they relate.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-maker, who is responsible for allocating resources and assessing performance of the operating segments as
identified by the Board of Directors.
Critical accounting adjustments
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
Judgements
(a) Capitalisation of development costs
Our business model is underpinned by our email and cross-channel marketing automation platform, dotmailer. Internal
activities are continually undertaken to enhance and maintain the product in a bid to stay ahead of our competition.
Management review the work of developers during the period and make the
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2014
2. ACCOUNTING POLICIES - continued
following judgements:
-Internal work relating to product development is reviewed against IAS 38 criteria and will be capitalised if management
feel the criteria have been met.
-Internal work relating to the maintenance of existing products is expensed to the income statement and accounted for in
payroll costs.
Estimates and assumptions
(a) Estimated impairment of goodwill
The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting
date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash
flow forecasts which have been discounted at 10%. The cash flow projections are based on the assumption that the Group can
realise projected sales. A prudent approach has been applied with no residual value being factored
Further details on the estimates and assumptions we make in our annual impairment testing of goodwill are included in note
11 to the Financial Statements. At the period end, based on the assumptions, there was no indication of impairment to the
carrying value of goodwill.
(b) Share-based compensation
Key management believe that there will not be only one acceptable choice for estimating the fair value of share-based
payment arrangements. The judgements and estimates that management apply in determination of the share-based compensation
are summarised below:
-Selection of a valuation model
-Making assumptions used in determining the variables used in a valuation model
i. expected life
ii. expected volatility
iii. expected dividend yield
iv. interest rate
Further detail on the estimates and assumptions we make in our share-based compensation are included in note 26 to the
financial statements. The charge made to income statement for period is also disclosed here.
(c) Depreciation and amortisation
The Group depreciates short leasehold, fixtures and fittings, computer equipment and amortises computer software,
internally generated development costs and domain names on a straight-line method over the estimated useful lives. The
estimated useful lives reflect the Directors' estimate of the periods that the Group intends to derive future economic
benefits from the use of the Group's short leasehold fixtures and fittings, computer equipment, computer software,
internally generated development costs and domain names.
(d) Bad debt provision
We perform ongoing credit evaluations of our customers and grant credit based upon past payment history, financial
condition and anticipated industry conditions. Customer payments are regularly monitored and a provision for doubtful
accounts is established based upon specific situations and overall industry conditions. Hence the provision is maintained
for potential credit losses based upon management's assessment of the expected collectability of all accounts receivable.
In making this assessment, management take into consideration (i) any circumstances of which we are aware regarding a
customer's inability to meet its financial obligations and (ii) our judgements as to potential prevailing economic
conditions in the industry and their potential impact on the Group's customers.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
3. SEGMENTAL REPORTING
The Group's single line of business is the provision of web-based marketing services. The chief operating decision-maker
considers the Group's only reportable segment to be by geographical location, this being UK, US and rest of the world
("RoW") operations as shown below:
30.06.2016
UK US RoW Total
£'000 £'000 £'000 £'000
Income statement
Revenue 22,056 3,022 1,848 26,926
Gross profits 19,298 2,565 1,668 23,531
Profit before income tax 4,244 504 1,467 6,215
Total comprehensive income attributable to the owners of the parent 3,398 539 1,442 5,379
Financial position
Total assets 27,410 1,014 530 28,954
Net current assets 17,791 756 443 18,990
Revenue from external customers is attributed to the geographical segments noted above based on the customers' location.
There was no customers who account for more than 10% revenue (2015: none).
