TIDMIBEX
RNS Number : 0076L
IBEX Global Solutions plc
28 September 2016
28 September 2016
IBEX Global Solutions Plc
("IBEX", "IBEX Global, "the Company" or "the Group")
Final Results for the Year Ended 30 June 2016
IBEX Global Solutions Plc (AIM: IBEX), a leading provider of
contact centre services and other business process outsourcing
(BPO) solutions, is pleased to announce its final results for the
year ended 30 June 2016.
Financial Highlights:
-- Total Group revenue up 7.0% to $255.5 million (2015: $238.8 million)
-- Adjusted gross profit (excluding depreciation and
amortisation) of $51.4 million (2015: $45.7 million)
-- Adjusted gross profit margin of 20.1% (2015: 19.1%)
-- Adjusted EBITDA* of $17.9 million (2015: $16.6 million)
-- Adjusted EBITDA* margin of 7.0% (2015: 6.9%)
-- Profit before tax of $7.1 million (2015: $7.2 million)
-- Net income of $6.5 million (2015: $6.4 million), equating to
fully diluted EPS of 16.37 cents per share (2015: 16.19 cents per
share)
-- Net assets of $27.6 million as of 30 June 2016 (30 June 2015: $25.5 million)
-- Net debt of $32.5 million as of 30 June 2016 (30 June 2015: $18.6 million)
-- Intention to declare final dividend of 6.6 cents per share,
representing a total dividend for the year of 11.7 cents per
share
Operational Highlights:
-- Improved and expanded Offshore and Nearshore operations, both
of which contribute higher margin
-- Investments made to improve facilities in Pakistan and transform Senegal operations
-- Continued to be awarded additional work by existing client base
-- Won a number of blue-chip new clients which will support growth and profit performance
-- Selling, general & administrative (SG&A) expenses
adjusted for depreciation at 13.1% of revenue, compares favourably
to industry standards of 15-28%
-- Number of employees as of 30 June 2016 in excess of 15,500,
up approximately 24% on prior period
*Adjusted for share-based payment, exceptional items and other
income
Muhammad Ziaullah Khan Chishti, Chairman of the Group,
commented:
"In his first full year as Chief Executive, Bob Dechant has made
great progress in not only improving the financial performance of
the Company but also in establishing a platform for future
continued success.
"IBEX has managed to diversify its geographical and industry
operations and enhance margin contribution, whilst also driving
revenue growth from both our existing client base and new client
wins. As such, I believe we are well placed to deliver better than
market revenue growth and achieve double-digit EBITDA margins."
For further information, please visit www.ibexglobal.com or
contact:
IBEX Global Solutions Plc Tel: +44 800 043
Robert Dechant, CEO 4239
Karl Gabel, CFO
Liberum Capital Limited Tel: +44 20 3100
Nominated Adviser and Joint Broker 2000
Steve Pearce
Richard Bootle
Joshua Hughes
Cenkos Securities PLC Tel: +44 20 7397
Joint Broker 8900
Liz Bowman
Camilla Hume
Alma PR Limited Tel: +44 7780
Public Relations Adviser 901 979
Josh Royston
Robyn McConnachie
CHAIRMAN'S STATEMENT
I am pleased to announce this set of strong results, which marks
the first full year under Bob Dechant's stewardship, and shows
excellent progress in all key metrics across the Group as we
continue to deliver efficiently against our growth strategy
announced in February 2016. Our financial performance reflects not
only very encouraging growth in volumes with existing clients, but
also, importantly, an expansion in our client base. This success
has been delivered through a combination of continued investment in
front line call centre agents and new facilities, as well as the
hard work and dedication of all our employees.
Financial Results
Revenues in the year to 30 June 2016 were $255.5 million,
representing strong improvement compared with the previous year
(2015: $238.8 million) and adjusted EBITDA (excluding share-based
payment, exceptional items and other income) was $17.9 million
(2015: $16.6 million), reflecting growth of 7.0% and 7.8%,
respectively. Profit before tax was $7.1 million (2015: $7.2
million).
Operationally, previous investment in the Group's infrastructure
continues to deliver improved efficiencies and capabilities which
allow us to provide, we believe, world-class services to our
growing client base. The Group performed well in each of its chosen
geographies with a strong improvement in our Offshore operations in
the Philippines. We also expanded our business into the Nearshore
regions of Nicaragua and Jamaica launched mid-year and then took
the strategic decision to invest further in our Jamaica facility,
following greater than expected client demand. Whilst this
investment resulted in an increase in capex and impacted negatively
on EBITDA, the investment should lead to increased revenues and
margins in fiscal year 2017 and beyond. A further pleasing trend,
now consistently represented across reporting periods, has been the
winning of new blue chip clients. We believe this highlights IBEX's
growing presence as the provider of choice amongst the most
successful class of global businesses.
