TIDMCRW
RNS Number : 1694S
Craneware plc
06 September 2010
Craneware plc
("Craneware" or the "Company")
FINAL RESULTS
6 September 2010 - Craneware plc (AIM: CRW.L; OTC: CRWRY), the market leader in
automated revenue integrity solutions for the US healthcare market, announces
its results for the year ended 30 June 2010.
Financial Highlights
* Record levels of contracted sales in the year totalling $58.1m (2009: $43.2m),
34% up on the previous year, contributing to:
o 23% increase in revenues to $28.4m (2009: $23.0m)
o 49% increase in future revenues under contract to $89.8m (2009: $60.1m)
* EBITDA increased 31% to $7.6m (2009: $5.8m)
* Profit before taxation increased by 24% to $7.3m (2009: $5.9m)
* Cash position increased 13% to $29.4m after paying dividends of $3m in year
(2009: $26.1m)
* Basic EPS increased to $0.22 (2009: $0.18) and diluted to $0.21 (2009: $0.17)
* Final dividend proposed of 3.3p (4.94 cents) per share giving a total dividend
for the year of 8.0p (11.99 cents) per share (2009: 4.7p (7.43 cents) per share)
Operational Highlights
* Launch and first sales of fifth product, Supplies ChargeLink(TM).
* Significant investment in sales and marketing capacity during the year.
* Strengthened market position through signing in the year of two significant
partnerships with Premier Healthcare Alliance and McKesson Corporation.
* Signing of several major multi-site contracts, including with Intermountain
Healthcare, described by President Obama and other U.S. leaders as 'a model for
the rest of the nation.'
Keith Neilson, CEO of Craneware commented:
"Whilst this has been a record year for sales, perhaps more significant has been
the investment we have made in the business over the year. We have increased our
sales team, expanded our network of alliances and enhanced our product set and
customer offering.
"The U.S. healthcare industry is starting to debate the early effects of the
reforms which were outlined in January 2010 and will gradually be introduced
over the next eight years, meaning the drivers for growth in coming years could
be yet higher than those which we have experienced this year. Our focus on the
mitigation of risk for our customers, and the delivery of financial and
operational efficiencies means we are extremely well positioned to benefit from
the unprecedented changes we expect to see in healthcare in the U.S., no matter
the final form of healthcare reform.
"These factors, plus the $89.8m of revenues we currently have under contract for
future years gives us high levels of confidence in our success in the years
ahead. With industry leading product sets and an enviable customer base our
focus now will be on achieving operational excellence and providing the next
generation of solutions to help with the challenges of healthcare reform that
face our customers."
For further information, please contact:
+--------------------+-----------------+-----------------------+
| Craneware plc | KBC Peel Hunt | Threadneedle |
| | | Communications |
+--------------------+-----------------+-----------------------+
| +44 (0)1506 407 | +44 (0)20 7418 | +44 (0) 20 7653 9850 |
| 666 | 8900 | |
+--------------------+-----------------+-----------------------+
| Keith Neilson, CEO | Jonathan Marren | Caroline Evans-Jones |
| | | |
+--------------------+-----------------+-----------------------+
| Craig Preston, CFO | Richard Kauffer | Fiona Conroy |
+--------------------+-----------------+-----------------------+
| | Dan Webster | |
+--------------------+-----------------+-----------------------+
About Craneware
Founded in 1999, Craneware has headquarters in Livingston, Scotland with offices
in Atlanta and Arizona, employing over 140 staff. Craneware is the leader in
automated revenue integrity solutions that improve financial performance and
mitigate risk for healthcare organisations. Craneware's market-driven, annuity
SaaS solutions help hospitals and other healthcare providers more effectively
price, charge and code for services and supplies associated with patient care.
These optimise reimbursement, increase operational efficiency and minimise
compliance risk. By partnering with Craneware, clients achieve the visibility
required to identify, address and prevent revenue leakage. To learn more, visit
craneware.com & stoptheleakage.com.
Chairman's Statement
Craneware has enjoyed another excellent year, delivering record sales and
developing the foundations for continued success. With contracted sales growth
of 34%, recorded revenues and profits have both grown by over 20%. Importantly
we now have over $89m of contracted revenue, an increase of 48%, to be
recognised in future years, providing us with excellent visibility for several
years ahead. The planned investment in the infrastructure of the business
continues to increase its scalability and our market position has been
significantly strengthened through several key alliances with some of the
world's largest healthcare organisations.
While uncertainty prevails regarding the final form of U.S. healthcare reforms,
what is certain is that healthcare organisations are seeking ways to increase
efficiencies whilst still providing high levels of patient care. This is at the
heart of the Craneware offering and I believe our best of breed products and our
commitment to supporting our customers in meeting the increasing pressures being
placed upon them, is the foundation of our success.
This has been a record sales year for Craneware, however the Board believes that
the full effect of healthcare reforms and the U.S. Stimulus package is yet to
flow through and will have a greater impact in future years, presenting some
significant new growth opportunities for the Company. For instance, tools
previously developed specifically for current hospital customers who own
physician practices are seeing increased demand from the wider market as a
result of an anticipated trend of hospitals moving back into the ownership of
physician practices.
Craneware's network in the U.S. healthcare market has been considerably
strengthened during the year, with two of the largest organisations in the
market, McKesson and Premier, formalising partnerships with us. Not only does
this provide us with an enhanced route to market, but is also a compelling
endorsement of Craneware's valuable position at the heart of our marketplace.
We have invested significantly in our direct sales teams during the year,
bringing on board additional product and client managers across the U.S. We have
also opened a new office in Atlanta on 1st July, giving us a presence at the hub
of the U.S. healthcare industry. We are confident that we are currently well
resourced and have the means to achieve significant scale in the years ahead,
both organically and through acquisition.
We have been pleased with the initial response to our newly launched Supplies
ChargeLink and are on course to launch our sixth product, Value-based Pricing
Analyzer, at the end of the calendar year. We have a strong portfolio of both
established and new products and are pleased to have seen the average number of
products per customer increase during the year from 1.4 to 1.6.
The strength of our customer base, the quality of our products and the
developments taking place in U.S. healthcare gives the Board confidence that we
have many years of growth ahead.
