RNS Number:4351O
County Contact Centres PLC
21 February 2008
21 February 2008
County Contact Centres PLC
Interim results for the six months ended 31 December 2007
Highlights
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2007 2006 2007
(unaudited) (unaudited) (unaudited)
� � �
Revenue 1,805,123 1,726,652 3,572,059
Profit before 138,019 210,240 353,918
taxation
* First set of statements prepared under the International Financial
Reporting Standards
* Share Premium Account cancelled
* Sales increased by �78,471 compared with the corresponding prior
year period
* Profit of �138,019 reflecting the difficult trading conditions
* Investment in new telephone switch
* Additional non-executive Director appointed
For further enquiries:
William Catchpole - Managing Director (01473 321 800)
Stuart Gordon - Financial Director
Richard Evans - Brewin Dolphin Ltd, Nominated Adviser (0845 270 8600)
CHAIRMAN'S STATEMENT
Financial Summary
The board is pleased to report continued progress although increased costs and
slower revenue generation have impacted profitability during the last six
months.
The Group profit before taxation for the six months to December 2007 is
�138,019, (December 2006: �210,240), achieved on turnover of �1,805,123
(December 2006: �1,726,652)
In preparing the figures for the 6 months to 31 December 2007 we have made the
transition from UK GAAP to International Financial Reporting Standards ("IFRS").
There are many changes in the way we report our results and, in particular, a
review of the capitalisation of development costs was undertaken. This
highlighted that the capitalisation of development costs is not discretionary
under International Accounting Standard 38, if certain criteria are met, and
therefore the capitalisation and amortisation of these costs is now mandatory.
As such, the Group has capitalised and amortised the development work undertaken
within the CallScripter division.
This created an Intangible asset carried forward in the Balance Sheet at June
2007 of �182,770, which increased profits in the years ending June 2007, 2006
and prior by �54,957, �70,179, and �57,634 respectively (Note 4).
In addition, under IFRS a holiday pay provision must be accrued. As our holiday
year runs from January to December, a provision is required each June, which is
then released each December. A brought forward provision of �32,100 was created
at June 2006, which was then released in December 2006. A new accrual of �38,000
was created in June 2007, and this was then released in December 2007 (Note 4).
During the year to 30 June 2007, the Company decided to reorganise its capital
and convened an Extraordinary General Meeting to obtain shareholder approval.
Following subsequent court proceedings, the capital re-organisation became
effective on the 6 August 2007. This reorganisation has had a positive effect on
the Balance Sheet. The effect of the capital reorganisation appears in the
Condensed Consolidated Statement of Changes in Equity and in Note 8 and it
should be noted that while Total equity remains unchanged, the Profit and Loss
Account reflects a positive balance.
Business Summary
County Contact Centres PLC operates through two principal subsidiaries, County
Contact Centres (UK) Limited and CallScripter Limited.
The Group trades under two main trading styles namely Ansaback and CallScripter.
Ansaback is a 24 hours a day, 7 days a week bureau telephony service providing
overflow and out of hours call handling, emergency cover, dedicated phone
resources, non-geographic, low call and Freephone telephone facilities as well
as disaster recovery lines and other ancillary telecommunication services.
CallScripter is an enhanced customer interaction software suite specifically
developed for contact centres, telesales and telemarketing operations. Our
clients gain major benefits by introducing CallScripter's dynamic scripting
environment into their organisation. The software facilitates the rapid set-up,
handling and reporting of sophisticated inbound, outbound and e-mail campaigns.
Review of Operations
Ansaback
The call volumes in July, August and September were 11% up compared to the same
period last year, while client numbers remained consistent with no key account
desertions. As we have a significant number of TV shopping and mail order
clients, we eagerly awaited the upturn in calls relating to the Christmas
season. Unfortunately, one major TV client was quieter than in the previous year
and we saw a 4% fall in October calls. However, as has been customary, November
became a new record high for billable minutes and this momentum carried on into
December resulting in a satisfactory outcome for the division. Overall however
the sales increase was not as hoped.