30.06.2015
UK US RoW Total
£'000 £'000 £'000 £'000
Income statement
Revenue 18,274 1,860 1,232 21,366
Gross profits 16,676 1,602 796 19,074
Profit before income tax 3,476 971 796 5,243
Total comprehensive income attributable to the owners of the parent 2,895 968 796 4,656
Financial position
Total assets 21,591 819 - 22,410
Net current assets 12,964 660 - 13,624
In the year ending 30 June 2016, revenue from the US has been disclosed separately as it exceeded 10% of the Group's
revenue. The comparatives have thus been restated.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
4. EMPLOYEES AND DIRECTORS
30.6.16 30.6.15
£'000 £'000
Wages and salaries 9,667 7,711
Social security costs 1,036 871
Other pension costs 243 221
10,946 8,803
The average monthly number of employees during the year is as follows
30.6.16 30.6.15
Directors 7 7
Sales and Marketing product 100 84
Development and system engineers 43 48
Administration 54 47
204 186
During the year the Group also capitalised staff-related costs of £1,338,915 (2015: £1,549,066) in relation to internally generated development costs.
5. NET FINANCE INCOME
30.6.16 30.6.15
£'000 £'000
Finance income:
Deposit account interest 51 27
51 27
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
6. OPERATING PROFIT
Costs by nature
Profit from continuing operations has been arrived after charging/(crediting):-
30.6.16 30.6.15
£'000 £'000
Direct marketing 1,984 1,516
Outsourcing 172 415
Other costs 1,239 361
Total cost of sales 3,395 2,292
30.6.16 30.6.15
£'000 £'000
Staff related costs (inc Directors emoluments) - note 4 10,946 8,803
Operating leases: Land and buildings 865 834
Operating lease: Other 48 44
Audit remuneration 37 38
Amortisation of intangibles 1,330 1,159
Depreciation charge 450 397
Legal, professional and consultancy fees 289 417
Computer expenditure 1,236 828
Bad debts 801 103
Foreign exchange (gains)/losses (246) 61
Travelling 471 351
Office running 174 217
Other costs 966 606
Total administration costs 17,367 13,858
During the year the Group obtained the following services from the Group's auditor at costs detailed below:
30.6.16 30.6.15
£'000 £'000
Fees payable to the Company's auditor for the audit of Parent Company and consolidated financial statements 8 7
Fees payable to the Company's auditor for other services 25 27
- audit of Company subsidiaries
- non-audit fees: Tax and review of interim accounts 4 4
37 38
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
7. INCOME TAX EXPENSE
Analysis of the tax charge from continuing operations:
30.6.16 30.6.15
£'000 £'000
Current tax on profits for the year 514 262
Deferred tax on origination and reversal of timing differences 333 325
847 587
Factors affecting the tax charge:
30.6.16 30.6.15
£'000 £'000
Profit on ordinary activities before tax 6,215 5,243
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20.00% (2015: 20.75%) 1,243 1,088
Effects of:
Expenses not deductible 164 20
Research and development enhanced claim (670) (747)
Expenditure permitted on exercising options (465) (238)
Overseas tax (profits)/losses (15) (46)
Capital allowances in excess of depreciation 257 185
Total income tax 514 262
Deferred tax was calculated using the rate 19.75% (2015: 20%). For further details on deferred tax see note 22.
DOTDIGITAL GROUP PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 30 JUNE 2016
8. PROFIT/(LOSS) OF PARENT COMPANY
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent Company is not presented
as part of these financial statements. The parent Company's profit before exceptional items for the financial year was
£4,601,353 (2015: loss £318,852).
9. DIVIDENDS
Amounts recognised as distributions to equity holders in the period
30.6.16 30.6.15
£'000 £'000
Final dividend for year end 30 June 2016 of 0.357p (2015: 0.2p) per share 1,054 570
Proposed dividend for the year end 30 June 2016 of 0.84p (2015: 0.36p) per share 2,476 1,041
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The 0.84p is broken down between a general dividend of 0.43p and a special dividend of 0.41p.
10. EARNINGS PER SHARE
Earnings per share data is based on the consolidated profit using and the weighted average number of shares in issue of the
parent Company. Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of
all dilutive potential ordinary shares.
Reconciliations are as follows:-
30.6.16
Weighted
average Per share
From continuing operations Earnings number of Amount
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