I would like to thank all the Craneware team, partners and particularly
customers for their continued support.
George Elliott
Chairman
3 September 2010
Operational Review
This has been an extremely positive year for Craneware. We have invested
considerable efforts in developing the scalability of the business and expanding
our position in the marketplace. Throughout the year we have maintained our
market focus and believe both our ability to mitigate risk and drive through
efficiencies continues to earn loyalty from our expanding customer base. We are
confident therefore that we are in an extremely strong position in terms of
products and customers and our focus in the year ahead will be on continued
improvement seeking operational excellence.
We are delighted to have signed several significant deals during the year with
some of the U.S.'s leading hospital systems including Intermountain Healthcare,
which has been described by President Obama and other U.S. leaders as a model
for the rest of the nation. We view our interaction with each customer as a
long-term partnership and this year we have increased the level of training and
support we offer to all our customers in order to ensure they receive high
levels of value and return on investment from our products. We believe this
customer focus is vital for our continued success and is an area in which we
will continue to invest.
The investment in our sales and marketing capabilities and U.S. infrastructure
over the year has been transformational, preparing us for the next stage of
development. With these first steps now complete we are now in a position to
build on our current partnership agreements, seek further alliances and enhance
our go-to-market strategy through selective acquisitions.
The Market
President Obama's healthcare reforms mean that by 2014 it is estimated
approximately 40 million U.S. citizens who are currently uninsured will become
eligible for healthcare assistance through the state and federal Medicare and
Medicaid programmes. While the final form of the legislation is yet to be
decided, what is clear is that hospitals will be required to provide healthcare
facilities and services to an increasing number of patients, at a lower level of
reimbursement per individual. Efficiency and return on investment, two of the
main business drivers behind Craneware's product families, are now therefore
areas of paramount importance to management teams when making their buying
decisions.
$25.8 billion of funds within the American Recovery and Reinvestment Act
announced in February 2009 were allocated to the U.S. healthcare industry.
However the rules by which healthcare organisations can apply for the funds are
only now coming into effect. Capital expenditure by hospitals in general during
the year therefore remained at a low level, impacted by the global economic
conditions. The effect of this constrained expenditure on Craneware has been
minimised as our software generally sits within operational budgets, however it
may well prove that as more funds flow into hospitals we will see a general
upswing in the market and direct benefits to our partners such as McKesson.
The introduction of Revenue Audit Contractors as of 1st January 2010 has
generated some movement in our market place, but as previously stated we believe
the real impetus from this will come in 2011 and 2012.
Another encouraging development during the year, a result of the healthcare
reforms, has been some early evidence of a reversal of a previous trend, which
saw hospitals moving away from the ownership of physician practices. The
apparent shift in this trend could mean a reopening of a significant additional
marketplace which Craneware would be well positioned to service through its
physician based products which were developed for the large hospital owned
physician practices and have been kept current for the installed customer base
that despite previous wider market trends, retained their physician groups.
It is evident that the U.S. healthcare market is only at the very first stages
of reform. Regardless of the various options that the reform may take, the Board
believes Craneware is well-placed to meet the growing needs of its customers and
become the technology vendor of choice to deliver revenue integrity to
healthcare organisations.
Sales and Marketing
As planned, this year saw the continued accelerated investment into our sales
and marketing capabilities. We have added new sales distribution staff,
including client sales managers, assistant sales managers and additional
telephone support. Our new office opened in Atlanta just following the close of
the year, on 1st July and will be home to our training facilities. This is a
focal centre for our U.S. operations, positioning us in the heart of the U.S.
healthcare industry.
We have now substantially completed the restructuring of our sales team, which
has increased by 37% since the start of the year. We have been pleased by a
strong sales performance during the year delivering a record $58.1m of
contracted sales (an increase of 34% on 2009: $43.2m) and have every reason to
believe we can improve on this in the years ahead.
The average length of new contracts has stabilised as predicted at approximately
5 years.
We believe the opportunity for further cross-sales from our enlarged product set
to be significant. With less than 40% of our current hospital base having more
than two products we expect to see this momentum maintained in the coming years
as we continue with our cross-sell marketing initiatives.
Internally Craneware is targeting a revenue split of no more than 50% from any
one product by the start of FY14 (1 July 2013) and is confident that it is
achieving the correct additional balance of non-chargemaster sales to achieve
this.
Product Development
Craneware continues to invest in product development to further its position as
the vendor of choice for solutions which sit in and around the point where
clinical data turns into financial data.
This year saw the successful launch of Supplies ChargeLink, a new product in our
Supply Management family. Early sales have met management's expectations and are
in line with the early successes of the other products we have launched
post-IPO. We believe the potential market for this product to be significant,
with more than half of US hospitals believing they are not fully reimbursed for
their supplies and over three-quarters having no automated process to attempt to
do so. We have been pleased with the initial market response to the product
following its launch in December 2009.
We intend for new product momentum to continue through the remainder of 2010,
with the launch of our sixth product, Value-based Pricing Analyzer which is part
of the Strategic Pricing family, planned for Q4 of the current calendar year.
Again, we believe the market opportunity for this product to be significant.
Replacing consultants and manual processes, Value-based Pricing Analyzer helps
hospitals more effectively, accurately and sustainably manage their pricing
strategies for drugs and supplies, optimising their financial performance while
making strategic decisions in both a transparent and defensible manner.
Customers can use Value-based Pricing Analyzer to balance the reimbursement,
cost and market considerations that drive pricing. The tool allows hospitals to
create multiple pricing scenarios detailed down to the service level, or
aggregated to the facility or care network as a whole. The product is
anticipated to start contributing towards revenue by the end of calendar 2010.
Customers
Well over 1,000 hospital facilities across 48 States utilise one or more of our
software products. We continue to sign up a broad range of customers in terms of
size from small community hospitals to some of the largest healthcare networks
such as Intermountain Healthcare and North Shore-LIJ.
In response to customer feedback we introduced a training and certification
programme in our products during the year and our user groups now carry official
CPE (Continuing Professional Education) certification. We also extended our
online classroom tools to include branded certification in the usage and
implementation of our software and the environment that it goes into, with the
first accreditation certificates awarded to customers who have successfully
completed courses.