The Ansaback Sales Director returned from maternity leave in August and
subsequently left the Group in October. The existing team, led by the Sales
Manager, covered the interim position and will be joined by a new manager, with
a wide ranging brief, who will commence work during the first half of 2008.
Significant investment in new infrastructure has occurred during the period. The
network has been upgraded and a new telephony switch was ordered to replace the
system that has been serving us since 2000. This new switch will enable
significant tuning of the call distribution into Ansaback thus allowing us to
improve further our service to clients. It is planned to commission the new
switch during the first few months of 2008.
The outlook for new contracts remains good enabling us to continue building the
business. These contracts, along with the retention of our client base, are key
to the continued profitable progress of this division.
CallScripter
We are pleased to announce that we have strengthened the sales department. This
enlarged sales team will allow CallScripter to capitalise on our market position
and enable us to unlock its potential. The division has already achieved a good
start to the New Year by winning a �45,000 contract.
Whilst the OEM collaboration with Interactive Intelligence has resulted in
additional business, these sales unfortunately remain lower than originally
anticipated.
In September, we launched a hosted version of CallScripter running within a
web-farm based in London. This new service is ideally placed for the
home-worker market and has attracted significant interest with 2 new clients
already using the application.
Risks
A key risk within Ansaback is the technology utilised in the call centre and as
such we have contracted to invest in a 'state of the art' modern telephone
switch. This new switch will include fail-over systems to further increase our
business continuity / disaster recovery readiness whilst also enabling us to
offer additional services to clients. Looking at other risks, to lower our
susceptibility to power outages, we have a standby generator in case of power
cuts, while our main computer systems have been upgraded to improve their
resilience and minimise any down-time should a problem arise.
The risks to the CallScripter division continue to be in the ability of our
internal sales team and the partner resellers to achieve market penetration. We
are confident that the sales targets can be achieved.
Dividend
The Company will not be declaring a dividend.
Outlook
There are difficult trading times ahead, but with the addition of the new
CallScripter Sales Executives and the new Ansaback General Manager we hope to
further increase sales, which will drive through to improved profitability.
In addition, we are pleased to welcome Stephen Allen as a non-executive Director
of the Group. Stephen has experience of selling software products on a global
basis, being previously Chairman of Atlantic Global PLC, and will add
significantly to the resources available to our software division.
Whilst the outlook for the remainder of the year is challenging, the Directors
remain confident about the future prospects for the Group.
Philip Dayer
Chairman
21 February 2008
CONDENSED CONSOLIDATED INCOME STATEMENT
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2007 2006 2007
Note (unaudited) (unaudited) (unaudited)
� � �
Revenue 1,805,123 1,726,652 3,572,059
Cost of sales -950,655 -926,688 -2,020,331
--------- --------- ----------
Gross profit 854,468 799,964 1,551,728
Net operating expenses -727,320 -588,203 -1,199,736
--------- --------- ----------
Operating profit 127,148 211,761 351,992
Finance income 15,490 3,007 10,962
Finance expenditure -4,619 -4,528 -9,036
--------- --------- ----------
Profit before taxation 138,019 210,240 353,918
Tax 7 - 23,000 61,000
--------- --------- ----------
Profit for the period 138,019 233,240 414,918
========= ========= ==========
Attributable to:
--------- --------- ----------
Equity shareholders of the
parent 138,019 233,240 414,918
========= ========= ==========
Basic and diluted earnings
per share 6 0.5p 0.8p 1.4p
CONDENSED CONSOLIDATED BALANCE SHEET
31-Dec 31-Dec 30-Jun
2007 2006 2007
Note (unaudited) (unaudited) (unaudited)
� � �
Assets
Non current assets
Intangible assets 4.5 203,735 155,313 182,770
Plant and equipment 198,564 63,331 79,727
