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assume conversion of all dilutive potential ordinary
shares. The dilutive shares are those share options granted to employees where
the exercise price is less than the average market price of the company's
ordinary shares during the year.
Adjusted earnings
The directors believe that adjusted operating profit, adjusted profit before
tax, adjusted earnings and adjusted earnings per share provide additional
useful information on underlying trends to shareholders. These measures are
used by management for internal performance analysis and incentive
compensation arrangements. The term "adjusted" is not a defined term used
under IFRS and may not therefore be comparable with similarly titled profit
measurements reported by other companies. The principal adjustments are made
in respect of the amortisation of acquired intangibles and non-recurring items
and their related tax effects.
The reconciliation between reported and underlying earnings and basic earnings
per share is shown below:
2016 2015
Earnings£'000 Pence Earnings£'000 Pence
Reported loss per share - continuing operations (2,956) (2.4)p (1,178) (0.9)p
Amortisation of acquired intangibles after tax 1,166 1.0p 1,186 1.0p
Non-recurring items after tax 542 0.4p 431 0.4p
Adjusted (loss)/earnings per share - continuing operations (1,248) (1.0)p 479 0.4p
Potential ordinary shares are non-dilutive in the current and prior years as
they would decrease the loss per share from continuing operations. Accordingly
there is no difference between basic and diluted EPS.
10. CASH FLOW GENERATED FROM OPERATING ACTIVITIES
Reconciliation of loss before taxation to net cash flows from operating
activities.
2016£'000 2015£'000
Loss before tax (55,637) (994)
Depreciation of property, plant and equipment 701 761
Loss on disposal of property, plant and equipment 1,009 -
Amortisation and impairment of development costs 13,772 3,224
Amortisation and impairment of acquired intangibles 25,609 2,404
Share-based payment expense 1,247 (43)
Finance income (2) (8)
Finance costs 351 248
Decrease in inventories 7,249 557
Decrease / (increase) in trade and other receivables 3,670 (2,411)
Increase / (decrease) in trade and other payables 376 (3,261)
Increase in provisions 420 128
Net cash generated from operating activities (1,235) 605
11. CALLED UP SHARE CAPITAL, SHARE PREMIUM AND CAPITAL REDEMPTION RESERVE
Number of shares '000 Share Capital £'000 Share Premium £'000 Capital redemption reserve£'000 Total £'000
At 1 January 2016 122,603 3,066 6,800 617 10,483
Share issues 2,000 49 - - 49
At 31 December 2016 124,603 3,115 6,800 617 10,532
617
10,532
12. NET FUNDS
Reconciliation of decrease in cash and cash equivalents to movement in net
cash:
Net cash and cash equivalents£'000 Other borrowings£'000 Total net cash£'000
At 1 January 2016 3,251 (9,000) (5,749)
Cash flow for the year before financing (6,240) - (6,240)
Proceeds on issue of shares 49 - 49
Movement in borrowings in the year 6,000 (6,000) -
Dividend paid (1,829) - (1,829)
Exchange rate adjustments (774) - (774)
Cash and cash equivalents at 31 December 2016 457 (15,000) (14,543)
(14,543)
13. POST BALANCE SHEET EVENTS
The Company announced on 20 October 2016 that it had entered into a Business
Purchase Agreement to sell the assets of Vislink Communication Systems, the
hardware division of the Company, for the consideration of $16.0m to xG
Technology, Inc . The disposal was conditional on approval of shareholders of
the Company under Rule 15 of the AIM Rules which was received 9 January 2017.
Subsequently on 16 January 2017 it was announced that it had been agreed to
revise the specific terms of the transaction subject to shareholder approval.
The headline consideration remained at $16.0m but was now to be satisfied by
an amount of initial consideration and an amount of deferred consideration, it
was also agreed that the Company would retain the right to any sums received
in future in respect of an outstanding debtor subject to a maximum sum of
$2.0m. The shareholders' approval was received on 2 February 2017 and the
transaction completed.
Subsequently, on 23 February 2017, it was announced that $3m of the deferred
consideration had been settled through xG Technology taking on liability for
settling $3.0m of VCS trade creditors, which under the revised and original
Business Purchase Agreement had remained as liabilities of the Group. On the 8
March 2017 it was announced that further $1.6m of the deferred consideration
had been settled through xG Technology taking on liability for settling a
further $1.6m of VCS trade creditors.
Subsequent to the announcement of 7 March 2017, on 20 March 2017, agreement
was reached with xG Technology whereby the outstanding deferred consideration
of $4.9 million due from xG Technology had been settled in full by a cash
payment of $2.0 million and the release of the $125,000 in escrow from the
Initial Payment. Consequently the initially agreed consideration was reduced
from $16.0m to $13.1m.
As at the transaction date of 2 February 2017 the net assets of the disposal
group were being carried at the fair value less costs to sell of the disposal
group being £10.2m. Accordingly no further significant gain or loss in respect
of the sale of this disposal group is anticipated for the year ending 31
December 2017.
On 15 March 2017 the Group sold Marlborough House, a building owned by Vislink
Holdings Limited for £0.5 million. The anticipated gain on disposal of this
building is £0.2 million.
In accordance with the announcement on 23 February 2017, the Company is now
carrying out a strategic review of options for the business, which could
include a sale of the Group.
Ends
This information is provided by RNS
The company news service from the London Stock Exchange