We were delighted that during the year not only was our core product,
Chargemaster Toolkit once again awarded the number one position in its category
by the prestigious U.S. industry research house KLAS, but we succeeded in
increasing our scores year on year, reaffirming our number one position in the
industry and our focus on customer commitment. We were particularly pleased to
see that 97% of respondents highlighted Craneware as being part of their
long-term strategy.
For customers coming to the end of their multi-year contracts, renewal rates
remain in line with the high levels achieved in previous years.
Channel Partners
We have made considerable progress in the year in strengthening our
partnerships; these enhance our go to market strategy and provide a strong
endorsement of Craneware's central position in the U.S. Healthcare IT market.
At the start of the financial year we signed a third party agreement with
McKesson the world's largest healthcare services company, to integrate
Craneware's Chargemaster Toolkit software with McKesson's next generation
hospital information system (HIS), Horizon Enterprise Revenue Management(TM) as
part of their ongoing legacy system replacement and upgrading programme. By
integrating the two solutions, McKesson and Craneware are delivering a
synchronised approach to achieving revenue integrity, which aids hospitals in
improving their financial performance.
Early sales through the partnership have all been delivered to plan, with a
healthy pipeline for the future.
Beyond the Horizon system we have developed, and are in the process of
developing further, direct interfaces to the main McKesson legacy systems (Star,
HealthQuest & the Series range), meaning current customers of McKesson will be
able to easily implement integrated Craneware products in the future.
In April 2010 we were pleased to announce the expansion of our relationship with
the Premier healthcare alliance. The new deal between Craneware and Premier is a
five-year reseller agreement, with a minimum value of $15 million. Premier has
begun marketing our solutions to its 2,300 not-for-profit hospital alliance
members and we have been pleased by the strong commitment shown by both parties
in creating a successful partnership. All the initial deliverables under the
agreement have been successfully completed and we are actively seeking
opportunities for further expansion of the agreement going forward.
Partnerships are an important part of the future development of Craneware and we
will continue to invest time and resource into expanding this area.
Financial Review
The financial results represent a further year of strengthened financial
performance. Craneware has delivered another record sales year increasing the
total value of contracts signed (our sales) during the year by 34% to $58.1m
(2009: $43.2m), whilst continuing to invest for further future success.
Craneware recognises revenue through its annuity revenue recognition model. This
model sees software licence revenue recognised over the life of the contracts we
sign (which during the year has remained stable at an average contract life of 5
years), with any associated professional services revenue recognised as we
deliver the services. As a result of this revenue recognition model, the
maximum value of an average contract that can be recognised as revenue in the
current year is 20% plus the value of associated professional services that have
been delivered.
This model has delivered the benefit of significant yet steady revenue growth
during the year, whilst further building the already sizeable revenues under
contract which will be recognised in future years. This highly predictable
future revenue stream allows us to invest in the future of our business whilst
delivering year on year increases in our operating margins.
As a result of this recognition model, against our 34% increase in total
contracts signed during the year, we have increased our reported revenues by 23%
to $28.4m (2009: $23.0m), the balance of these sales increasing our future
revenues under contract. This now provides Craneware with visibility over $89.8m
of future revenue (representing over 3 times current year reported revenues and
an increase of 49% or $29.7m over fiscal 2009). Of this future revenue under
contract we have already invoiced $13.9m which is recorded as deferred income in
the balance sheet, the remaining $75.9m to be invoiced in subsequent years.
Of this $89.8m of future revenue, the directors consider that $25.7m will be
recognised during FY11 with a further $19.7m and $15.4m respectively to be
recognised in FY12 and FY13. In addition, assuming as has happened in the year,
the total monetary value of renewed contracts is at least equal to the total
monetary value of contracts that were due to renew, $2.7m revenues will be
recognised from renewal activity during FY11, with a further $7.6m and $11.9m
respectively in FY12 and FY13 relating to contracts due for renewal from 1 July
2010 through these years.
We have continued our planned investment during the year, increasing our sales
and marketing spend by 16% to $7.1m (2009: 6.1m) and product development by 28%
to $3.8m after capitalising $0.5m of costs relating to new products (2009: $3.0m
after capitalising $0.6m of costs relating to new products). Through these
investments and the full year effect of our investment in product management and
marketing made in the prior year, net operating expenses have risen to $18.8m
(2009: $16.3m). However, as a proportion of revenues, net operating expenses
have reduced to 66% from 71% in FY09.
In regards to customers coming to the end of their multi-year contracts, the
Company's renewal rate remains within the high levels achieved in previous
years. This combined with increased upsell and cross selling to the renewing
hospital base, has resulted in the total monetary value of the current year
renewals increasing by 115% as compared to the original annuity revenue value to
the Company.
As a result of all these factors, earnings before interest, taxation, share
based payments, depreciation, and amortisation ("EBITDA") has increased 31% to
$7.6m (2009: $5.8m) and the associated EBITDA margin has increased to 26.8%
(2009: 25.3%).
We continue to measure the quality of these earnings through our ability to
convert them into operating cash. We are pleased to report that for the second
successive year we have collected more than 100% of our EBITDA as operating
cash. This has resulted in the Group's cash balance increasing to $29.4m (2009:
$26.1m) despite, during the year, having paid over $2.0m in taxation and
returning $3.0m to our shareholders by way of dividend payments.
The Group maintains a strong balance sheet position, not only through our
significant cash balance but with rigorous controls over working capital. At 30
June 2010 we have seen an increase in our net trade receivables balance
increasing to $7.1m from $4.0m in the prior year. This has been the result of
the increase in sales during the year and some significant invoice milestones
having been reached on a number of the large contracts we have previously
announced. This increase in trade receivables has resulted in an expected
corresponding increase in our deferred income balance. As at the balance sheet
date, $5.4m of the trade receivables balance was not yet due, and since the
balance sheet date we have collected $4.1m of the total balance.
With the reporting currency (and cash reserves) of the Company being in US
Dollars, and approximately one third of the cost base being based in the UK
relating primarily to our UK employees (and therefore denominated in Sterling)
we continue to closely monitor the Sterling to US Dollar exchange rate, and
where appropriate consider hedging strategies. During the year, we have not
seen a significant impact through exchange rate movements, with the average
exchange rate throughout the year being $1.5821 as compared to $1.6142 in the
prior year.
