REG - Elecosoft PLC - Preliminary Results <Origin Href="QuoteRef">ELCO.L</Origin> - Part 2
18/04/2016 07:05
- Part 2: For the preceding part double click ID:nRSR4450Va
Segment assets 17,575 17,293
Unallocated assets - -
Total Group assets 17,575 17,293
Segment liabilities 9,682 10,571
Unallocated liabilities - -
Total Group liabilities 9,682 10,571
Geographical, Product and sales channel information
Revenue by geographical area represents continuing operations revenue from
external customers based upon the geographical location of the customer.
Revenue by geographical destination is as follows:
2015 2014
£'000 £'000
UK 4,857 4,291
Scandinavia 5,950 6,605
Germany 2,308 2,447
Rest of Europe 1,359 1,404
Rest of World 786 425
15,260 15,172
Rest of World includes revenue from customers in the USA of £571,000 (2014:
£163,000)
Revenue by product group represents continuing operations revenue from
external customers.
Revenue by product group is as follows:
2015 2014
£'000 £'000
Project management 7,493 6,779
Site management 396 398
Estimating 2,557 2,885
Engineering 2,373 2,533
CAD/Design 1,001 1,036
Visualisation 1,440 1,541
15,260 15,172
The Group utilises resellers to access certain markets.. Revenue by sales
channel represents continuing operations revenue from external customers.
Revenue by sales channel is as follows:
2015 2014
£'000 £'000
Direct 14,236 14,462
Reseller 1,024 710
15,260 15,172
Non-current assets excluding deferred tax by geographical area represent the
carrying amount of assets based in the geographical area in which the assets
are located.
Non-current assets by geographical location are as follows:
2015 2014
£'000 £'000
UK 7,130 6,780
Scandinavia 4,350 4,902
Germany 1,040 1,147
Rest of Europe 44 -
Rest of World 1 -
12,565 12,829
Information about major customers
Revenues arising from sales to the Group's largest customer were below the
reporting threshold of 10% of Group revenue (2014: Below 10% reporting
threshold).
3. Exceptional items
Exceptional items represent income and costs considered necessary to be
separately disclosed by virtue of their size or nature:
2015 2014
£'000 £'000
Restructuring costs - (113)
Capital reduction expenses - (25)
- (138)
4. Operating profit
The continuing operations operating profit for the period is stated after
charging/(crediting) the following items.
2015 2014
£'000 £'000
Software product development 1,640 2,024
Depreciation of property, plant and equipment 174 187
Amortisation of intangible assets acquired 380 360
Amortisation of capitalised development costs 115 12
Profit on disposal of property, plant and equipment (18) (17)
Foreign exchange losses 85 58
Fees payable to the Company's auditor for:
The audit of the parent company and consolidated financial statements 35 47
Fees payable to the Company's auditor and its associates for other services:
The audit of the Company's subsidiaries 32 47
Other services 22 8
Operating lease rentals:
Plant, equipment and vehicles 47 144
Properties 359 247
Non-recurring items:
Directors termination payment 11 100
5. Employee information
The average number of employees during the period, including Directors, in
continuing operations was made up as follows:
2015 2014
number number
Sales and marketing 57 50
Client services 52 50
Software development 41 42
Management and administration 28 28
178 170
Staff costs during the period, including Directors, in continuing operations
amounted to:
2015 2014
£'000 £'000
Wages and salaries 6,279 6,546
Social security 1,255 1,381
Pension costs 379 370
Share-based payments 20 -
7,933 8,297
Less: Development staff costs capitalised (665) (553)
7,268 7,744
Pension costs relate to contributions to defined contribution pension schemes.
Development staff costs are charged to projects and capitalised if those
projects meet the criteria for capitalisation.
The remuneration of the Directors, who are the key management personnel of the
Group, is set out below:
2015 2014
£'000 £'000
Short-term employee benefits 643 647
Post-employment benefits 22 23
Termination benefits 11 100
Share based payments 20 -
Executive Directors 696 770
Fees - non-executive Directors 90 61
786 831
The emoluments of the highest paid Director were £361,000 (2014: £382,000).
