REG - Maintel Holdings PLC - Final Results <Origin Href="QuoteRef">MAIH.L</Origin> - Part 3
20/03/2017 07:06
- Part 3: For the preceding part double click ID:nRST8724Zb
Operating profit 7 3,027 4,415
Financial expense (net) 8 (920) (264)
Profit before taxation 2,107 4,151
Taxation expense 9 (13) (69)
Profit for the period and attributable to owners of the parent 2,094 4,082
Other comprehensive (expense)/income for the period
Exchange differences on translation of foreign operations (40) 41
Total comprehensive income for the period 2,054 4,123
Earnings per share
Basic 11 16.0p 38.0p
Diluted 11 15.8p 37.5p
Total comprehensive income for the period
2,054
4,123
Earnings per share
Basic
11
16.0p
38.0p
Diluted
11
15.8p
37.5p
The results above for both periods are in respect of continuing operations.
The notes following the consolidated statement of cash flows form part of these consolidated financial statements.
Consolidated statement of financial position
at 31 December 2016
2016 2016 2015 2015
Note £000 £000 £000 £000
Non current assets
Intangible assets 14 63,152 18,132
Property, plant and equipment 16 3,293 673
66,445 18,805
Current assets
Inventories 17 4,882 1,298
Trade and other receivables 18 29,371 11,040
Cash and cash equivalents 10,884 2,784
Total current assets 45,137 15,122
Total assets 111,582 33,927
Current liabilities
Trade and other payables 19 50,096 20,276
Current tax liabilities 527 257
Borrowings 20 - 2,000
Total current liabilities 50,623 22,533
Non-current liabilities
Deferred tax liability 21 2,020 834
Borrowings 20 30,688 4,000
Total non-current liabilities 32,708 4,834
Total liabilities 83,331 27,367
Total net assets 28,251 6,560
Equity
Issued share capital 23 142 108
Share premium 24 24,354 1,169
Other reserves 24 79 119
Retained earnings 24 3,676 5,164
Total equity 28,251 6,560
The consolidated financial statements were approved and authorised for issue by the board on 17 March 2017 and were signed
on its behalf by:
M Townsend
Director
The notes following the consolidated statement of cash flows form part of these consolidated financial statements.
Consolidated statement of changes in equity
for the year ended 31 December 2016
Share capital Share premium Other reserves Retained earnings Total
Note £000 £000 £000 £000 £000
At 1 January 2015 107 1,116 78 3,703 5,004
Profit for the period - - - 4,082 4,082
Other comprehensive income:
Foreign currency translation differences - - 41 - 41
Total comprehensive income for the period - - 41 4,082 4,123
Dividend 10 - - - (2,621) (2,621)
Issue of new ordinary shares 1 53 - - 54
At 31 December 2015 108 1,169 119 5,164 6,560
Profit for the period - - - 2,094 2,094
Other comprehensive income:
Foreign currency translation differences - - (40) - (40)
Total comprehensive income for the period - - (40) 2,094 2,054
Dividend 10 - - - (3,679) (3,679)
Issue of new ordinary shares 23 34 23,966 - - 24,000
Share issue costs - (781) - - (781)
Grant of share options - - 97 97
At 31 December 2016 142 24,354 79 3,676 28,251
At 31 December 2016
142
24,354
79
3,676
28,251
The notes following the consolidated statement of cash flows form part of these consolidated financial statements.