Dividend
Basic and diluted earnings per share were $0.22 (2009: $0.18) and $0.21 (2009:
$0.17) respectively and the Board recommends a final dividend of 3.3p (4.94
cents) per share giving a total dividend for the year of 8.0p (11.99 cents) per
share (2009: 4.7p (7.43 cents) per share). Subject to confirmation at the
Annual General Meeting, the final dividend will be paid on 8 December 2010 to
shareholders on the register as at 12 November 2010.
The final dividend of 3.3p per share is capable of being paid in US dollars
subject to a shareholder having registered to receive their dividend in US
dollars under the Company's Dividend Currency Election, or who register to do so
by the close of business on 12 November 2010. The exact amount to be paid will
be calculated by reference to the exchange rate to be announced on 12 November
2010. The final dividend referred to above in US dollars of 4.94 cents is given
as an example only using the balance sheet exchange rate of 1.4961/ GBP1 and may
differ from that finally announced.
M&A
The Board has evaluated a number of M&A opportunities throughout the course of
the year but to date has not concluded on an opportunity that would have been
sufficiently accretive to merit investment. We continue to have a healthy
pipeline of new opportunities which we are evaluating.
Outlook
Whilst this has been a record year for sales, perhaps more significant has been
the investment we have made in the business over the year. We have increased our
sales team, expanded our network of alliances and enhanced our product set and
customer offering.
The U.S. healthcare industry is starting to debate the early effects of the
reforms which were outlined in January 2010 and will gradually be introduced
over the next eight years, meaning the drivers for growth in coming years could
be yet higher than those which we have experienced this year. Our focus on the
mitigation of risk for our customers, and the delivery of financial and
operational efficiencies means we are extremely well positioned to benefit from
the unprecedented changes we expect to see in healthcare in the U.S., no matter
the final form of healthcare reform.
These factors, plus the $89.8m of revenues we currently have under contract for
future years gives us high levels of confidence in our success in the years
ahead. With industry leading product sets and an enviable customer base our
focus now will be on achieving operational excellence and providing the next
generation of solutions to help with the challenges of healthcare reform that
face our customers.
+--------------------------------+--------------------------------+
| Keith Neilson | Craig Preston |
| Chief Executive Officer | Chief Financial Officer |
| 3 September 2010 | 3 September 2010 |
| | |
+--------------------------------+--------------------------------+
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2010
+---------------------------------+-------+----------+----------+
| |Notes | 2010 | 2009 |
+---------------------------------+-------+----------+----------+
| | | $'000 | $'000 |
+---------------------------------+-------+----------+----------+
| Revenue | | 28,397 | 22,993 |
+---------------------------------+-------+----------+----------+
| Cost of sales | | (2,553) | (1,381) |
+---------------------------------+-------+----------+----------+
| Gross profit | | 25,844 | 21,612 |
+---------------------------------+-------+----------+----------+
| Net operating expenses | 3 | (18,781) | (16,262) |
+---------------------------------+-------+----------+----------+
| Operating profit | | 7,063 | 5,350 |
+---------------------------------+-------+----------+----------+
| | | | |
+---------------------------------+-------+----------+----------+
| Analysed as: | | | |
+---------------------------------+-------+----------+----------+
| Operating profit before share | | | |
| based payments, | | | |
+---------------------------------+-------+----------+----------+
| depreciation and amortisation | | 7,622 | 5,812 |
+---------------------------------+-------+----------+----------+
| Share based payments | | (114) | (82) |
+---------------------------------+-------+----------+----------+
| Depreciation of plant and | | (192) | (204) |
| equipment | | | |
+---------------------------------+-------+----------+----------+
| Amortisation of intangible | | (253) | (176) |
| assets | | | |
+---------------------------------+-------+----------+----------+
| | | | |
+---------------------------------+-------+----------+----------+
| Finance income | | 195 | 520 |
+---------------------------------+-------+----------+----------+
| Profit before taxation | | 7,258 | 5,870 |
+---------------------------------+-------+----------+----------+
| Tax charge on profit on | 4 | (1,733) | (1,422) |
| ordinary activities | | | |
+---------------------------------+-------+----------+----------+
| Profit for the year | | 5,525 | 4,448 |
+---------------------------------+-------+----------+----------+
The results relate to continuing operations.