Dividend
The Board hereby indicates its intent to pay a final dividend of
6.6 cents per share, representing a total dividend for the year of
11.7 cents per share. The final dividend will be declared ahead of
the Annual General Meeting, and expected to be paid before the end
of the calendar year, in line with previous periods.
IBEX is well-positioned to continue on its successful path and
deliver world-class services for clients, opportunity for employees
and growing shareholder value and returns. We look forward to the
future with confidence.
Muhammad Ziaullah Khan Chishti
Chairman's STRATEGIC REPORT
Business and Financial Review
IBEX delivered a strong performance, both operationally and
financially, during the fiscal year 2016. Operational improvements
and strategic investment not only helped us to achieve significant
increases in both revenues and profitability for the year under
review but have also placed us in a strong position for further,
continued growth in the years to come. The Group's organic growth,
consistently delivered over successive periods, has continued to
outperform industry averages and reflects the advantages of our
business model. As a Group we are focused on enhancing IBEX's
position as preferred BPO provider verses our larger competitors by
delivering superior services to our clients and maintaining high
levels of client satisfaction. We repay the confidence they show in
us by helping them to better service their own end customers. This
approach not only grows volumes with existing clients but also
provides the Group with a steady stream of new client wins.
Key Financial Performance Indicators (KPIs)
The principal KPIs used by the Board in measuring the
performance of the Group continue to be Revenue, Cost of Sales,
Selling, General & Administrative (SG&A) expenses, Adjusted
EBITDA, Net Income and Net Debt.
It is important to note that the comparative figures for 2015
included considerable one-off project revenues of $5.2 million.
Therefore, we have also included the comparative figures excluding
those revenues in the proforma column below to provide an
illustration of the ongoing, repeatable business of the period
against 2015.
Proforma*
30 June 30 June 30 June
2016 2015 2015
Continuing Operations $'000s $'000s $'000s
Revenue 255,510 238,806 233,590
Cost of Sales 213,225 200,027 200,027
Less depreciation and
amortisation (9,080) (6,946) (6,946)
204,145 193,081 193,081
Adjusted gross profit 51,365 45,725 40,509
Adjusted gross profit
margin 20.1% 19.1% 17.3%
SG&A 34,539 30,017 30,017
Less depreciation and
amortisation (1,103) (851) (851)
33,436 29,166 29,166
Adjusted EBITDA 17,929 16,559 11,343
Adjusted EBITDA margin 7.0% 6.9% 4.9%
Depreciation and amortisation,
exceptional items, finance
costs, share-based payment,
income tax and other income 11,443 10,146
Net income 6,486 6,413
Net income margin 2.5% 2.7%
* excluding $5.2 million one-off project revenue
relating to expansion of one of major clients
Borrowings 38,701 21,609
Cash and cash equivalents (6,245) (3,011)
Net debt 32,456 18,598
The Income Statement KPIs above are in line with the Board's
expectations.
Revenue for the year grew 7.0% to $255.5 million (2015: $238.8
million), or by 9.4% when excluding one-off items in the prior year
(2015: $233.6 million). Whilst the growth in revenues was driven
primarily by increasing business from our existing client base, of
which our top four clients grew at 5%, the overall percentage of
revenue contributed by them decreased slightly, a trend that we
will look to continue as we attract further clients across various
geographical and industrial verticals.
Adjusted EBITDA was 7.8% ahead of last year at $17.9 million
(2015: $16.6 million). The main reason for this is the delivery
against the Group's strategic objectives which has resulted in
improved operations, driving greater efficiencies and also in
concentrating on higher margin areas of growth. The Company sees
the expansion of its presence in both the Offshore and Nearshore
markets as a key part of its strategy to achieve double digit
Adjusted EBITDA margins and will look to build a greater proportion
of business in its Offshore and Nearshore markets.
As announced on 14 July 2016, Adjusted EBITDA was impacted by
two factors, the Group's strategic decision to build its own
facility in Jamaica in the fourth quarter to cater for excess
client demand, and separately a merger between two existing clients
which created higher than anticipated operating costs while we
converted to a new integrated delivery model in the US region in
the second half of the year. The Group expects to benefit from the
Jamaica investment from the current period onwards, whilst the
costs relating to the merger were a one-off event.