Employers NIC payments in respect of the Directors remuneration was £95,000
(2014: £83,000)
The remuneration of the non-executive Directors is determined by the Board.
The non-executive Directors do not have service contracts but are appointed
for an initial term of three years, which may thereafter be renewed from year
to year. They do not participate in any of the Group's share based incentive
or pension schemes.
6. Net finance income/cost)
Finance income and costs from continuing operations is set out below:
2015 2014
£'000 £'000
Finance income:
Bank and other interest receivable 1 3
Finance costs:
Bank overdraft and loan interest (107) (209)
Finance leases and hire purchase contracts (14) (14)
Total net finance cost (120) (220)
7. Taxation
(a) Tax on profit on ordinary activities
The tax charge in the income statement from continuing operations is as
follows:
2015 2014
£'000 £'000
Current tax:
UK corporation tax on profits of the year 2 -
2 -
Foreign tax 121 153
Total current tax 123 153
Deferred tax:
Origination and reversal of temporary differences 74 20
Tax adjustments in respect of previous years 7 -
Total deferred tax 81 20
Tax charge in the income statement 204 173
Income tax for the UK has been calculated at the standard rate of UK
corporation tax of 20.25% effective from 1 April 2015 (2014: 21.49%) on the
estimated assessable profit for the period. Taxation for foreign companies is
calculated at the rates prevailing in the relevant jurisdictions.
(b) Reconciliation of continuing operations tax charge
The tax assessed on continuing operations accounting profit before income tax
for the year is the same as the standard rate of UK corporation tax of 20.25%
for the period under review. The reconciliation is explained below:
2015 2014
£'000 £'000
Profit on continuing operations before tax 1,006 686
Tax calculated at the average standard rate of UK corporation tax of 20.25% (2014: 21.49%) applied to profits before tax 204 147
Effects of:
Expenses not deductible for tax purposes 46 73
Research & development tax relief (94) (81)
Group relief/losses surrendered not paid 4 (13)
Non taxable statutory compensation (15) -
Deferred tax not recognised 39 31
Share option deduction 4 -
Prior year adjustments 7 -
Utilisation of losses (17) -
Tax rate differences in foreign jurisdictions 24 12
Other differences 2 4
Continuing operations tax charge for the year 204 173
(c) Unrecognised tax losses
The Group has tax losses of £762,000 (2014: £828,000) arising at one of its
operations in Germany for which no deferred tax asset has been recognised and
tax losses of £1,874,000 (2014: £2,127,000) arising in the UK. Deferred tax
un-provided in respect of losses in UK subsidiaries is £390,000 (2014:
£440,000). No deferred tax is recognised on the unremitted earnings of
overseas subsidiaries.
8. Discontinued operations
The trading results and profit on the disposal of the Swedish architectural
consultancy business net of costs of disposal in the twelve months to 31
December 2015 are reported under discontinued operations.
The results from discontinued operations which have been included in the
income statement are set out below:
2015 2014
£'000 £'000
Revenue 1,400 1,312
Cost of sales (717) (657)
Gross profit 683 655
Administrative expenses (685) (1,024)
Other operating costs (120) (259)
Operating loss before exceptionals (122) (628)
Exceptionals - 7,738
Operating (loss)/profit (122) 7,110
Finance cost (3) (8)
(Loss)/profit before tax (125) 7,102
Taxation on discontinued operations 22 (1,548)
(Loss)/profit for the period from discontinued operations before disposals (103) 5,554
Profit on disposals after tax 463 -
Profit for the period from discontinued operations 360 5,554
The net profit from the disposal of the Swedish architectural consultancy
business sold during the year and included in the income statement are set out
below:
2015 2014
£'000 £'000
Consideration on disposal 862 -
Net liabilities on disposal 17 -
Goodwill on disposal (395) -
Other disposal costs (21) -
Profit on disposal before tax 463 -
Tax on disposal of discontinued operations - -
Profit on disposal after tax 463 -
The cash consideration received on the disposal of the Swedish architectural
consultancy business before liabilities transferred and expenses was £862,000.
The net cash proceeds on the disposal after liabilities transferred and
expenses was £754,000.
