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ESCH - Escher Group News Story

189.5p 0.0  0.0%

Last Trade - 15/11/17

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £14.1m
Position in Universe th / 1807

Escher Group Hldgs - Final Results - Part 2

Tue 7th March, 2017 7:00am
- Part 2: For the preceding part double click  ID:nRSG6753Ya 

interest at floating rates based on daily bank deposit
rates. Short-term deposits are made for varying periods depending on the
immediate cash requirements of the Group and earn interest at the respective
short-term deposit rates. 
 
The Group's currency exposure is set out below. Such exposure comprises the
cash and cash equivalents of the Group that are denominated other than in US
Dollars. As at 31 December 2016 these exposures were as follows: 
 
                                          2016US$'000  2015 US$'000  
 Non-US Dollar denominated cash balances                             
 Euro                                     2,228        1,150         
 Sterling                                 236          231           
 Singapore Dollar                         100          128           
 South African Rand                       9            16            
 Total non-US Dollar                      2,573        1,525         
 
 
12 Investments in equity instruments and loan notes 
 
Available-for-sale financial assets include the following classes of financial
assets: 
 
                                             Book Value    Fair Value   
                                2016US$'000  2015 US$'000  2016US$'000  2015 US$'000  
 Non-current assets                                                                   
 Investments carried at cost    495          -             -            -             
 Convertible loan notes         251          -             251          -             
                                746          -             251          -             
 
 
Investments are designated as available-for-sale financial assets if they do
not have fixed maturities and fixed or determinable payments, and management
intends to hold on to them for the medium to long-term. The financial assets
are presented as non-current assets unless they mature, or management intends
to dispose of them within 12 months of the end of the reporting period. 
 
In 2016, the Group made investments in the ordinary shares of two companies
(Deposify Limited and Circit Limited) of US$459,000 in consideration for the
provision of services and licence software. In addition to these investments,
the Group invested in convertible loan notes in both these companies in amount
of US$251,000. These loan notes will be convertible into Ordinary A shares
when agreed conditions have been met. 
 
To determine if an available-for-sale financial asset is impaired, the group
evaluates the duration and extent to which the fair value of the asset is less
than its cost, and the financial health of and short-term business outlook for
the investee. The group determined that there has been no decline in fair
value of the convertible loan notes or the cost of the investments as at year
end 31 December 2016. 
 
13 Trade and other payables 
 
                                                         
                                                         2016US$'000  2015 US$'000  
 Current                                                                            
 Trade payables                                          243          383           
 Amounts owed to subsidiaries                            -            -             
 Accruals                                                1,220        1,262         
 Other creditors including tax and social insurance      532          387           
 Deferred revenue                                        3,965        4,245         
                                                         5,960        6,277         
 
 
Amounts owed to subsidiary companies are unsecured and interest free. 
 
                                                                   
                                                                   2016US$'000  2015 US$'000  
 Other creditors including tax and social insurance comprise:                                 
 Income tax deducted under PAYE                                    303          210           
 Pay related social insurance                                      115          57            
 Other creditors                                                   114          120           
                                                                   532          387           
 
 
14 Borrowings 
 
                           Book value   Fair value    
                           2016US$'000  2015 US$'000  2016US$'000  2015 US$'000  
 Non-current liabilities                                                         
 Bank loans                5,000        6,000         4,730        5,796         
 Deferred financing costs  (46)         (156)         (46)         (156)         
 Borrowings                4,954        5,844         4,684        5,640         
 Current liabilities                                                             
 Bank loans                1,000        4,000         1,000        4,000         
 Deferred financing costs  (61)         (89)          (61)         (89)          
 Borrowings                939          3,911         939          3,911         
 Total borrowings          5,893        9,755         5,623        9,551         
 
 
On 9 October 2013, the Group agreed a revised banking facility with Bank of
Ireland Corporate Banking comprising a US$9.0 million five-year term loan
facility and a revolving twelve-month facility for US$3.0 million, which was
undrawn at year end (2015: fully drawn). The amended term loan is amortising
to October 2018. 
 
All of the Group's borrowings are denominated in US Dollars. 
 
Maturity of financial borrowings 
 
The maturity profile of the carrying amount of the Group's borrowings is set
out below: 
 
                                 Within1 yearUS$'000  Between1 and 2 yearsUS$'000  Between2 and 5 yearsUS$'000  After5 yearsUS$'000  TotalUS$'000  
 Group                                                                                                                                             
 Bank loans                      4,000                1,000                        5,000                        -                    10,000        
 Deferred financing              (89)                 (89)                         (67)                         -                    (245)         
 Borrowings at 31 December 2015  3,911                911                          4,933                        -                    9,755         
 Bank loans                      1,000                5,000                        -                            -                    6,000         
 Deferred financing              (61)                 (46)                         -                            -                    (107)         
 Borrowings at 31 December 2016  939                  4,964                        -                            -                    5,893         
 
 
Borrowings are secured by fixed and floating charges over all the Group's
assets, including the guarantee of the holding Company. 
 