Profit before tax for the year slightly declined to $7.1
million; however on a proforma basis excluding one-off items,
increased 255% (2015: $7.2 million) with fully diluted earnings per
share slightly higher than the prior year at 16.37 cents (2015:
16.19 cents). Net debt (third party borrowings less cash and cash
equivalents of $6.2 million) at the end of the year increased to
$32.5 million (2015: $18.6 million), primarily through greater
utilisation of line of credit due to decelerated receivables
towards the close of financial year.
Operational Review
The Company has stated its target of achieving double digit
EBITDA margins while developing the Company into a more repeatable
and predictable business. I am pleased to report that we have made
solid progress on these fronts. Importantly, as well as delivering
improved financial performance for the year under review we believe
we have made strategic investments in the business which will
continue to provide further improvements to both the top and bottom
line in the years to come.
In particular, the Group has had great success in improving and
expanding its Offshore and Nearshore operations with over 1600
seats of new capacity, both of which contribute higher margin. Our
sales and client facing teams have had great success in selling
over 75% of this new capacity.
Nearshore operations were successfully established in the year
in both Jamaica and Nicaragua with two blue chip clients launching
in each of these territories with over 1100 seats of new capacity.
Our Jamaica operations were initially established in conjunction
with a partner. However, it soon became evident that the
opportunity in that geography was significant enough to warrant
further investment. As such, the Group took the strategic decision
to exit its partnership relationship with a local Jamaican operator
and build its own 720 seat facility which became operational on 1
July 2016. Whilst this had an impact on the year's EBITDA
performance as a result of paying higher fees to the partner for
the early exit and the associated costs for the buildout of our new
facility, we believe it will prove of great benefit over the coming
years. The facility provides IBEX with additional capacity to look
after additional client operations in the current period and beyond
with minimal additional capex required. Our Nicaragua business
operations, with 450 seats of capacity, extends our capabilities to
provide very good bilingual English and Spanish services (a key
offering to clients providing goods or services to the Hispanic
population) and has gone through successful launches whilst having
ample capacity for growth for FY17.
In total, revenues from the Offshore and Nearshore operations
totalled 39% of Group revenue compared with 28% in 2015. In order
to achieve our target of double digit EBITDA margins, the Group
will look to further increase the proportion of Group revenue that
comes from Offshore and Nearshore operations, both through
increasing the volume of work executed and clients in those
geographies but also through maximising the efficiency and output
of our US operations.
Our International business made good strides as well. In the
second half of the fiscal year, we began efforts in transforming
our Senegal operations to be a new, low cost alternative to support
the French market. We believe this market to be a viable
alternative to the Tunisia and Moroccan geographies with
competitive labour rates, great French speaking skills, and limited
competition. Investments were also made in improving and expanding
our facilities in Pakistan. These investments paid off quickly as
we were able to win significant business with a major mobile/telco
operator in Pakistan at the end of the period which we expect to
make a positive impact in the current period.
The Company also made great strides in improving important
operational KPI's across the Group. Our agent employee satisfaction
- the key driver for success - for FY16 measured at 92% companywide
with the Philippines leading the way at 96% satisfied. This
stronger focus on employee engagement in particular at our Offshore
operations in the Philippines helped to greatly improve our agent
retention rates, which naturally resulted in a much better
performance. We believe that during the course of this year we have
been able to build our Philippines operations into being
best-in-class and we are confident that we will continue to see a
strong performance in the coming years.
As the Group continues to grow and expand the vertical and
geographical markets which we serve, it is important that we
continue to invest into the business and get the right experience
and talent in place. I am therefore delighted that on 17 August
2016 Bruce Dawson was appointed as our Chief Sales and Client
Services Officer. Bruce joined us from Atento, one of the major
global players in our industry, where he was Director of Nearshore
and US. Bruce's experience will help us to build an industry best
sales engine and client management model whilst our ability to
attract somebody of his calibre also underlines our growing
standing in the market place. This key appointment will enable
Julie Casteel to focus on Strategic Client Relationships and
Marketing for the Company as we continue to define our unique
position in the market.
Analysis of our revenue growth by clients shows a pleasing mix
of additional work by our existing client base, which we believe
reflects their growing confidence in our abilities, as well as a
number of new clients, which will support our growth and
performance beyond the current reporting period and enable us to
become less dependent on our top few clients.
With regards our existing client base, revenue growth was
underpinned by:
-- A global telecommunications provider where we were able to
expand geographically into the Philippines and Nicaragua as well as
expand Line of Businesses (LOBs) support. The result was a near
threefold increase in volume and agents and was pursuant to a
series of acquisitions by our client.