Earnings per share for the period attributable to equity holders
+--------------------------------+-------+-------+-------+
| |Notes | 2010 | 2009 |
+--------------------------------+-------+-------+-------+
| Basic ($ per share) | 6a | 0.218 | 0.177 |
+--------------------------------+-------+-------+-------+
| Diluted ($ per share) | 6b | 0.210 | 0.170 |
+--------------------------------+-------+-------+-------+
Statement of Changes in Equity for the year ended 30 June 2010
+------------------------+---------+---------+----------+----------+---------+
| | | Share | | | |
+------------------------+---------+---------+----------+----------+---------+
| | Share | Premium | Other | Retained | |
+------------------------+---------+---------+----------+----------+---------+
| | Capital | Account | Reserves | Earnings | Total |
+------------------------+---------+---------+----------+----------+---------+
| Group | $'000 | $'000 | $'000 | $'000 | $'000 |
+------------------------+---------+---------+----------+----------+---------+
| At 1 July 2008 | 509 | 9,253 | 3,041 | 3,296 | 16,099 |
+------------------------+---------+---------+----------+----------+---------+
| Share-based payments | - | - | 82 | 211 | 293 |
+------------------------+---------+---------+----------+----------+---------+
| Losses | - | - | - | (248) | (248) |
+------------------------+---------+---------+----------+----------+---------+
| Options exercised | 3 | (3) | - | - | - |
+------------------------+---------+---------+----------+----------+---------+
| Retained profit for | - | - | - | 4,448 | 4,448 |
| the year | | | | | |
+------------------------+---------+---------+----------+----------+---------+
| Dividends (Note 5) | - | - | - | (1,917) | (1,917) |
+------------------------+---------+---------+----------+----------+---------+
| At 30 June 2009 | 512 | 9,250 | 3,123 | 5,790 | 18,675 |
+------------------------+---------+---------+----------+----------+---------+
| Share-based payments | - | - | 114 | 730 | 844 |
+------------------------+---------+---------+----------+----------+---------+
| Options exercised | - | - | - | - | - |
+------------------------+---------+---------+----------+----------+---------+
| Retained profit for | - | - | - | 5,525 | 5,525 |
| the year | | | | | |
+------------------------+---------+---------+----------+----------+---------+
| Dividends (Note 5) | - | - | - | (2,992) | (2,992) |
+------------------------+---------+---------+----------+----------+---------+
| At 30 June 2010 | 512 | 9,250 | 3,237 | 9,053 | 22,052 |
+------------------------+---------+---------+----------+----------+---------+
Consolidated Balance Sheet as at 30 June 2010
+------------------------------------+-------+--------+--------+
| |Notes | 2010 | 2009 |
+------------------------------------+-------+--------+--------+
| | | $'000 | $'000 |
+------------------------------------+-------+--------+--------+
| ASSETS | | | |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Non-Current Assets | | | |
+------------------------------------+-------+--------+--------+
| Plant and equipment | | 281 | 345 |
+------------------------------------+-------+--------+--------+
| Intangible assets | 7 | 1,474 | 1,206 |
+------------------------------------+-------+--------+--------+
| Deferred tax | | 1,521 | 718 |
+------------------------------------+-------+--------+--------+
| Trade and other receivables | | - | 25 |
+------------------------------------+-------+--------+--------+
| | | 3,276 | 2,294 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Current Assets | | | |
+------------------------------------+-------+--------+--------+
| Trade and other receivables | | 8,596 | 5,187 |
+------------------------------------+-------+--------+--------+
| Cash and cash equivalents | | 29,442 | 26,169 |
+------------------------------------+-------+--------+--------+
| | | 38,038 | 31,356 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Total Assets | | 41,314 | 33,650 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| EQUITY AND LIABILITIES | | | |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Non-Current Liabilities | | | |
+------------------------------------+-------+--------+--------+
| Deferred income | | 218 | 124 |
+------------------------------------+-------+--------+--------+
| | | 218 | 124 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Current Liabilities | | | |
+------------------------------------+-------+--------+--------+
| Deferred income | | 13,660 | 10,964 |
+------------------------------------+-------+--------+--------+
| Trade and other payables | | 5,384 | 3,887 |
+------------------------------------+-------+--------+--------+
| | | 19,044 | 14,851 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Total Liabilities | | 19,262 | 14,975 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Equity | | | |
+------------------------------------+-------+--------+--------+
| Called up share capital | 8 | 512 | 512 |
+------------------------------------+-------+--------+--------+
| Share premium account | | 9,250 | 9,250 |
+------------------------------------+-------+--------+--------+
| Other reserves | | 3,237 | 3,123 |
+------------------------------------+-------+--------+--------+
| Retained earnings | | 9,053 | 5,790 |
+------------------------------------+-------+--------+--------+
| Total Equity | | 22,052 | 18,675 |
+------------------------------------+-------+--------+--------+
| | | | |
+------------------------------------+-------+--------+--------+
| Total Equity and Liabilities | | 41,314 | 33,650 |
+------------------------------------+-------+--------+--------+
Statements of Cash Flows for the year ended 30 June 2010
+-----------------------------+-------+---------+---------+---------+---------+
| | | Group | Company |
+-----------------------------+-------+-------------------+-------------------+
| |Notes | 2010 | 2009 | 2010 | 2009 |
+-----------------------------+-------+---------+---------+---------+---------+
| | | $'000 | $'000 | $'000 | $'000 |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash generated from | 9 | 8,906 | 7,378 | 8,572 | 6,145 |
| operations | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Interest received | | 195 | 520 | 195 | 520 |
+-----------------------------+-------+---------+---------+---------+---------+
| Tax paid | | (2,188) | (202) | (966) | (464) |
+-----------------------------+-------+---------+---------+---------+---------+
| Net cash from operating | | 6,913 | 7,696 | 7,801 | 6,201 |
| activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Purchase of plant and | | (127) | (134) | (37) | (78) |
| equipment | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Capitalised intangible | | (521) | (588) | (518) | (583) |
| assets | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Net cash used in | | (648) | (722) | (555) | (661) |
| investing activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Dividends paid to company | 5 | (2,992) | (1,917) | (2,992) | (1,917) |
| shareholders | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Net cash used in | | (2,992) | (1,917) | (2,992) | (1,917) |
| financing activities | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Net increase in cash and | | 3,273 | 5,057 | 4,254 | 3,623 |
| cash equivalents | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash and cash equivalents | | 26,169 | 21,112 | 23,959 | 20,336 |
| at the start of the year | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
| Cash and cash equivalents | | 29,442 | 26,169 | 28,213 | 23,959 |
| at the end of the year | | | | | |
+-----------------------------+-------+---------+---------+---------+---------+
Notes to the Financial Statements
General Information
Craneware plc (the Company) is a public limited company incorporated in
Scotland. The Company has a primary listing on the AIM stock exchange.
Basis of preparation
The financial statements are prepared in accordance with International Financial
Reporting Standards, as adopted by the European Union (IFRS), IFRIC
interpretations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements have been prepared
under the historic cost convention. A summary of the more important accounting
policies is set out below, together with an explanation of where changes have
been made to previous policies on the adoption of new accounting standards in
the year, if applicable.
The preliminary announcement for the year ended 30 June 2010 does not constitute
statutory accounts as defined in Section 435 of the UK Companies Act 2006.
PricewaterhouseCoopers LLP have audited the consolidated statutory accounts for
the Group for the years ended 30 June 2009 and 30 June 2010 and the reports were
unqualified and did not contain a statement under Section 498(2) or (3) of the
UK Companies Act 2006. The Group's consolidated statutory accounts for the year
ended 30 June 2009 have been filed with the Register of Companies. The Group's
Annual Report and Accounts for the year ended 30 June 2010 will be dispatched to
shareholders by the date that the final dividend is payable.
The preparation of financial statements in conformity with IFRS requires the use
of estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
The Company and its subsidiary undertaking are referred to in this report as the
Group.