Deferred taxation 7 76,000 38,000 76,000
---------- ---------- ----------
Non-current assets 478,299 256,644 338,497
Current assets
Trade and other receivables 654,443 597,121 660,243
Cash and cash equivalents 324,637 334,614 413,890
---------- ---------- ----------
Current assets 979,080 931,735 1,074,133
---------- ---------- ----------
Total assets 1,457,379 1,188,379 1,412,630
========== ========== ==========
Liabilities
Non current liabilities
Long term borrowings - -65,155 -34,564
---------- ---------- ----------
Non current liabilities - -65,155 -34,564
Current liabilities
Trade and other payables -494,451 -467,659 -544,156
Current portion of long term
borrowings -55,161 -67,495 -64,162
---------- ---------- ----------
Current liabilities -549,612 -535,154 -608,318
---------- ---------- ----------
Total liabilities -549,612 -600,309 -642,882
---------- ---------- ----------
Net assets 907,767 588,070 769,748
========== ========== ==========
Equity
Equity attributable to shareholders
of County Contact Centres PLC
Share capital 4 297,908 297,908 297,908
Share premium account 4 - 6,045,563 6,045,563
Other reserves 4 18,396 18,396 18,396
Profit and Loss Account 4 591,463 -5,773,797 -5,592,119
---------- ---------- ----------
Total equity 907,767 588,070 769,748
========== ========== ==========
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2007 2006 2007
(unaudited) (unaudited) (unaudited)
� � �
Cash flows from operating activities
Profit for the period 138,019 233,240 414,918
adjustments for:
Interest received -15,490 -3,007 -10,962
Interest paid 3,245 3,438 6,233
Interest element of finance leases 1,374 1,090 2,803
Deferred tax provision - -38,000 -61,000
Depreciation 18,229 16,598 36,252
Amortisation 32,789 23,000 45,991
(Increase)/decrease in trade and
other receivables 5,800 -91,677 -169,799
(Decrease)/increase in trade and
other payables -124,557 21,673 78,058
---------- ---------- ----------
Cash generated from operations 59,409 166,355 342,494
Interest paid -3,245 -3,438 -6,233
Interest element of finance leases -1,374 -1,090 -2,803
Tax paid - -15,000 -15,000
---------- ---------- ----------
Net cash generated from operating
activities 54,790 146,827 318,458
---------- ---------- ----------
Cash flows from investing activities
Interest received 15,490 3,007 10,962
Capitalisation of development costs -53,754 -50,500 -100,948
Purchase of property, plant and
equipment -72,206 -15,200 -51,250
---------- ---------- ----------
Net cash used in investing
activities -110,470 -62,693 -141,236
---------- ---------- ----------
Cash flows from financing activities
Repayments of borrowings -25,001 -25,000 -50,000
Capital element of finance leases -8,572 -24,412 -13,224
---------- ---------- ----------
Net cash used in financing
activities -33,573 -49,412 -63,224
---------- ---------- ----------
Net (decrease)/increase in cash -89,253 34,722 113,998
========== ========== ==========
Cash at beginning of the period 413,890 299,892 299,892
Net (decrease)/increase in cash -89,253 34,722 113,998
---------- ---------- ----------
Cash at the end of the period 324,637 334,614 413,890
========== ========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Profit
And
Share Share Other Loss Total
Capital Premium Reserves Account Equity
� � � � �
Balance at 1st July
2006 297,908 6,045,563 18,396 -6,102,750 259,117
Intangible assets - - - 127,813 127,813
Accruals - holiday
pay provision - - - -32,100 -32,100
---------- ---------- ---------- ---------- ----------
Balance at 1st July
2006 (revised) 297,908 6,045,563 18,396 -6,007,037 354,830
Profit for the
period - - - 173,640 173,640
Intangible
assets - - - 27,500 27,500
Accruals - holiday
pay provision - - - 32,100 32,100
---------- ---------- ---------- ---------- ----------
Total recognised
income and expense
for the period - - - 233,240 233,240
---------- ---------- ---------- ---------- ----------
Balance at 31st
December 2006 297,908 6,045,563 18,396 -5,773,797 588,070
Profit for the
period - - - 192,221 192,221
Intangible assets - - - 27,457 27,457
Accruals - holiday
pay provision - - - -38,000 -38,000
---------- ---------- ---------- ---------- ----------
Total recognised
income and expense
for the period - - - 181,678 181,678
---------- ---------- ---------- ---------- ----------
Balance at 30th
June 2007 297,908 6,045,563 18,396 -5,592,119 769,748