Consolidated statement of cash flows
for the year ended 31 December 2016
Year to 31 December 2016 Year to 31 December 2015
£000 £000
Operating activities
Profit before taxation 2,107 4,151
Adjustments for:
Intangibles amortisation 4,733 2,235
Share based payment charge 97 -
Profit on sale of fixed asset - 4
Depreciation charge 598 191
Interest received (3) (1)
Interest payable 923 265
Operating cash flows before changes in working capital 8,455 6,845
(Increase)/decrease in inventories (949) 138
Decrease in trade and other receivables 990 1,379
Increase/(decrease) in trade and other payables 2,328 (533)
Cash generated from operating activities (see sub analysis below) 10,824 7,829
Cash generated from operating activities excluding exceptional costs 15,064 8,713
Exceptional cost - excluding acquisition legal and professional costs below (note 12) (1,725) (884)
Cash generated from operating activities excluding acquisition legal and professional costs 13,339 7,829
Exceptional cost - acquisition legal and professional costs (2,515) -
Cash generated from operating activities 10,824 7,829
Tax paid (236) (1,048)
Net cash flows from operating activities 10,588 6,781
Investing activities
Purchase of plant and equipment (438) (554)
Purchase of software (132) -
Purchase price in respect of business combination (47,028) -
Net cash acquired with subsidiary undertaking 1,595 -
(45,433) -
Interest received 3 1
Net cash flows from investing activities (46,000) (553)
Financing activities
Proceeds from borrowings 31,000 -
Repayment of borrowings (6,000) (4,000)
Interest paid (628) (265)
Issue of new ordinary shares 24,000 54
Share issue costs (781) -
Issue costs of debt (360) -
Equity dividends paid (3,679) (2,621)
Net cash flows from financing activities 43,552 (6,832)
Net increase/(decrease) in cash and cash equivalents 8,140 (604)
Cash and cash equivalents at start of period 2,784 3,347
Exchange differences (40) 41
Cash and cash equivalents at end of period 10,884 2,784
Cash and cash equivalents at end of period
10,884
2,784
The notes following the consolidated statement of cash flows form part of these consolidated financial statements.
Notes forming part of the consolidated financial statements
for the year ended 31 December 2016
1 General information
Maintel Holdings Plc is a public limited company incorporated and domiciled in the UK, whose shares are publicly traded on
the Alternative Investment Market (AIM). Its registered office and principal place of business is 160 Blackfriars Road,
London SE1 8EZ.
2 Accounting policies
The principal policies adopted in the preparation of the consolidated financial statements are as follows:
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards,
International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards
Board (IASB) as adopted by the European Union ("adopted IFRSs"), IFRIC interpretations and with those parts of the
Companies Act 2006 applicable to companies preparing their accounts in accordance with adopted IFRSs.
From 1 January 2016, the Group has reviewed its mobile revenue recognition policy, and concluded to change its policy
relating to the recognition of advance commissions received from network operators. There is no material difference in the
financial statements as a result of adopting the new revenue recognition policy.
(b) Basis of consolidation
The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they
formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all
three of the following elements are present: power over the investee, exposure to variable returns from the investee, and
the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these elements of control.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the
consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities
are initially recognised at their fair values at the acquisition date. The acquisition related costs are included in the
consolidated statement of comprehensive income on an accrual basis. The results of acquired operations are included in the
consolidated statement of comprehensive income from the date on which control is obtained until the date on which control
ceases.
(c) Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and can be
reliably measured.
Revenue represents sales to customers at invoiced amounts and commissions receivable from suppliers, less value added tax.
Managed services and technology
Amounts invoiced in advance in respect of managed service contracts are deferred and released to the consolidated statement
of comprehensive income on a straight line basis over the period covered by the invoice.
Technology revenues from the supply of hardware and software are recognised at the time the risks and rewards of ownership
pass to the customer. Professional services revenues are recognised based on an estimate of stage of completion for each
project at the reporting date. The estimate is derived by the application of judgement and tracked progress of work
performed on each project at the reporting date relative to the total value of each project.
Network services
Revenues for network services are comprised of call traffic, line rentals and data services, which are recognised on an
accruals basis, for services provided up to the reporting date. Amounts invoiced in advance relating to periods after the
reporting date are deferred and recognised as deferred income.
Mobile
Connection commission received from the mobile network operators on the fixed line revenues are spread over the course of
the customer contract term which has changed from the previous policy whereby revenue was recognised on an advance basis.
The customer overspend and bonus payments are recognised monthly, which are also payable by the network operators on a
monthly basis.
(d) Operating leases
Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an "operating
lease"), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a
straight-line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the
rental expense over the lease term on a straight-line basis.
Rentals receivable under operating leases are credited to the consolidated statement of comprehensive income on a
straight-line basis over the term of the lease. The aggregate cost of lease incentives offered is recognised as a reduction
of the rental income over the lease term on a straight-line basis.