1. Selected principal accounting policies
The principal accounting policies adopted in the preparation of these accounts
are set out below. These policies have been consistently applied, unless
otherwise stated.
Reporting currency
The Directors consider that as the Group's revenues are primarily denominated in
US dollars the principal functional currency is the US dollar. The Group's
financial statements are therefore prepared in US dollars.
Currency Translation
Transactions denominated in foreign currencies are translated into US dollars at
the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities expressed in foreign currencies are translated into US dollars at
rates of exchange ruling at the balance sheet date $1.4961/GBP1 (2009 :
$1.6452/GBP1). Exchange gains or losses arising upon subsequent settlement of
the transactions and from translation at the balance sheet date, are included
within the related category of expense where separately identifiable, or in
general and administrative expenses.
Revenue recognition
The Group follows the principles of IAS 18, "Revenue Recognition", in
determining appropriate revenue recognition policies. In principle revenue is
recognised to the extent that it is probable that the economic benefits
associated with the transaction will flow into the Group.
Revenue comprises the value of software license sales, professional services
(included installation), support services and distribution agreements. Revenue
is recognised when (i) persuasive evidence of an arrangement exists; (ii)
delivery has occurred or services have been rendered; (iii) the sales price has
been fixed and determinable; and (iv) collectability is reasonably assured.
For software arrangements with multiple elements, revenue is recognised
dependent on whether vendor-specific objective evidence ("VSOE") of fair value
exists for each of the elements. VSOE is determined by reference to sales to
external customers made on a stand-alone basis. Where there is no VSOE revenue
is recognised rateably over the full term of each contract.
Revenue from standard license products which are not modified to meet the
specific requirements of each customer is recognised when the risks and rewards
of ownership of the product are transferred to the customer, which generally is
over the period of the underlying contract.
Revenue from professional services, including consulting, is recognised as the
applicable services are provided, and from consulting engagements when all
obligations under the consulting agreement have been fulfilled.
Software and distribution agreement with third parties are recognised in
accordance with the underlying contractual agreements. Where separate services
are delivered, revenue is recognised on delivery of the service.
The excess of amounts invoiced and future invoicing over revenue recognised is
included in deferred Income. If the amount of revenue recognised exceeds the
amounts invoiced the excess amount is included within accounts receivable.
Intangible Assets - Research and Development Expenditure
Expenditure associated with developing and maintaining the Group's software
products are recognised as incurred. Where, however, new product development
projects are technically feasible, production and sale is intended, a market
exists, expenditure can be measured reliably, and sufficient resources are
available to complete such projects, development expenditure is capitalised
until initial commercialisation of the product, and thereafter amortised on a
straight-line basis over its estimated useful life. Staff costs and specific
third party costs involved with the development of the software are included
within amounts capitalised.
Impairment Tests
The Group considers whether there is any indication that non-current assets are
impaired on an annual basis. If there is such an indication, the Group carries
out an impairment test by measuring the assets' recoverable amount, which is the
higher of the assets' fair value less costs to sell and their value in use. If
the recoverable amount is less than the carrying amount an impairment loss is
recognised.
Taxation
The charge for taxation is based on the profit for the period and takes into
account deferred taxation. Taxation is computed using the liability method.
Under this method, deferred tax assets and liabilities are determined based on
temporary differences between the financial reporting and tax bases of assets
and liabilities and are measured using enacted rates and laws that will be in
effect when the differences are expected to reverse. The deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in
a transaction that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred tax assets are recognised to the extent that
it is probable that future taxable profits will arise against which the
temporary differences will be utilised.
Deferred tax is provided on temporary differences arising on investments in
subsidiaries except where the timing of the reversal of the temporary difference
is controlled by the Group and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax assets and liabilities
arising in the same tax jurisdiction are offset.
In the UK and the US, the Group is entitled to a tax deduction for amounts
treated as compensation on exercise of certain employee share options under each
jurisdiction's tax rules. As explained under "Share-based payments" below, a
compensation expense is recorded in the Group's statement of comprehensive
income over the period from the grant date to the vesting date of the relevant
options. As there is a temporary difference between the accounting and tax
bases a deferred tax asset is recorded. The deferred tax asset arising is
calculated by comparing the estimated amount of tax deduction to be obtained in
the future (based on the Company's share price at the balance sheet date) with
the cumulative amount of the compensation expense recorded in the statement of
comprehensive income. If the amount of estimated future tax deduction exceeds
the cumulative amount of the remuneration expense at the statutory rate, the
excess is recorded directly in equity against retained earnings.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, deposits held with banks and
short term highly liquid investments. For the purpose of the cash flow
statement, cash and cash equivalents comprise of cash on hand, deposits held
with banks and short term high liquid investments.
Share-Based Payments
The Group grants share options to certain employees. In accordance with IFRS 2,
"Share-Based Payments" equity-settled share-based payments are measured at fair
value at the date of grant. Fair value is measured by use of the Black-Scholes
pricing model as appropriately amended. The fair value determined at the date of
grant of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of the number of
shares that will eventually vest.
The share-based payments charge is included in net operating expenses and is
also included in 'Other reserves'.
2. Critical accounting estimates and judgements
The preparation of financial statements in accordance with generally accepted
accounting principles requires the directors to make critical accounting
estimates and judgements that affect the amounts reported in the financial
statements and accompanying notes. The estimates and assumptions that have a
significant risk of causing material adjustment to the carrying value of assets
and liabilities within the next financial year are discussed below:-
· Provision for impairment of trade receivables:- the Group assesses trade
receivables for impairment which requires the directors to estimate the
likelihood of payment forfeiture by customers.
· Revenue recognition:- the Group assesses the economic benefit that will
flow from future milestone payments in relation to sub-licensing partnership
arrangements. This requires the directors to estimate the likelihood of the
Group, its partners, and sub-licensees meeting their respective commercial
milestones and commitments.
· Capitalisation of development expenditure:- the Group capitalises
development costs provided the conditions laid out previously have been met.
Consequently the directors require to continually assess the commercial
potential of each product in development and its useful life following launch.
· Provisions for income taxes:-the Group is subject to tax in the UK and US
and this requires the directors to regularly assess the applicability of its
transfer pricing policy.