Profit for the
period - - - 138,019 138,019
Capital
reorganisation - -6,045,563 - 6,045,563 -
---------- ---------- ---------- ---------- ----------
Total recognised
income and expense
for the period - -6,045,563 - 6,183,582 138,019
---------- ---------- ---------- ---------- ----------
Balance at 31st
December 2007 297,908 - 18,396 591,463 907,767
========== ========== ========== ========== ==========
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Nature of operations and general information
The Company operates principally as a holding company. The main subsidiaries are
engaged in the provision of a 24 hours a day, 7 days a week out of hours and
overflow telephony service and the development and sale of call centre contact
relationship management software.
County Contact Centres PLC is the Group's ultimate parent company. It is
incorporated and domiciled in the United Kingdom. The address of County Contact
Centres PLC's registered office is also its principal place of business. County
Contact Centres PLC's shares are listed on the Alternative Investment Market of
the London Stock Exchange.
The Group's condensed consolidated interim financial statements (the "interim
financial statements") are presented in pounds sterling (�), which is also the
functional currency of the parent company.
These interim financial statements do not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The Group's statutory
financial statements for the year ended 30th June 2007, prepared under UK GAAP
(Generally Accepted Accounting Practice), have been filed with the Registrar of
Companies. The auditor's report on those financial statements was unqualified
and did not contain a statement under Section 237 (2) of the Companies Act 1985.
2. Basis of preparation of financial information
These interim financial statements are for the six months ended 31st December
2007. They have been prepared in accordance with IAS34 "International Financial
Reporting" and the requirements of IFRS 1 "First-time Adoption of International
Financial Reporting Standards" relevant to interim reports, because they are
part of the period covered by the Group's first IFRS financial statements for
the year ended 30th June 2008. They do not include all of the information
required for full annual financial statements and should be read in conjunction
with the consolidated financial statements of the Group for the year ended 30th
June 2007.
These interim financial statements have been prepared in accordance with the
accounting policies set out below which are based on the recognition and
measurement principles of IFRS in issue as adopted by the European Union (EU)
and are effective, or expected to be effective, at 30th June 2008, our first
annual reporting date at which we are required to use IFRS accounting standards
adopted by the EU.
These interim financial statements have been prepared under the historical cost
convention.
County Contact Centres PLC's consolidated financial statements were prepared in
accordance with UK GAAP until 30th June 2007. The date of transition to IFRS was
1st July 2006. The comparative figures in respect of 30th June 2007 have been
restated to reflect changes in accounting policies as a result of the adoption
of IFRS. The disclosures required by IFRS 1 concerning the transition from UK
GAAP are given in the reconciliation schedules and explained in Note 4.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these interim financial statements.
3. Summary of significant accounting policies
3.1 Basis of consolidation
The interim financial statements incorporate the financial statements of County
Contact Centres PLC ("the Company") and its subsidiary undertakings (together "
the Group"). A subsidiary is a company controlled directly by the Group and all
of the subsidiaries are 100% owned by the Group. Control is achieved where the
Group has the power to govern the financial and operating policies of the
investee entity so as to obtain benefits from its activities.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
3.2 Revenue
Revenue is measured by reference to the fair value of consideration received or
receivable by the Group for goods supplied and services provided, excluding VAT
and trade discounts. Revenue is recognised upon the performance of services or
the transfer of risk to the customer.