15 Cash generated from operations 
 
                                              2016US$'000  2015US$'000  
 Profit before tax                            2,378        1,058        
 Adjustments for:                                                       
 Depreciation                                 282          372          
 Amortisation of intangible assets            1,941        1,845        
 Amortisation of deferred financing           138          135          
 Finance income                               (2)          (2)          
 Finance costs                                352          463          
 Employee share based payments                281          131          
 Effect of foreign exchange                   (11)         623          
 Management fee                               -            -            
 Non-cash revenue transactions (Note 12)      (495)        -            
 Changes in working capital                                             
 Decrease in trade and other receivables      342          3,054        
 Decrease in trade and other payables         (379)        (1,960)      
 Cash generated from operations               4,827        5,719        
 
 
16 Share capital and share premium 
 
 Authorised share capital                                  Number of ordinary shares  Ordinary sharesUS$'000  TotalUS$'000  
 Equity share capital                                                                                                       
 At 1 January 2015, 31 December 2015 and 31 December 2016                                                                   
 A ordinary shares of E0.005 each                          201,000,000                1,395                   1,395         
 
 
 Issued share capital                     Number ofshares  Equity share capital (presentedas equity)US$'000  SharepremiumUS$'000  TotalUS$'000  
 A ordinary shares of E0.005 each                                                                                                               
 At 1 January 2015                        18,689,070       128                                               26,909               27,037        
 Shares issued during the financial year  17,501           -                                                 -                    -             
 At 31 December 2015                      18,706,571       128                                               26,909               27,037        
 Shares issued during the financial year  24,269           -                                                 -                    -             
 At 31 December 2016                      18,730,840       128                                               26,909               27,037        
 
 
During 2016, 24,269 shares (2015: 17,501) were exercised during the year as
part of the Group's share based payment scheme. For further details, please
see note 17. 
 
17 Share based payments 
 
In 2016, 360,000 options were granted through the Company's share option
scheme to selected employees (2015: 44,228). The options were granted in one
tranche with an exercise price of US$0.014, 180,000 of which vest in 2017,
2018 and 2019, with the remaining 180,000 options vesting when various market
share price milestones are reached. The Group has no legal or constructive
obligation to repurchase or settle the options in cash. Under the main share
option plan the options have a seven-year life from their date of vesting.
Movements in the number of share options outstanding and their related
weighted average exercise prices are as follows: 
 
                 2016                                            2015      
                 Average exercise price in US$ per share option  Options   Average exercise price in US$ per share option  Options   
 At 1 January    1.794                                           491,645   1.956                                           485,095   
 Granted         0.014                                           360,000   0.005                                           44,228    
 Forfeited       3,887                                           (28,685)  3.310                                           (20,177)  
 Exercised       0.007                                           (24,269)  0.007                                           (17,501)  
 At 31 December  0.965                                           798,691   1.794                                           491,645   
 
 
Out of the 798,691 outstanding options (2015: 491,645 options), 438,692
options (2015: 387,666) were exercisable at 31 December 2016. 
 
Share options outstanding at the end of the year have the following expiry
date and exercise prices: 
 
 Grant - vest  Vesting year                  Exercise price in US$ pershare options    Share options  
               2016                          2015                                    
 2012          2013                          0.007                                     61,012         66,737   
               2014                          0.007                                     63,845         69,570   
               2015                          0.007                                     78,932         84,657   
 2013-16       2014                          3.887                                     62,934         74,663   
               2015                          3.887                                     67,417         71,645   
               2016                          3.887                                     67,417         80,145   
 2015-16       2015                          0.006                                     10,134         17,228   
               2016                          0.005                                     27,000         27,000   
 2016-19       2017                          0.014                                     60,000         -        
               2018                          0.014                                     60,000         -        
               2019                          0.014                                     60,000         -        
 2016-         subject to market conditions  0.014                                     180,000        -        
                                                                                       798,691        491,645  
 
 
For the 180,000 options granted and vesting over the next three years: The
weighted average fair value of options granted during the period determined
using the Black-Scholes valuation model was US$2.7437 per option. The
significant inputs into the model were the weighted average share price of
US$2.633 at the grant date, the exercise price shown above, dividend yield of
nil, an expected option life of three years, volatility of 41.76% based on the
past movement in the share price and an annual risk-free interest rate of
4.25%. Where awards are granted with market conditions, the services received
from an employee (who satisfies all other vesting conditions) are recognised,
irrespective of whether the market conditions are satisfied. The possibility
that the share price targets might not be achieved is taken into account when
estimating the fair value of the options at grant date. The fair value of the
180,000 options granted with market conditions attached has been considered to
be nil. See note 8 for the total expense recognised in the income statement
for share options granted to Directors and employees. 
 
18 Earnings per share 
 
Basic earnings per share amounts are calculated by dividing profit for the
year attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year. 
 
Diluted earnings per share amounts are calculated by dividing the profit
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on the conversion of
all the dilutive potential ordinary shares into ordinary shares. 
 
The following reflects the income and share data used in the basic and diluted
earnings per share computations. 
 
                                                          2016US$'000  2015US$'000  
 Profit attributable to ordinary shareholders             1,867        426          
                                                          Number       Number       
 Weighted average number of shares used in basic EPS      18,714,690   18,699,923   
 Effects of:                                                                        
 Employee share options                                   300,875      265,444      
 Weighted average number of shares used in diluted EPS    19,015,565   18,965,367   
 Basic earnings per share (in US$ cents per share)        10.0         2.3          
 Diluted earnings per share (in US$ cents per share)      9.8          2.2          
 
 
19 Subsequent events 
 
There were no significant subsequent events since 31 December 2016. 
 
This information is provided by RNS
The company news service from the London Stock Exchange
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