· Share-based payments:-the Group requires to make a charge to reflect the
value of share-based equity-settled payments in the period. At each grant of
options and balance sheet date, the directors are required to consider whether
there has been a change in the fair value of share options due to factors
including number of expected participants.
3. Net operating expenses
+--------------------------------------------+--------+--------+
| | | |
| Net operating expenses are comprised of | | |
| the follows:- | | |
+--------------------------------------------+--------+--------+
| | 2010 | 2009 |
+--------------------------------------------+--------+--------+
| | $'000 | $'000 |
+--------------------------------------------+--------+--------+
| Sales and marketing expenses | 7,102 | 6,110 |
+--------------------------------------------+--------+--------+
| Client servicing | 4,037 | 4,017 |
+--------------------------------------------+--------+--------+
| Research and development | 3,785 | 2,960 |
+--------------------------------------------+--------+--------+
| Administrative expenses | 3,314 | 2,662 |
+--------------------------------------------+--------+--------+
| Share-based payments | 114 | 82 |
+--------------------------------------------+--------+--------+
| Depreciation of plant and equipment | 192 | 204 |
+--------------------------------------------+--------+--------+
| Amortisation of intangible assets | 253 | 176 |
+--------------------------------------------+--------+--------+
| Exchange (loss)/gain | (16) | 51 |
+--------------------------------------------+--------+--------+
| Net operating expenses | 18,781 | 16,262 |
+--------------------------------------------+--------+--------+
4. Tax on profit on ordinary activities
+--------------------------------------------+-------+-------+----------+
| | 2010 | 2009 | |
+--------------------------------------------+-------+-------+----------+
| | $'000 | $'000 | |
+--------------------------------------------+-------+-------+----------+
| Profit on ordinary activities before tax | 7,258 | 5,870 | |
+--------------------------------------------+-------+-------+----------+
| Current tax | | | |
+--------------------------------------------+-------+-------+----------+
| Corporation tax on profits of the year | 2,005 | 1,620 | |
+--------------------------------------------+-------+-------+----------+
| Foreign exchange on taxation in the year | 58 | 24 | |
+--------------------------------------------+-------+-------+----------+
| Adjustments for prior years | (257) | (543) | |
+--------------------------------------------+-------+-------+----------+
| Total current tax charge | 1,806 | 1,101 | |
+--------------------------------------------+-------+-------+----------+
| Deferred tax | | | |
+--------------------------------------------+-------+-------+----------+
| Origination & reversal of timing | (73) | 122 | |
| differences | | | |
+--------------------------------------------+-------+-------+----------+
| Adjustments for prior years | - | 199 | |
+--------------------------------------------+-------+-------+----------+
| Total deferred tax (credit)/charge | (73) | 321 | |
+--------------------------------------------+-------+-------+----------+
| | | | |
+--------------------------------------------+-------+-------+----------+
| Tax on profit on ordinary activities | 1,733 | 1,422 | |
+--------------------------------------------+-------+-------+----------+
| | | | |
+--------------------------------------------+-------+-------+----------+
| The difference between the current tax charge on ordinary | |
| activities for the year, reported in the consolidated | |
| statement of comprehensive income, and the current tax | |
| charge that would result from applying a relevant standard | |
| rate of tax to the profit on ordinary activities before | |
| tax, is explained as follows: | |
+ +----------+
| | |
+------------------------------------------------------------+--------------------------------------------+
| | | | |
+--------------------------------------------+-------+-------+----------+
| Profit on ordinary activities at the UK | 2,032 | 1,644 | |
| tax rate 28% (2009: 28%) | | | |
+--------------------------------------------+-------+-------+----------+
| Effects of | | | |
+--------------------------------------------+-------+-------+----------+
| Adjustment in respect of prior years | | | |
+--------------------------------------------+-------+-------+----------+
| Current tax | (257) | (543) | |
+--------------------------------------------+-------+-------+----------+
| Deferred tax | - | 199 | |
+--------------------------------------------+-------+-------+----------+
| State tax | 49 | 43 | |
+--------------------------------------------+-------+-------+----------+
| Additional US tax on profits 34% (2009: | 59 | 51 | |
| 34%) | | | |
+--------------------------------------------+-------+-------+----------+
| Foreign Exchange | (33) | 24 | |
+--------------------------------------------+-------+-------+----------+
| Expenses not deductible for tax purposes | (1) | 17 | |
+--------------------------------------------+-------+-------+----------+
| Tax deduction on share plan charges | (116) | (13) | |
+--------------------------------------------+-------+-------+----------+
| Total tax charge | 1,733 | 1,422 | |
+--------------------------------------------+-------+-------+----------+
5. Dividends
The dividends paid during the year were as follows:-
+--------------------------------------------+-------+-------+
| | 2010 | 2009 |
+--------------------------------------------+-------+-------+
| | $'000 | $'000 |
+--------------------------------------------+-------+-------+
| Final dividend, re 30 June 2009 - 4.76 | 1,220 | 1,172 |
| cents (2.9 pence)/share | | |
+--------------------------------------------+-------+-------+
| Interim dividend, re 30 June 2010 - 7.05 | 1,772 | 745 |
| cents (4.7 pence)/share | | |
+--------------------------------------------+-------+-------+
| Total dividends paid to company | 2,992 | 1,917 |
| shareholders in the year | | |
+--------------------------------------------+-------+-------+
The proposed final dividend is subject to approval by the shareholders at the
Annual General Meeting and has not been included as a liability in these
accounts.
6. Earnings per share
a) Basic
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of shares in issue
during the year.
+--------------------------------------------------+--------+--------+
| | 2010 | 2009 |
+--------------------------------------------------+--------+--------+
| Profit attributable to equity holders of the | 5,525 | 4,448 |
| Company ($'000) | | |
+--------------------------------------------------+--------+--------+
| Weighted average number of ordinary shares in | 25,315 | 25,187 |
| issue (thousands) | | |
+--------------------------------------------------+--------+--------+
| Basic earnings per share ($ per share) | 0.218 | 0.177 |
+--------------------------------------------------+--------+--------+
b) Diluted
For diluted earnings per share, the weighted average number of ordinary shares
calculated above is adjusted to assume conversion of all dilutive potential
ordinary shares. The Group has one category of dilutive potential ordinary
shares, being those share options granted to directors and employees under the
share option scheme.