Call centre turnover is recognised on the basis of billable minutes in the
month, along with standing monthly charges and any specific supplementary
service charges.
Software license turnover is recognised at the point of sale, as it is at this
point that the Group has performed all of its obligations. Turnover from annual
maintenance and support contracts may be received in a single amount or in
monthly instalments. Such turnover is recognised over the period to which it
relates, reflecting the fact that customers could cancel the maintenance
contract if there were any disputes.
3.3 Intangible assets
The capitalisation of development costs is not discretionary under International
Accounting Standard 38, if certain criteria are met, and therefore the
capitalisation and amortisation of these costs is now mandatory.
Expenditure on research (or the research phase of an internal project) is
recognised as an expense in the period in which it is incurred.
Development costs incurred are capitalised when all of the following conditions
are satisfied:
* completion of the intangible asset is technically feasible so that
it will be available for use or sale
* the Group intends to complete the intangible assets and use or sell
it
* the intangible asset will generate probable future economic
benefits. Among other things, this requires that there is a market for the
output from the intangible asset itself, or, if it is to be used internally, the
asset will be used in generating such benefits
* there are adequate technical, financial and other resources to
complete the development and to use or sell the intangible asset
* the expenditure attributable to the intangible asset during the
development can be measured reliably
The costs of an internally generated intangible asset comprises all directly
attributable costs necessary to create, produce and prepare the asset to be
capable of operating in the manner intended by management. Directly attributable
costs include development engineer's salary and on-costs incurred on software
development. The cost of internally generated software developments are
recognised as intangible assets and are subsequently measured in the same way as
externally acquired software. However, until completion of the development
project, the assets are subject to impairment testing only.
Amortisation commences upon completion of the asset, and is shown within Net
Operating Expenses on the Income Statement. Amortisation is calculated to write
down the cost less estimated residual value of all intangible fixed assets by
equal annual instalments over their expected useful lives. The rates generally
applicable are:
* Research and Development 33%
Careful judgement by the Directors is applied when deciding whether the
recognition requirements for development costs have been met. This is necessary
as the economic success of any product development is uncertain and may be
subject to future technical problems at the time of recognition. Judgements are
based on the information available at each Balance sheet date. In addition, all
internal activities related to the research and development of new software
products are continuously monitored by the Directors.
3.4 Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any
recognised impairment losses. Leased plant is included in plant and equipment
only where it is held under a finance lease.
3.4.1 Disposal of assets
The gain or loss arising on disposal of an asset is determined as the difference
between the disposal proceeds and the residual value of the asset and is
recognised in the Income Statement.
3.4.2 Depreciation
Depreciation is calculated to write down the cost less estimated residual value
of all plant and equipment assets by equal annual instalments over their
expected useful lives. The rates generally applicable are:
* Motor vehicles 33%
* Plant and fittings 20% to 50%
* Computer equipment 33%
Material residual value estimates are updated as required, but at least
annually, whether or not the asset is revalued.
3.4.3 Impairment testing of other intangible assets, plant and
equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the Group at which
management monitors the related cash flows.
3.4.4 Leased assets
In accordance with IAS17, the economic ownership of a leased asset is
transferred to the lessee if the lessee bears substantially all the risks and
rewards related to the ownership of the leased asset. The related asset is
recognised at the time of inception of the lease at the fair value of the leased
asset or, if lower, the present value of the minimum lease payments plus
incidental payments, if any, to be borne by the lessee. A corresponding amount
is recognised as a finance leasing liability.
The interest element of leasing payments represents a constant proportion of the
capital balance outstanding and is charged to the Income Statement over the
period of the lease.
All other leases are regarded as operating leases and the payments made under
them are charged to the Income Statement on a straight-line basis over the lease
term. Lease incentives are spread over the term of the lease.