(e) Employee benefits
The Group contributes to a number of defined contribution pension schemes in respect of certain of its employees, including
those established under auto-enrolment legislation. The amount charged in the consolidated statement of comprehensive
income represents the employer contributions payable to the schemes in respect of the financial period. The assets of the
schemes are held separately from those of the Group in independently administered funds.
The cost of all short term employee benefits is recognised during the period the employee service is rendered.
Holiday pay is expensed in the period in which it accrues.
(f) Redundancy costs
Redundancy costs are those costs incurred from the date of communication of the restructuring decision and plan has been
started with the relevant employee or group of employees affected.
(g) Interest
Interest income and expense is recognised on an accruals basis.
(h) Taxation
Current tax is the expected tax payable on the taxable income for the year, together with any adjustments to tax payable in
respect of previous years.
Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for differences
arising on:
· the initial recognition of goodwill;
· the initial recognition of an asset or liability in a transaction which is not a business combination and at the
time of the transaction affects neither accounting nor taxable profit; and
· investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it
is probable that the difference will not reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is more probable than not that future taxable profits and
capital allowances will be available against which the asset can be utilised.
Management judgement is used in determining the amount of deferred tax asset that can be recognised, based upon the likely
timing and level of future taxable profits together with future tax planning strategies.
The amount of the deferred tax asset or liability is measured on an undiscounted basis and is determined using tax rates
that have been enacted or substantively enacted by the date of the consolidated statement of financial position and are
expected to apply when the deferred tax assets/liabilities are recovered/settled.
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets
and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of
deferred tax assets or liabilities are expected to be settled or recovered.
(i) Dividends
Dividends unpaid at the reporting date are only recognised as a liability at that date to the extent that they are
appropriately authorised and are no longer at the discretion of the Company. Proposed but unpaid dividends that do not meet
these criteria are disclosed in the notes to the consolidated financial statements.
(j) Intangible assets
Goodwill
Goodwill represents the excess of the fair value of the consideration of a business combination over the acquisition date
fair value of the identifiable assets, liabilities and contingent liabilities acquired; the fair value of the consideration
comprises the fair value of assets given. Direct costs of acquisition are recognised immediately as an expense.
Goodwill is capitalised as an intangible asset and carried at cost with any impairment in carrying value being charged to
the consolidated statement of comprehensive income.
Customer relationships
Customer relationships are stated at cost, or fair value where acquired through a business combination, less accumulated
amortisation. Where these assets have been acquired through a business combination, the cost
is the fair value allocated in the acquisition accounting.
Customer relationships are amortised over their estimated useful lives of (i) six years or seven years in respect of
managed service contracts, (ii) seven years or eight years in respect of network services and mobile contracts.
Product platform
The product platform is stated at fair value as it is acquired through a business combination, less accumulated
amortisation. As these assets have been acquired through a business combination, the cost is the fair value allocated in
the acquisition accounting.
The product platform is amortised over its estimated useful life of eight years.
Brand
Brands are stated at fair value as they have been acquired through a business combination, less accumulated amortisation.
As these assets have been acquired through a business combination, the cost is the fair value allocated in the acquisition
accounting.
Brands are amortised over their estimated useful lives of (i) one year in respect of the Azzurri brand, (ii) eight years in
respect of the ICON brand.
Software (Microsoft Licences and Callmedia)
Software is stated at fair value as it has been acquired through a business combination, less accumulated amortisation. As
these assets have been acquired through a business combination, the cost is the fair value allocated in the acquisition
accounting.
Software is amortised over its estimated useful life of (i) three years in respect of the Microsoft licences, (ii) five
years in respect of the Callmedia software.
(k) Impairment of non-current assets
Impairment tests on goodwill are undertaken annually on 31 December. Customer relationships and other assets are subject to
impairment tests whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Where the
carrying value of an asset exceeds its recoverable amount (being the higher of value in use and fair value less costs to
sell), the asset is written down accordingly in the administrative expenses line item in the consolidated statement of
comprehensive income and, in respect of goodwill impairments, the impairment is never reversed.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on
the asset's cash-generating unit (being the lowest group of assets in which the asset belongs for which there are
separately identifiable cash flows). Goodwill is allocated on initial recognition to each of the Group's cash-generating
units that are expected to benefit from the synergies of the combination giving rise to goodwill.