-- A leading client in the television services and broadband
internet industry expanded its business sourced from IBEX by adding
a supplemental line of business serviced by the Group's US and
Philippines sites as well as launching in its new Jamaica site.
Of note within the new customer wins, contracts were signed with
four large companies, spanning the insurance, home solutions and
transportation services industries. Several of these new clients
have already expanded with us into new geographies. These wins
continue to highlight our value proposition of delivering great
performance for our clients across many different markets at
competitive price points. We remain committed to our investment in
new business development across a diversified set of verticals and
we will look to grow our base of new clients in the coming
quarters.
IBEX benefits from a lean, efficient operating overhead
structure. Our SG&A adjusted for depreciation is at 13.1% of
revenues, which is generally lower than the 15-28% expected from
our competitors. Consequently, IBEX has a strong operating leverage
associated with its business model. This, coupled with a focus on
the excellence of our operational execution, means that clients
entrust greater portions of their outsourcing spend to IBEX.
Our Marketplace and Outlook
The customer contact management industry is highly fragmented.
The size of the outsourced portion of the customer contact
management industry worldwide was estimated at approximately $64.0
billion in 2014, according to International Data Corporation
("IDC"), an industry research firm. IDC also estimates that the
outsourced portion of the customer contact industry is expected to
grow to approximately $81.0 billion by 2018, a compound annual
growth rate of 6.1% from 2014 to 2018. According to Ovum, an
industry research firm, it is estimated that no single outsourcer
has more than five percent of the total agent positions
worldwide.
The Board believes that IBEX provides the ideal alternative to
the largest providers in the industry with our extensive footprint,
robust offerings, exceptional service delivery model, complemented
with speed and flexibility. As a result over the last several
years, IBEX has consistently achieved greater than market growth
and we anticipate this year will provide further opportunities. Our
core clients continue to deliver growing volumes and additional
services to us and we remain confident that our sales and client
teams will deliver new client wins which will diversify our revenue
streams, in line with our strategy.
The improvement in our Philippine operations has been pleasing
and we are excited by the opportunities available at our Nearshore
operations. Additionally, our International operations should
benefit further in the current fiscal year from the launch with a
major mobile/telco client in Pakistan which took place in June
2016. The increased capex investment this year should benefit the
Group in the coming years as we fill the additional capacity it has
created. Whilst we would expect capex spend to be lower in the
current fiscal year, the Board will continue to take advantage of
strategic opportunities which present themselves, such as our
decision to build our own facility in Jamaica, to maximise the
benefit for all stakeholders in the coming years.
We have a positive trajectory as we move into the new fiscal
year. The success that we had in engineering a stronger business
and management team is positioning us for success in fiscal year
2017. Whilst our clients continue to refine their strategies and
their geographies within which they choose to operate, we believe
that the overall business is on a good footing to meet our client
requirements. We anticipate the majority of our growth to be driven
in our Offshore and Nearshore regions, and the investments we have
made to strengthen our sales team are seeing early positive
returns. In early August, we launched in the Philippines with a new
strategic client who is a leader in the Television and Media
services. Additionally, we are gearing up for a major launch in our
Jamaica centre with a Fortune 25 client in late September. Whilst
these are new relationships, it is reinforcement that our value
proposition is strong, our reputation is growing, and our future is
very bright.
The Board of IBEX recognises that changes to the macro-backdrop
can quickly affect the business. Whilst regulatory and legislative
issues, the 2016 U.S. Presidential election, and various new
minimum wage statutes at state and federal levels may impact on the
US economy, we are confident in our business and our team's ability
to successfully deal with any challenges we encounter and continue
to build upon our business.
Our goal is to continue to grow faster than the market whilst
improving our bottom line performance. We firmly believe we can
deliver on this. The Group has begun the new fiscal year well and
with our focus on people, product and execution, the Board looks
forward to the future with confidence.
We would like to thank our shareholders, clients, employees and
Board members for your confidence and support.