3.5 Financial instruments
The Group uses various financial instruments including loans, cash, receivables,
payables, and leasing that arise directly from its operations. The main purpose
of these financial instruments is to maintain adequate finance for the Group's
operations. The existence of these financial instruments exposes the Group to a
number of financial risks, which are described in detail below. The Directors
review and agree policies for managing each of these risks, as summarised below,
and these remain unchanged from previous years. Short term payables and
receivables have been excluded from disclosures (except currency disclosures).
3.5.1 Financial risk management and objectives
The Group seeks to manage financial risk to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably. The Directors achieve this by regularly preparing and reviewing
forecasts based on the trends shown in the monthly management accounts.
3.5.2 Credit risk
The Group's principal financial assets are cash and receivables, with the
principal credit risk arising from receivables. In order to manage credit risks
the Group conducts third party credit reviews on all new clients, takes deposits
where this is deemed necessary and collects payment by direct debit on all new
Ansaback accounts, limiting the exposure to a build up of a large outstanding
debt. The Group also conducts third party credit reviews on CallScripter
accounts, which also have an agreed payment plan tailored to the risk of the
individual client.
3.5.3 Interest rate risk
The Group finances its operations through a mixture of cash and loans and has
some risk to interest rate movements on the outstanding loans which are not
deemed significant in the short to medium term.
3.5.4 Liquidity risk
The Group aims to mitigate liquidity risk by closely monitoring cash generation
and expenditure. Cash is monitored daily and forecasts are regularly prepared to
ensure that the movements are in line with the Directors' strategy.
3.5.5 Foreign currencies
The Group does not sell or buy any currency forward or enter into any hedging
contracts and does not hold any significant balances in foreign currencies.
3.6 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short-term highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an insignificant risk of
changes in value.
3.7 Dividends
Dividend distributions payable to equity shareholders are included in "other
short term financial liabilities" when the dividends are approved in general
meeting prior to the Balance sheet date.
3.8 Equity
Equity comprises the following:
* "Share capital" represents the nominal value of equity shares
* "Share premium" represents the excess over nominal value of the
fair value of consideration received for equity shares, net of expenses of the
share issue
* "Other reserves" represents the merger reserve created at the
initial demerger of the company
* "Profit and loss reserve" represents retained profits
3.9 Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the Balance sheet
date. Non-monetary items that are measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Any exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
initially recorded are recognised in the Profit and Loss Account in the period
in which they arise. Exchange differences of non-monetary items are recognised
in the statement of recognised income and expenses to the extent that they
relate to a gain or loss on that non-monetary item taken to the statement of
recognised income and expenses, otherwise such gains and losses are recognised
in the Income Statement.
3.10 Deferred taxation
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting policy. Temporary differences
include those associated with shares in subsidiaries and joint ventures if
reversal of these temporary differences can be controlled by the Group and it is
probable that reversal will not occur in the foreseeable future. In addition,
tax losses available to be carried forward as well as other income tax credits
to the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax
assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the Balance
sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that are
charged directly to equity, in which case the deferred tax is also charged or
credited directly to equity.
3.11 Contribution to defined contribution pension schemes
The pension costs charged against profits represent the amount of the
contributions payable to the schemes in respect of the accounting period.
3.12 Share options
All material share-based payment arrangements granted after 7th November 2002
that had not vested prior to 1st July 2006 are recognised in the financial
statements.
All equity-settled share-based payments are ultimately recognised as an expense
in the Profit and Loss Account with a corresponding credit to "other reserve".
If vesting periods or other non-market vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest. Estimates are revised subsequently if
there is any indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense
recognised in prior periods if share options that have vested are not exercised.
Upon exercise of share options, the proceeds received net of attributable
transactions are credited to share capital, and where appropriate share premium.
3.12 Share options (continued)
The fair value of the share options granted after 7th November 2002 and not
vested at 1st July 2006 has been assessed in accordance with IFRS 2 -
Share-based Payments. The Directors do not consider that the amounts involved
are material and therefore no charge has been recognised.