(l) Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation and any impairment in value. Depreciation
is provided to write off the cost, less estimated residual values, of all tangible fixed assets, other than freehold land,
over their expected useful lives, at the following rates:
Office and computer equipment - 25% straight line
Motor vehicles - 25% straight line
Leasehold improvements - over the remaining period of the lease
Freehold building - 2.5% straight line
Property, plant and equipment acquired in a business combination is initially recognised at its fair value.
(m) Inventories
Inventories comprise (i) maintenance stock, being replacement parts held to service customers' telecommunications systems,
and (ii) stock held for resale, being stock purchased for customer orders which has not been installed at the end of the
financial period. Inventories are valued at the lower of cost and net realisable value.
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short term deposits with an original maturity of three months or less,
held for meeting short term commitments.
(o) Financial assets and liabilities
The Group's financial assets and liabilities mainly comprise cash, borrowings, trade and other receivables and trade and
other payables.
Trade and other receivables are not interest bearing and are stated at their amortised cost as reduced by appropriate
allowances for irrecoverable amounts or additional costs required to effect recovery.
Trade and other payables are not interest bearing and are stated at their amortised cost.
(p) Borrowings
Interest bearing bank loans and overdrafts are initially recorded at the value of the amount received, net of attributable
transaction costs. Interest bearing borrowings are subsequently stated at amortised cost with any difference between cost
and redemption value being recognised in the consolidated statement of comprehensive income over the period of the
borrowing using the effective interest method.
(q) Foreign currency
The presentation currency of the Group is sterling. All Group companies have a functional currency of sterling (other than
Maintel International Limited ("MIL") which has a functional currency of the euro) consistent with the presentation
currency of the Group's consolidated financial statements. Transactions in currencies other than sterling are recorded at
the rates of exchange prevailing on the dates of the transactions.
On consolidation, the results of MIL are translated into sterling at rates approximating those ruling when the transactions
took place. All assets and liabilities of MIL, including goodwill arising on its acquisition, are translated at the rate
ruling at the reporting date.
(r) Accounting standards issued
There are no IFRSs that are effective for the first time during the financial year that have a material effect on the
consolidated financial statements, nor are there any impending IFRSs that are expected to have a material effect on the
Group's consolidated financial statements.
The Group notes IFRS15 Revenue from Contracts with Customers which is to be adopted for all accounting periods beginning on
or after 1 January 2018. At this time, it is not practical to provide a reasonable estimate in relation to the effect of
IFRS15 until a detailed review has been completed.
In assessing any impact during the detailed review the Group will consider the revenue streams and current recognition
policies, as disclosed in (c) above, in relation to the move from the recognition of revenue on the transfer of risks and
rewards to the transfer of control.
The Group also notes IFRS16 Leases which takes effect and will be adopted in 2019. This IFRS will require the Group to
recognise the lease on its premises as both an asset and a rental commitment in its consolidated statement of financial
position, but is not expected to have material effect on the Group's profitability.
3 Accounting estimates and judgements
In the process of applying the Group's accounting policies, management has made various estimates, assumptions and
judgements, with those likely to contain the greatest degree of uncertainty being summarised below.
Deferred tax asset relating to brought forward losses
At 31 December 2016 the directors have had to assess the validity of the carrying value of tax losses attributable to the
Datapoint UK companies that might be used against future profits, shown in note 21, which involves estimating the
companies' profitability.
Deferred tax asset relating to capital allowances
At 31 December 2016 the directors have had to assess the validity of the carrying value of capital allowances attributable
to the acquired Azzurri companies that might be used against future profits, shown in note 21, which involves estimating
the companies' profitability.
4 Segment information
Segment information
Year ended 31 December 2016
For management reporting purposes and operationally, the Group consists of three business segments: (i) telecommunications
managed service and technology sales, (ii) telecommunications network services, and (iii) mobile services. Each segment
applies its respective resources across inter-related revenue streams which are reviewed by management collectively under
these headings. The businesses of each segment and a further analysis of revenue are described under their respective
headings in the strategic report.