Robert Dechant
Chief Executive Officer
Consolidated Statement of Comprehensive Income
For the Year ended 30 June 2016
Notes 2016 2015
Continuing operations $'000's $'000's
----------- -----------
Revenue 4 255,510 238,806
Cost of sales (213,225) (200,027)
----------- -----------
Gross profit 42,285 38,779
----------- -----------
Selling, general and
administrative
Expenses (34,539) (30,017)
Share-based payment (90) 162
Exceptional item 6 - (1,375)
Other income 13 1,255 1,298
----------- -----------
Total selling, general
and administrative expenses (33,374) (29,932)
----------- -----------
Operating profit 8,911 8,847
Other expenses
5,
Finance costs 13 (1,767) (1,604)
----------- -----------
Income before taxation 7,144 7,243
Income tax expense (658) (830)
----------- -----------
Net income for the year
attributable to the equity
holders of the parent 6,486 6,413
----------- -----------
Other comprehensive income
Item that will not be
subsequently reclassified
to profit or loss -
Actuarial gain/(loss)
on retirement benefits 132 (225)
Item that will be subsequently
reclassified to profit
or loss -
Foreign currency translation
adjustment (45) (86)
----------- -----------
87 (311)
----------- -----------
Total comprehensive income
attributable to equity
holders of the
parent 6,573 6,102
=========== ===========
Earnings per share attributable
to equity holders of
the parent
Basic earnings per share
(in US$) 17 0.164 0.162
Diluted earnings per
share (in US$) 17 0.164 0.162
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated Statement of Financial Position
As at 30 June 2016 2016 2015
Assets Notes $'000's $'000's
----------------- ------------------------
Non-current assets
Goodwill 8,644 8,644
Other intangible
assets 7 4,295 5,385
Property and equipment 8 22,017 16,627
Deferred tax asset
- net 1,584 1,040
Other non-current
assets 9 4,498 4,534
----------------- ------------------------
Total non-current
assets 41,038 36,230
----------------- ------------------------
Current assets
Trade and other
receivables 10 53,177 32,289
Deferred expenses 4,657 3,348
Due from affiliates 1,210 4,167
Cash and cash equivalents 11 6,245 3,011
Total current assets 65,289 42,815
----------------- ------------------------
Total assets 106,327 79,045
================= ========================
Equity and liabilities
Equity attributable
to owners of the
parent
Share capital 602 602
Share premium 14,479 14,479
Capital redemption
reserve 48,530 48,530
Treasury shares (58) (19)
Other reserves 1,230 918
Deficit (37,207) (38,986)
----------------- ------------------------
Total equity 27,576 25,524
----------------- ------------------------
Non-current liabilities
Deferred revenue 1,376 1,196
Obligation under
finance lease 12 6,090 7,159
Long-term financing 13 2,115 4,251
Term loan 15 4,000 -
Other 14 1,095 1,304
----------------- ------------------------
Total non-current
liabilities 14,676 13,910
----------------- ------------------------
Current liabilities
Line of credit 15 17,025 3,273
Obligation under
finance lease 12 3,579 3,730
Current portion
of financing 13 3,892 3,196
Term loan 15 2,000 -
Trade and other
payables 16 30,752 25,301
Deferred revenue 6,622 4,066
Due to affiliates 205 45
Total current liabilities 64,075 39,611
----------------- ------------------------
Total liabilities 78,751 53,521
Total equity and
liabilities 106,327 79,045
================= ========================
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Other
reserves
------------------------------- ------------
Share Share Capital Employee Foreign Actuarial Deficit Total
capital premium redemption share currency gain equity
reserve option translation
plan reserve
Treasury on
shares retirement
benefits
$'000's $'000's $'000's $'000's $'000's $'000's $'000's $'000's $'000's
As at 1 July
2014 602 14,479 48,530 - 1,144 (535) 307 (41,647) 22,880
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Net income - - - - - - - 6,413 6,413
Other
comprehensive
loss - - - - - (86) (225) - (311)
Total
comprehensive
income for
the
year - - - - - (86) (225) 6,413 6,102
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Transactions
with owners
Dividend
distribution - - - - - - - (3,752) (3,752)
Purchase of
treasury
shares - - - (19) - - - - (19)
Employee
share-based
payment - - - - 313 - - - 313
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Total
transactions
with owners - - - (19) 313 - - (3,752) (3,458)
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
As at 30 June
2015 602 14,479 48,530 (19) 1,457 (621) 82 (38,986) 25,524
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Net income - - - - - - - 6,486 6,486
Other
comprehensive
income - - - - - (45) 132 - 87
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Total
comprehensive
income for
the