4. Transition to IFRS
4.1 Basis of transition to IFRS
These interim financial statements have been prepared in accordance with the
recognition and measurement principles of International Financial Reporting
Standards (IFRS's) for the first time. The disclosures required by IFRS 1 "
First-time Adoption of International Financial Reporting Standards" are given in
Notes 4.2 to 4.5.
The Group's transition date is 1st July 2006. Comparative data for the year
ending 30th June 2007 has been translated to conform to the new accounting
policies set out above.
These new policies reflect exemptions from restating certain financial
information as permitted by IFRS 1. The Group has taken exemptions under IFRS 2
(Share based payments). In accordance with the transitional provisions, IFRS 2
has been applied to all grants of equity instruments after 7th November 2002
that were unvested at the date of the adoption.
4.2 Reconciliation of equity at 1st July 2006
Effect of
UK transition
GAAP to IFRS IFRS
� � �
Share capital 297,908 - 297,908
Share premium account 6,045,563 - 6,045,563
Other reserves 18,396 - 18,396
Profit and Loss Account -6,102,750 95,713 -6,007,037
---------- ---------- ----------
Balance at 1st July 2006 259,117 95,713 354,830
========== ========== ==========
The Profit and Loss Account has been increased by �127,813 at 1st July 2006 due
to the capitalisation and amortisation of the development work undertaken within
the CallScripter division. The Intangible fixed assets have also increased by
the same as analysed in Note 4.5.
The Group holiday year runs from January to December and as a holiday pay
provision is mandatory under IFRS the Profit and Loss Account has been decreased
by �32,100 at 1st July 2006 to cover the cost of holidays accrued but not yet
taken at 30th June 2006.
4.3 Reconciliation of profit before taxation and equity at 31st December
2006
Effect of
UK transition
GAAP to IFRS IFRS
� � �
Revenue 1,726,652 - 1,726,652
Cost of Sales -942,788 16,100 -926,688
Net operating expenses -631,703 43,500 -588,203
Other expenses -1,521 - -1,521
---------- ---------- ----------
Profit before taxation 150,640 59,600 210,240
========== ========== ==========
Share capital 297,908 - 297,908
Share premium account 6,045,563 - 6,045,563
Other reserves 18,396 - 18,396
Profit and Loss Account -5,929,110 155,313 -5,773,797
---------- ---------- ----------
Balance at 31st December 2006 432,757 155,313 588,070
========== ========== ==========
The Profit and Loss Account has been increased by �155,313 at 31st December 2006
due to the capitalisation and amortisation of the development work undertaken
within the CallScripter division and the adjustment for the holiday pay
provision.
The capitalisation and amortisation is made up of a prior year element of
�127,813 and an adjustment in the period of �27,500. The Intangible fixed assets
have also increased by the same as analysed in Note 4.5. The holiday pay
provision of �32,100, accrued in the prior year, was released in December 2006,
as it was no longer required.
4.4 Reconciliation of profit before taxation and equity at 30th June 2007
Effect of
UK transition
GAAP to IFRS IFRS
� � �
Revenue 3,572,059 - 3,572,059
Cost of Sales -2,014,931 -5,400 -2,020,331
Net operating expenses -1,254,193 54,457 -1,199,736
Other income 1,926 - 1,926
---------- ---------- ----------
Profit before taxation 304,861 49,057 353,918
========== ========== ==========
Share capital 297,908 - 297,908
Share premium account 6,045,563 - 6,045,563
Other reserves 18,396 - 18,396
Profit and Loss Account -5,736,889 144,770 -5,592,119
---------- ---------- ----------
Balance at 30th June 2007 624,978 144,770 769,748
========== ========== ==========
The Profit and Loss Account has been increased by �144,770 at 30th June 2007 due
to the treatment of the capitalisation and amortisation of the development work
undertaken within the CallScripter division and the adjustment for the holiday
pay provision.