The chief operating decision maker has been identified as the board, which assesses the performance of the operating
segments based on revenue and gross profit.
Managed service and technology Network services Mobile Central/inter-company Total
£000 £000 £000 £000 £000
Revenue 64,109 37,395 6,947 (155) 108,296
Gross profit 21,408 10,257 3,385 (137) 34,913
Other operating income 151
Total administrative expenses (23,064)
Intangibles amortisation (4,733)
Exceptional costs (4,240)
Operating profit 3,027
Interest (net) (920)
Profit before taxation 2,107
Taxation expense (13)
Profit after taxation 2,094
Revenue is wholly attributable to the principal activities of the Group and other than sales of £8.8m to EU countries and
£1.0m to the rest of the world (2015: £4.3m to EU countries, and £1.0m to the rest of the world), arises within the United
Kingdom.
Intercompany trading consists of telecommunications services, and recharges of sales, engineering and rent costs, £0.1m
(2015: £0.1m) attributable to the managed services and technology segment, £0.1m (2015: £0.1m) to the network services
segment and immaterial amounts to the mobile segment in each year.
In 2016 the Group had no customer (2015: one) which accounted for more than 10% of its revenue (amount in 2015: £5.4m).
The board does not regularly review the aggregate assets and liabilities of its segments and accordingly an analysis of
these is not provided.
Managed service and technology Network services Mobile Central/inter-company Total
£000 £000 £000 £000 £000
Other
Intangibles amortisation 191 - - 4,542 4,733
Exceptional costs 2,305 - 76 1,859 4,240
Year ended 31 December 2015
Managed service and technology Network services Mobile Central/inter-company Total
£000 £000 £000 £000 £000
Revenue 39,614 8,383 2,815 (189) 50,623
Gross profit 15,749 2,284 1,196 (177) 19,052
Other operating income 12
Total administrative expenses (11,530)
Intangibles amortisation (2,235)
Exceptional costs (884)
Operating profit 4,415
Interest (net) (264)
Profit before taxation 4,151
Taxation (69)
Profit after taxation 4,082
Managed service and technology Network services Mobile Central/inter-company Total
£000 £000 £000 £000 £000
Other
Intangibles amortisation 251 - - 1,984 2,235
Exceptional costs 884 - - - 884
5 Employees
2016 2015
Number Number
The average number of employees, including directors, during the year was:
Corporate and administration 100 40
Sales and customer service 199 99
Technical and engineering 249 138
________ ________
548 277
________ ________
Staff costs, including directors, consist of: £000 £000
Wages and salaries 28,565 15,323
Social security costs 3,252 1,816
Pension costs 600 285
________ ________
32,417 17,424
________ ________
________
The Group makes contributions to defined contribution personal pension schemes for employees and directors. The assets of
the schemes are separate from those of the Group. Pension contributions totalling £143,000 (2015: £62,000) were payable to
the schemes at the year-end and are included in other payables.
6 Directors' remuneration
The remuneration of the Company directors was as follows:
2016 2015
£000 £000
Directors' emoluments 1,181 826
Pension contributions 27 20
________ ________
1,208 846
________ ________
Included in the above is the remuneration of the highest paid director as follows:
2016 2015
£000 £000
Directors' emoluments 266 207
Pension contributions 6 6
________ ________
272 213
________ ________
The Group paid contributions into defined contribution personal pension schemes in respect of 8 directors during the year,
2 of whom were auto-enrolled at minimal contribution levels, and 1 was on both (2015: 7, 3 auto-enrolled).
In 2015, the aggregate amount of gains made by directors on the exercise of share options in the year was £291,000, all of
which related to the highest paid director (2016: £Nil). The above table excludes these amounts.
Further details of director remuneration are shown in the remuneration committee report above.