+--------------------------------------------------+--------+--------+
| | 2010 | 2009 |
+--------------------------------------------------+--------+--------+
| Profit attributable to equity holders of the | 5,525 | 4,448 |
| Company ($'000) | | |
+--------------------------------------------------+--------+--------+
| Weighted average number of ordinary shares in | 25,315 | 25,187 |
| issue (thousands) | | |
+--------------------------------------------------+--------+--------+
| Adjustment for: | 1,005 | 1,007 |
| - Share options (thousands) | | |
+--------------------------------------------------+--------+--------+
| Weighted average number of ordinary shares for | 26,320 | 26,194 |
| diluted | | |
| earnings per share (thousands) | | |
+--------------------------------------------------+--------+--------+
| Diluted earnings per share ($ per share) | 0.210 | 0.170 |
+--------------------------------------------------+--------+--------+
7. Intangible assets
Research and development and computer software
+----------------+---------+----------+-------+---------+----------+-------+
| | Group | Company |
+----------------+----------------------------+----------------------------+
| | In | Computer | | In | Computer | |
| | Process | | | Process | | |
+----------------+---------+----------+-------+---------+----------+-------+
| | R & D | Software | Total | R & D | Software | Total |
+----------------+---------+----------+-------+---------+----------+-------+
| | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 |
+----------------+---------+----------+-------+---------+----------+-------+
| Cost | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 1 July 2009 | 1,886 | 271 | 2,157 | 1,886 | 208 | 2,094 |
+----------------+---------+----------+-------+---------+----------+-------+
| Additions | 499 | 22 | 521 | 499 | 19 | 518 |
+----------------+---------+----------+-------+---------+----------+-------+
| At 30 June | 2,385 | 293 | 2,678 | 2,385 | 227 | 2,612 |
| 2010 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| Amortisation | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 1 July 2009 | 725 | 226 | 951 | 725 | 172 | 897 |
+----------------+---------+----------+-------+---------+----------+-------+
| Charge for the | 219 | 34 | 253 | 219 | 29 | 248 |
| year | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 30 June | 944 | 260 | 1,204 | 944 | 201 | 1,145 |
| 2010 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| NBV at 30 June | 1,441 | 33 | 1,474 | 1,441 | 26 | 1,467 |
| 2010 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| Cost | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 1 July 2008 | 1,317 | 252 | 1,569 | 1,317 | 194 | 1,511 |
+----------------+---------+----------+-------+---------+----------+-------+
| Additions | 569 | 19 | 588 | 569 | 14 | 583 |
+----------------+---------+----------+-------+---------+----------+-------+
| At 30 June | 1,886 | 271 | 2,157 | 1,886 | 208 | 2,094 |
| 2009 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| Amortisation | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 1 July 2008 | 599 | 176 | 775 | 599 | 127 | 726 |
+----------------+---------+----------+-------+---------+----------+-------+
| Charge for the | 126 | 50 | 176 | 126 | 44 | 170 |
| year | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| At 30 June | 725 | 226 | 951 | 725 | 171 | 896 |
| 2009 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
| NBV at 30 June | 1,161 | 45 | 1,206 | 1,161 | 37 | 1,198 |
| 2009 | | | | | | |
+----------------+---------+----------+-------+---------+----------+-------+
8. Called up share capital
Authorised
+----------------------------+------------+-------+------------+-------+
| | 2010 | 2009 |
+----------------------------+--------------------+--------------------+
| | Number | $'000 | Number | $'000 |
+----------------------------+------------+-------+------------+-------+
| Equity share capital | | | | |
+----------------------------+------------+-------+------------+-------+
| Ordinary shares of 1p each | 50,000,000 | 1,014 | 50,000,000 | 1,014 |
+----------------------------+------------+-------+------------+-------+
Allotted called-up and fully paid
+----------------------------+------------+-------+------------+-------+
| | 2010 | 2009 |
+----------------------------+--------------------+--------------------+
| | Number | $'000 | Number | $'000 |
+----------------------------+------------+-------+------------+-------+
| Equity share capital | | | | |
+----------------------------+------------+-------+------------+-------+
| Ordinary shares of 1p each | 25,365,850 | 512 | 25,297,750 | 512 |
+----------------------------+------------+-------+------------+-------+
The movement in share capital during the year is represented as follows:
· 68,100 Ordinary Share options were exercised in the year.
9. Cash flow generated from operating activities
+----------------------------------+---------+-------+---------+-------+
| | | |
| Reconciliation of profit before tax to net | | |
| cash inflow from operating activities | | |
+----------------------------------------------------+---------+-------+
| | | | | |
+----------------------------------+---------+-------+---------+-------+
| | Group | Company |
+----------------------------------+-----------------+-----------------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------------------+---------+-------+---------+-------+
| | $'000 | $'000 | $'000 | $'000 |
+----------------------------------+---------+-------+---------+-------+
| Profit before tax | 7,258 | 5,870 | 6,280 | 5,012 |
+----------------------------------+---------+-------+---------+-------+
| Finance income | (195) | (520) | (195) | (520) |
+----------------------------------+---------+-------+---------+-------+
| Depreciation on plant and | 192 | 204 | 129 | 143 |
| equipment | | | | |
+----------------------------------+---------+-------+---------+-------+
| Amortisation on intangible | 253 | 176 | 248 | 170 |
| assets | | | | |
+----------------------------------+---------+-------+---------+-------+
| Share-based payments | 114 | 82 | 52 | 32 |
+----------------------------------+---------+-------+---------+-------+
| Movements in working capital: | | | | |
+----------------------------------+---------+-------+---------+-------+
| Increase in trade and other | (3,385) | (452) | (1,030) | (96) |
| receivables | | | | |
+----------------------------------+---------+-------+---------+-------+
| Increase in trade and other | 4,669 | 2,018 | 3,088 | 1,404 |
| payables | | | | |
+----------------------------------+---------+-------+---------+-------+
| Cash generated from operations | 8,906 | 7,378 | 8,572 | 6,145 |
+----------------------------------+---------+-------+---------+-------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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