year - - - - - (45) 132 6,486 6,573
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Transactions
with owners
Dividend
distribution - - - - - - - (4,707) (4,707)
Purchase of
treasury
shares - - - (39) - - - - (39)
Employee
share-based
payment - - - - 225 - - - 225
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
Total
transactions
with owners - - - (39) 225 - - (4,707) (4,521)
-------- -------- ----------- ------------ ----------------- ------------ ----------- --------- ---------
As at 30 June
2016 602 14,479 48,530 (58) 1,682 (666) 214 (37,207) 27,576
======== ======== =========== ============ ================= ============ =========== ========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
Consolidated Statement of Cash Flows
For the year ended 30 June 2016
Notes 2016 2015
$'000's $'000's
-------- ---------
Cash flows from
operating activities
Net cash generated
from operating activities 18 7,878 27,249
Interest paid (1,767) (2,192)
Taxes paid (1,009) (105)
Net cash from operating
activities 5,102 24,952
-------- ---------
Cash flows from investing
activities
Purchases of property and
equipment (9,506) (1,729)
Additions to intangible
assets (594) -
Proceeds from sale of assets 176 10
Net cash used in investing
activities (9,924) (1,719)
Cash flows from financing
activities
Proceeds from line of credit 13,752 -
Repayments on line of credit - (13,430)
Grants received 200 311
Payments of dividend (4,707) (3,752)
Purchase of treasury shares (39) (19)
Proceeds from term loan
15 6,000 -
Payments on financing (3,304) (2,332)
Payment of loan to affiliate - (1,355)
Payments on capital lease
obligations (3,977) (3,497)
-------- ---------
Net cash from / (used in)
financing activities 7,925 (24,074)
-------- ---------
Effect of exchange rate
change on cash and cash
equivalents 131 (153)
-------- ---------
Net increase / (decrease)
in cash and cash equivalents 3,234 (994)
Cash and cash equivalents,
beginning of year 3,011 4,005
-------- ---------
Cash and cash equivalents,
end of year 11 6,245 3,011
======== =========
The accompanying notes are an integral part of these
consolidated financial statements.
(1) Nature of the business
IBEX Global Solutions Plc (the Holding Company or the Parent
Company) was incorporated on 26 March 2013 as IBEX Global Solutions
Limited and was re-registered as a public limited company on 4 June
2013. Its registered office is 3rd Floor, 5 Lloyds Avenue, London
EC3N 3AE. The Holding Company was incorporated under the Companies
Act 2006 with a fiscal year end of 30 June. On 28 June 2013, the
Holding Company was admitted to trade on the Alternative Investment
Market (AIM), a market operated by the London Stock Exchange Group
Plc.
IBEX Global Solutions Plc and subsidiaries (IBEX, IBEX Global,
IBEX Group or the Group) is a global portfolio of companies in the
contact centre and related business process outsourcing (BPO)
business, with operations in the United States, Philippines, the
United Kingdom, Pakistan, Senegal, Jamaica and Nicaragua. Service
offerings include customer care support, business and consumer
inbound and outbound telesales and technical support services. IBEX
Group also offers enabling technology solutions including
Interactive Voice Response (IVR).
The IBEX Group consists of:
Holding company Location
IBEX Global Solutions UK
Plc
30 June
2016
Percentage
of holding
in ordinary Statutory
shares Reporting
Subsidiaries Location % Year
Lovercius Consultants Cyprus 100% June 2016
Limited (IBEX Cyprus)
IBEX Global Europe S.a.r.l. Luxembourg 100% June 2016
(IBEX Luxembourg)
TRG Customer Solutions, USA 100% June 2016
Inc. (trading as IBEX
Global Solutions, Inc.)
TRG Customer Solutions Canada 100% June 2016
(Canada) Inc.
TRG Marketing Solutions UK 100% June 2016
Limited
Virtual World (Private) Pakistan 100% June 2016
Limited
IBEX Philippines Inc. Philippines 100% June 2016
IBEX Global Solutions Philippines 100% June 2016
(Philippines) Inc.
TRGCS Philippines Inc. Philippines 100% June 2016
IBEX Global Solutions Senegal 100% December
Senegal S.A. (IBEX Senegal) 2015
IBEX Global Solutions Pakistan 100% June 2016
(Private) Limited
IBEX Global Mena FZE Dubai 100% June 2016
IBEX I.P. Holdings Ireland Ireland 100% June 2016
Limited (IBEX Ireland)
IBEX Global Bermuda Limited Bermuda 100% June 2016
IBEX Global Solutions Nicaragua 100% June 2016
Nicaragua SA (IBEX Nicaragua)
IBEX Global St. Lucia St. Lucia 100% June 2016
Limited
IBEX Global Jamaica Limited Jamaica 100% June 2016
(IBEX Jamaica)
(2) Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS),
including International Accounting Standards (IAS), and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations as adopted by the European Union (IFRS as adopted
by the EU) and the Companies Act 2006 applicable to companies
reporting under IFRS.
