REG - Elecosoft PLC - Interim Results <Origin Href="QuoteRef">ELCO.L</Origin> - Part 2
21/09/2016 07:06
- Part 2: For the preceding part double click ID:nRSU3856Ka
Development costs capitalised (175) (293) (665)
Total development costs (1,433) (1,202) (2,305)
Operating profit 601 557 1,126
Amortisation of intangible assets 283 236 495
Depreciation charge 79 88 174
EBITDA 963 881 1,795
Adjusted operating profit represents operating profit before expensed product
development costs and intangible asset amortisation. Development project costs
are expensed as incurred unless they meet the accounting policy requirements
for capitalisation. The projects capitalised in the six months to 30 June 2016
are explained in the Chairman's Statement and the accounting policy
requirements are set out on page 41 of the 2015 annual report and accounts.
Geographical, product and sales channel information
Revenue by geographical segment represents revenue from external customers
based upon the geographical location of the customer.
six months to 30 June Year ended
(restated) 31 December
2016 2015 2015
£'000 £'000 £'000
UK 2,825 2,391 4,857
Scandinavia 3,451 3,175 5,950
Germany 1,425 1,201 2,308
Rest of Europe 717 604 1,359
Rest of World 351 577 786
8,769 7,948 15,260
Revenue by product group represents revenue from external customers.
six months to 30 June Year ended
(restated) 31 December
2016 2015 2015
£'000 £'000 £'000
Project management 4,272 3,988 7,493
Site management 229 199 396
Estimating 1,507 1,315 2,557
Engineering 1,389 1,161 2,373
CAD/Design 573 563 1,001
Visualisation 799 722 1,440
8,769 7,948 15,260
The Group utilises resellers to access certain markets. Revenue by sales
channel represents revenue from external customers.
six months to 30 June Year ended
(restated) 31 December
2016 2015 2015
£'000 £'000 £'000
Direct 8,273 7,249 14,236
Reseller 496 699 1,024
8,769 7,948 15,260
5. Operating profit
Operating profit for the period is after charging the following items:
Year ended
six months to 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Software product development 1,258 909 1,640
Directors termination payment 109 11 11
Foreign exchange (gains)/losses (10) 31 85
1,357 951 1,736
6. Net finance (cost)/income
Finance income and costs disclosed in the income statement is set out below:
Year ended
six months to 30 June 31 December
2016 2015 2015
£'000 £'000 £'000
Finance income:
Bank and other interest receivable 2 - 1
Finance costs:
Bank overdraft and loan interest (41) (60) (107)
Finance leases and hire purchase contracts (5) (7) (14)
Total net finance cost (44) (67) (120)
7. Earnings per share
The calculations of the earnings per share are based on profit after tax
attributable to the ordinary equity shareholders of the Company and the
weighted average number of shares in issue for the reporting period.
Year ended
six months to 30 June 31 December
2016 2015 2015
Continuing operations £431,000 £403,000 £802,000
Discontinued operations £0 £12,000 £360,000
Total profit after taxation £431,000 £415,000 £1,162,000
Basic weighted average number of shares 73,970,534 73,970,534 73,970,534
Dilutive effect of share options 294,000 675,000 882,000
Diluted weighted average number of shares 74,264,534 74,645,534 74,852,534
Basic earnings/(loss) per share
Continuing operations 0.6 p 0.6 p 1.1 p
Discontinued operations - p - p 0.5 p
Total operations 0.6 p 0.6 p 1.6 p
Diluted earnings/(loss) per share
Continuing operations 0.6 p 0.6 p 1.1 p
Discontinued operations - p - p 0.5 p
Total operations 0.6 p 0.6 p 1.6 p
Shares held by the Employee Share Ownership Trust are excluded from the
weighted average number of shares in the period.
8. Dividends
The Board have recommended the payment of an interim dividend of 0.15p per
ordinary share (2015 H1: 0.0p)
9. Goodwill
The increase in goodwill since 31 December 2015 includes £18,000 of goodwill
acquired on the acquisition of Elecosoft BV in the Netherlands and £67,000 of
exchange gains on the revaluation of goodwill denominated in foreign
currencies.
10. Other intangible assets
Other intangible assets comprise capitalised development costs, acquired
customer relationships and purchased intangible assets. Additions in the six
months to 30 June 2016 represent purchased intangible assets of £43,000 (2015:
£50,000), internal development costs capitalised of £175,000 (2015: £293,000)
and intangible assets acquired on the acquisition of Elecosoft BV in the
Netherlands of £44,000. Internal development relates to software development
projects that meet the accounting policy criteria for capitalisation.
11. Borrowings
The bank loans and overdrafts are repayable as follows:
at 30 June at 30 June at 31 December
2016 2015 2015
£'000 £'000 £'000
In one year or less 1,291 1,105 1,424
Between one and two years 597 750 750
Between two and five years - 938 222
1,888 2,793 2,396
12. Accruals and deferred income
at 30 June at 30 June at 31 December
2016 2015 2015
£'000 £'000 £'000
Accruals 1,696 1,497 1,360
Deferred income 4,202 3,528 3,708
5,898 5,025 5,068
Deferred income represents income from software maintenance and support
contracts and is taken to revenue in the income statement on a straight line
basis in line with the service and obligations over the term of the contract.
13. Acquisitions
On 4 January 2016 the Group acquired the business and certain assets of Asta
BV, of The Netherlands, enhancing its control of the Dutch market for a total
consideration of £63,000. The consideration comprised the payment of £48,000
in cash from the Group's existing resources and deferred consideration of
£15,000 payable on the successful collection of the annual maintenance
renewals invoiced in December 2015.
An analysis of the fair value of the Asta BV net assets acquired and the fair
value of the consideration paid is set out below:
Book value Fair value adjustments Provisional fair value
£'000 £'000 £'000
Customer relationships 31 - 31
Intellectual property 12 - 12
Property, plant and equipment 2 - 2
Net assets 45 - 45
Goodwill 18
Total consideration 63
Satisfied by:
Cash 48
Deferred purchase consideration 15
63
Goodwill contains certain intangible assets that cannot be individually,
separately and reliably measured by the acquirer. These items include the
value of the management and workforce together with synergies that are
expected to be gained from being part of the Group.
14. Related Party Disclosures
Transactions between Group undertakings, which are related parties, have been
eliminated on consolidation and are not disclosed in this note.
The Directors of the Company had no material transactions with the Company
during the six months to 30 June 2016, other than a result of service
agreements. An amount of £18,000 (2015: £18,000) was paid to JHB Ketteley & Co
Limited under a lease for occupation by the Group of 66 Clifton Street,
London, EC2A 4HB and £3,000 (2015: £3,000) for a contribution to the office
costs at Burnham-on-Crouch.
An amount of £40,000 was paid to JHB Ketteley relating to deferred salary
unpaid at 31 December 2015. JHB Ketteley deferred £38,000 (2015: £nil) of his
salary in the six months to June 2016. The deferred salary unpaid at 30 June
2016 is £38,000. (2015: £nil)
This information is provided by RNS
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