7 Operating profit
2016 2015
£000 £000
This has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment 598 191
Amortisation of intangible fixed assets 4,733 2,235
Operating lease rentals payable:
- property 982 885
- plant and machinery 377 78
Operating lease rentals receivable - property (151) (12)
Fees payable to the Company's auditor for the audit of the Company's annual accounts 16 9
Fees payable to the Company's auditor for other services:
- due diligence and other acquisition costs 434 -
- audit of the Company's subsidiaries pursuant to legislation 229 114
- audit-related assurance services 58 25
- tax compliance services 44 22
Foreign exchange movement (33) 44
________ ________
8 Financial income and expense
2016 2015
£000 £000
Interest receivable on bank deposits 3 1
________ ________
Interest payable on bank loans 923 265
________ ________
9 Taxation
2016 2015
£000 £000
UK corporation tax
Corporation tax on profits of the period 512 610
Prior year adjustment (5) (133)
________ ________
507 477
Deferred tax (note 21) (494) (408)
________ ________
Taxation on profit on ordinary activities 13 69
________ ________
The standard rate of corporation tax in the UK for the period was 20%, and therefore the Group's UK subsidiaries are taxed
at that rate. Reductions in rate to 19% with effect from 1 April 2017 and 17% from 1 April 2020 were substantively enacted
on 15 September 2016 and the projected effect of these reductions on the unwinding of deferred tax liabilities has been
credited to the income statement at £275,000 (2015: £Nil). The differences between the total tax shown above and the amount
calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:
2016 2015
£000 £000
Profit before tax 2,107 4,151
________ ________
Profit at the standard rate of corporation tax in the UK of 20% (2015: 20.25%) 421 841
Effect of:
Expenses not deductible for tax purposes, net of reversals 510 15
Capital allowances in excess of depreciation (26) (26)
Effects of change in tax rates (120) (36)
Effects of overseas tax rates (2) (32)
Relief on option exercise - (62)
Prior year adjustment 5 (133)
Increase in deferred tax asset relating to Datapoint tax losses (note 21) (500) (500)
Decrease in deferred tax liability relating to intangible assets (note 21) (275) -
Other timing differences - 2
________ ________
13 69
________ ________
10 Dividends paid on ordinary shares
2016 2015
£000 £000
Final 2014, paid 1 May 2016 - 11.6p per share - 1,243
Interim 2015, paid 7 October 2015 - 12.8p per share - 1,378
Second interim 2015, paid 5 April 2016 - 16.5p per share 1,777 -
Interim 2016, paid 12 October 2016 - 13.4p per share 1,902 -
________ ________
3,679 2,621
________ ________
The directors propose the payment of a final dividend for 2016 of 17.4p (2015: second interim 16.5p) per ordinary share,
payable on 18 May 2017 to shareholders on the register at 31 March 2017. The cost of the proposed dividend, based on the
number of shares in issue as at 17 March 2017, is £2,470,000 (2015 second interim: £1,777,000).
11 Earnings per share
Earnings per share
Earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of shares
in issue for the period, these figures being as follows:
2016 2015
£000 £000
Earnings used in basic and diluted EPS, being profit after tax 2,094 4,082
Adjustments:
Intangibles amortisation (note 14) 4,733 2,235
Exceptional costs (note 12) 4,240 884
Tax relating to above adjustments (1,333) (666)
Deferred tax charge on utilisation of Datapoint tax losses 504 451
Increase in deferred tax asset in respect to Datapoint tax losses (500) (500)
Deferred tax charge on utilisation of Azzurri tax losses 642 -
Deferred tax charge on Azzurri profits 100 -
Decrease in deferred tax liability of intangible assets (275) -
________ ________
Adjusted earnings used in adjusted EPS 10,205 6,486
________ ________
________
Datapoint has brought forward tax losses, so that it will pay no tax in respect of this year's profits. On acquisition,
however, a deferred tax asset was recognised in respect of a proportion of its tax losses, and a deferred tax charge of
£378,000 has been recognised in the income statement in respect of the nine month period to 30 September profits. On 1
October 2016, the net assets of Datapoint UK entities were hived up into Maintel Europe Limited. Therefore, a further
£126,000 deferred tax charge was calculated on a streamed basis and was recognised in the income statement for the three
month period to 31 December 2016. As this does not reflect the reality and
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