The capitalisation and amortisation is made up of a prior year element of
�127,813 and an adjustment in the period of �54,457. The Intangible fixed assets
have also increased by the same as analysed in Note 4.5. The holiday pay
provision of �32,100, accrued in the prior year, was released in December 2006,
as it was no longer required, while a new accrual of �38,000 was made at June
2007.
4.5 Reconciliation of intangible assets at 30th June 2007
In preparing the figures for the 6 months to 31st December 2007, we have made
the transition from UK GAAP to IFRS and a review of the capitalisation of
development costs was undertaken. This highlighted that the capitalisation of
development costs is not discretionary under International Accounting Standard
38, if certain criteria are met, and therefore the capitalisation and
amortisation of these costs is now mandatory. As such, the Group has capitalised
and amortised the development work undertaken within the CallScripter division.
The following table highlights the effects of the transition to IFRS on the
capitalisation and amortisation of intangible assets.
Development
Costs
�
Carrying amount at 30th June 2006 under UK GAAP -
Additions - prior years 147,613
Amortisation - prior years -19,800
----------
Carrying amount at 1st July 2006 under IFRS 127,813
Additions 50,500
Amortisation -23,000
----------
Carrying amount at 30th December 2006 155,313
Additions 50,448
Amortisation -22,991
----------
Carrying amount at 1st July 2007 182,770
Additions 53,754
Amortisation -32,789
----------
Carrying amount at 30th December 2007 203,735
==========
5. Segmental information
County Contact Centres PLC operates two business sectors, Ansaback and
CallScripter. The Revenues and Profit after taxation of each business sector are
summarised below:
Business segments Ansaback CallScripter Group
� � �
6 months to December 2007
Revenue 1,578,389 226,734 1,805,123
Profit after taxation 187,023 -49,004 138,019
---------- ---------- ----------
12 months to June 2007
Revenue 3,071,980 500,079 3,572,059
Profit after taxation 421,482 -6,564 414,918
---------- ---------- ----------
6 months to December 2006
Revenue 1,479,437 247,215 1,726,652
Profit after taxation 229,986 3,254 233,240
---------- ---------- ----------
6. Earnings per share
The calculation of the earnings per share is based on the profit after taxation
added to reserves divided by the weighted average number of ordinary shares in
issue during the relevant period. No diluted profit per share is shown because
all options are non-dilutive.
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2007 2006 2007
(unaudited) (unaudited) (unaudited)
Profit after taxation added to
reserves �138,019 �233,240 �414,918
Weighted average number of ordinary
shares in issue during the period 29,790,743 29,790,743 29,790,743
Basic and diluted earnings per
share 0.5p 0.8p 1.4p
7. Taxation
Due to the Group's profitable position, a deferred tax asset of �38,000 was
recognised at December 2006, �76,000 at June 2007 and �76,000 at December 2007.
This asset relates to losses brought forward which are expected to be recovered
against future profits.
8. Capital Reorganisation
During the year to 30th June 2007 the Company decided to reorganise its capital
and held an Extraordinary General Meeting to obtain shareholder approval.
Following subsequent court proceedings, the capital re-organisation became
effective on the 6th August 2007. The reorganisation cancelled the share premium
account and transferred the balance to the Profit and Loss Account.
Profit
And
Share Share Other Loss Total
Capital Premium Reserves Account Equity
� � � � �
Balance at 30th June
2007 297,908 6,045,563 18,396 -5,592,119 769,748
Profit for the period - - - 138,019 138,019
Capital reorganisation - -6,045,563 - 6,045,563 -
--------- ---------- --------- ---------- ---------
Balance at 31st December
2007 297,908 - 18,396 591,463 907,767
========= ========== ========= ========== =========
9. Availability of interim statement
Copies of this interim statement are being sent to the Company's shareholders
and will also be available from the Company's head office at Melford Court, The
Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ. A copy is also available to
download on the corporate page of the Group website at
www.countycontactcentres.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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