The consolidated financial statements have been prepared under
the going concern assumption.
The financial information, which comprises the consolidated
statement of comprehensive income, consolidated statement of
financial position, consolidated statement of changes in equity,
consolidated statement of cash flows and related notes, does not
constitute full accounts within the meaning of s435 (1) and (2) of
the Companies Act 2006. The auditors have reported on the Group
statutory accounts for each of the years ended 30 June 2015 and 30
June 2016 which do not contain any statement under s498 of the
Companies Act 2006 and are unqualified. The statutory accounts for
the year ended 30 June 2015 have been delivered to the Registrar of
Companies and the statutory accounts for the year ended 30 June
2016 will be filed with the Registrar of Companies in due
course.
(3) Ultimate parent undertaking and controlling entity
The Ultimate Parent Company, The Resource Group International
Limited (TRGI), is incorporated in Bermuda. The parent entity of
the largest group to include the IBEX Group in its consolidated
financial statements is TRGI, and its financial statements are not
publicly available. The ultimate controlling party of the Group are
the Directors of TRGI.
(4) Operating segments
These consolidated financial statements have been prepared on
the basis of a single operating segment. Whilst the Group operates
in different locations, there are no multiple products or lines of
services upon which the results reported to the Chief Operating
Decision Maker are segregated and analysed.
94.6% and 93.6% of the total revenue was earned from customers
in the United States of America for the years ended 30 June 2016
and 2015, respectively.
The following table summarises those non-related party customers
with revenue or accounts receivable in excess of 5.0% total revenue
or total receivables for the years ended 30 June 2016 and 2015. The
revenue analysis below does not form part of the Group's segmental
reporting but is provided voluntarily.
30 June 2016
------------------------------------------------------
Revenue Accounts receivable
Percentage
Percentage of
Amount of total Amount Total
$'000's % $'000's %
Client 1* 98,695 39 15,847 34
Client 2 50,693 20 14,083 30
Client 3 47,786 19 5,804 12
197,174 78 35,734 76
Others 58,336 22 11,134 24
255,510 100 46,868 100
========== =============== ========= ==============
30 June 2015
------------------------------------------------------
Revenue Accounts receivable
Percentage
Percentage of
Amount of total Amount Total
$'000's % $'000's %
Client 1* 73,793 31 5,788 21
Client 2 29,490 12 2,173 8
Client 3 55,937 23 7,422 27
Client 4* 28,270 12 2,551 9
187,490 78 17,934 65
Others 51,316 22 10,047 35
238,806 100 27,981 100
========== =============== ========= ==============
* In July 2015, two of the Group's major clients merged.
The above clients are primarily Fortune 100 and/or Fortune 500
companies.
Revenues are attributed to geographic areas based upon the
location in which the sale originated. The Holding Company is
domiciled in the United Kingdom.
Non-current assets located outside of the United Kingdom
comprises the majority of assets of TRG Customer Solutions Inc.,
IBEX Philippines Inc. and IBEX Global Solutions (Philippines) Inc.
The non-current assets outside of the UK as at 30 June 2016 and
2015 are as follows:
30 June
30 June 2016 2015
Location $'000's $'000's
TRG Customer Solutions,
Inc. USA 21,284 23,374
IBEX Philippines Inc. Philippines 1,405 2,114
IBEX Global Solutions (Philippines)
Inc. Philippines 11,525 8,694
Others Various 6,518 1,742
40,732 35,924
============ =======
(5) Finance costs
30 June 30 June
2016 2015
$'000's $'000's
Interest on bank borrowings 575 842
Interest on invoice discounting 131 15
Finance charges on finance lease and financing arrangements 1,038 732
Bank charges 23 15
1,767 1,604
======= =======
(6) Exceptional items
30 June 30 June
2016 2015
$'000's $'000's
Severance and bonus - 1,375
- 1,375
======= =======
Stephen M. Kezirian resigned as CEO and left his post as
Executive Director effective 7 October 2014, and by agreement
provided transition assistance through to 31 December 2014. The
financial terms of the aforementioned agreement have been reflected
in the disclosure above.