The results from discontinued operations which have been included in the cash
flow statement are set out below:
2015 2014
£'000 £'000
Operating activities 92 (1,250)
Investing activities 54 960
Financing activities (124) (11)
Total cash flows 22 (301)
9. Basic and diluted earnings per share
The calculation of the basic and diluted earnings per ordinary share from
continuing operations and discontinued operations is based on the data below:
2015 2014
Continuing operations £802,000 £513,000
Discontinued operations before exceptionals £360,000 £(636,000)
Discontinued operations exceptionals £0 £6,190,000
Discontinued operations £360,000 £5,554,000
Total profit after taxation £1,162,000 £6,067,000
Basic weighted average number of shares 73,970,534 66,610,703
Dilutive effect of share options 882,000 -
Diluted weighted average number of shares 74,852,534 66,610,703
Basic earnings per ordinary share is calculated from continuing operations
profit after tax attributable to ordinary equity shareholders of the Company
and the weighted average number of shares in issue for the reporting period.
The basic earnings per share from discontinued operations is based on the
discontinued operations profit before exceptional items after tax attributable
to ordinary equity shareholders of the Company and the weighted average number
of shares in issue for the reporting period.
Basic earnings/(loss) per share 2015 2014
Continuing operations 1.1 p 0.8 p
Discontinued operations before exceptionals 0.5 p (1.0) p
Discontinued operations exceptionals - p 9.3 p
Discontinued operations 0.5 p 8.3 p
Total operations 1.6 p 9.1 p
Dilutive earnings per ordinary share is calculated by adjusting the weighted
average number of shares in issue for the reporting period to include the
assumed conversion of the dilutive share options outstanding at 31 December
2015.
Diluted earnings/(loss) per share 2015 2014
Continuing operations 1.1 p 0.8 p
Discontinued operations before exceptionals 0.5 p (1.0) p
Discontinued operations exceptionals - p 9.3 p
Discontinued operations 0.5 p 8.3 p
Total operations 1.6 p 9.1 p
Shares held by the Employee Share Ownership Trust are excluded from the
weighted average number of shares in the period.
Notes
1. The financial information in this announcement, which is audited, does
not constitute statutory accounts within the meaning of section 435 of the
Companies Act 2006. Statutory accounts of the Company, on which the Auditors
will report, will be delivered to the Registrar of Companies. The comparative
figures for the 12 months to 31 December 2014 have been taken from, but do not
constitute, the Company's statutory financial statements for that financial
year.
2. The Group's activities, together with the factors likely to affect its
future development, performance and position are set out in the Operating
Review and Financial Review.
The Groups' clients include many top contractors in the building and
construction sector in the UK, Sweden, Germany, Benelux and the United States.
The software products provided by the Group are reasonably embedded in their
client's core operations and 48% (2014 restated: 48%) of the Group's revenue
is from recurring revenue contracts. These maintenance contracts are renewed
throughout the year although there is a slightly greater weighting in the
fourth quarter. For these reasons, the Group has good visibility on any
potential deterioration in its trading outlook and potential risk to the
business.
Historically, there is a low level of maintenance cancellations each year and
the Board closely monitors clients that are potentially at risk of
cancellation as well as the pipeline of new business.
The Group has both cash and undrawn credit facilities available to support its
business operations and therefore the Board believes that the Group is
well-positioned to manage the business risks. Revenue, operating profit and
cash flow budgets have been prepared at business unit level and as a result,
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operation for the foreseeable future. Accordingly,
the Group continues to adopt the going concern basis in preparing its
consolidated financial statements
3. The information herein has been prepared on the basis of the accounting
policies adopted for the year ended 31 December 2015, set out in the Company's
Annual Report and Accounts and as previously disclosed in the Company's Annual
Report and Accounts for the year ended 31 December 2014.
4. The Annual General Meeting of Elecosoft plc will be held at Founders'
Hall, 1 Cloth Fair, London EC1A 7HT on 26 May 2016 at 12 noon.
5. The Annual Report and Accounts for the year ended 31 December 2015 will
be sent to shareholders by 29 April 2016 and will be available to view on the
Company's website, www.elecosoft.com, from that date.
This information is provided by RNS
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