(7) Other intangible assets
Patents Trademarks Software Total
$'000's $'000's $'000's $'000's
Cost
At 1 July 2015 196 371 9,517 10,084
Additions - - 1,202 1,202
Foreign currency
differences - - (2) (2)
At 30 June 2016 196 371 10,717 11,284
------- ---------- -------- -------
Accumulated amortisation
At 1 July 2015 196 - 4,503 4,699
Amortisation charge
for the year - - 2,290 2,290
At 30 June 2016 196 - 6,793 6,989
------- ---------- -------- -------
Net book value
At 30 June 2016 - 371 3,924 4,295
======= ========== ======== =======
At 30 June 2015 - 371 5,014 5,385
======= ========== ======== =======
Patents Trademarks Software Total
$'000's $'000's $'000's $'000's
Cost
At 1 July 2014 196 371 6,380 6,947
Additions - - 3,139 3,139
Foreign currency
differences - - (2) (2)
At 30 June 2015 196 371 9,517 10,084
------- ---------- -------- -------
Accumulated amortisation
At 1 July 2014 196 - 2,655 2,851
Amortisation charge
for the year - - 1,848 1,848
At 30 June 2015 196 - 4,503 4,699
------- ---------- -------- -------
Patents Trademarks Software Total
$'000's $'000's $'000's $'000's
Net book value
At 30 June 2015 - 371 5,014 5,385
======= ========== ======== =======
At 30 June 2014 - 371 3,725 4,096
======= ========== ======== =======
Allocation of amortisation charge in the consolidated statement
of comprehensive income is as follows:
30 June 30 June
2016 2015
$'000's $'000's
Cost of sales 2,280 1,839
Selling, general and administrative expenses 10 9
2,290 1,848
======= =======
Details of intangible assets held under financing arrangements
are as follows:
Software Total
$'000's $'000's
At 30 June 2016
Cost 4,028 4,028
Accumulated depreciation (2,300) (2,300)
Net book value 1,728 1,728
======== ========
At 30 June 2015
Cost 3,331 3,331
Accumulated depreciation (1,111) (1,111)
Net book value 2,220 2,220
======== ========
In June 2014, one of the subsidiaries of the Parent Company
entered into a financing arrangement with IBM Credit LLC to finance
the purchase of software licenses from Microsoft Corporation (see
Note 13).
(8) Property and equipment
Furniture,
fixture
and Telecommunication
Leasehold office and computer Construction
Improvements equipment equipment Vehicles in progress Total
$'000's $'000's $'000's $'000's $'000's $'000's
Cost
At 1 July
2015 8,703 10,296 24,492 276 - 43,767
Additions 2,686 5,140 5,315 - 720 13,861
Disposals - (111) (66) - - (177)
Foreign
currency
differences (102) (182) (114) (3) - (401)
------------- ---------- ----------------- -------- ------------ -------
At 30 June
2016 11,287 15,143 29,627 273 720 57,050
------------- ---------- ----------------- -------- ------------ -------
Accumulated
Depreciation
At 1 July
2015 5,357 3,871 17,706 206 - 27,140
Charge
for the
year 1,305 2,243 4,326 19 - 7,893
------------- ---------- ----------------- -------- ------------ -------
At 30 June
2016 6,662 6,114 22,032 225 - 35,033
------------- ---------- ----------------- -------- ------------ -------
Furniture,
fixture
and Telecommunication
Leasehold office and computer Construction
Improvements equipment equipment Vehicles in progress Total
$'000's $'000's $'000's $'000's $'000's $'000's
Net book
value
At 30 June
2016 4,625 9,029 7,595 48 720 22,017
============= ========== ================= ======== ============ =======
At 30 June
2015 3,346 6,425 6,786 70 - 16,627
============= ========== ================= ======== ============ =======
Furniture,
fixture
and Telecommunication
Leasehold office and computer
Improvements equipment equipment Vehicles Total
$'000's $'000's $'000's $'000's $'000's
Cost
At 1 July
2014 7,234 8,017 19,944 268 35,463
Additions 1,591 2,477 4,634 21 8,723
Disposals - - (3) (8) (11)
Foreign currency
differences (122) (198) (83) (5) (408)
------------- ---------- ----------------- -------- -------
At 30 June
2015 8,703 10,296 24,492 276 43,767
------------- ---------- ----------------- -------- -------
Accumulated
depreciation
At 1 July
2014 4,146 2,489 14,370 186 21,191
Charge for
the year 1,211 1,382 3,336 20 5,949
------------- ---------- ----------------- -------- -------
At 30 June
2015 5,357 3,871 17,706 206 27,140
------------- ---------- ----------------- -------- -------
Net book
value
At 30 June
2015 3,346 6,425 6,786 70 16,627
============= ========== ================= ======== =======
At 30 June
2014 3,088 5,528 5,574 82 14,272
============= ========== ================= ======== =======
Details of property and equipment held under finance lease and
financing arrangements are as follows:
Furniture, Telecommunication
Leasehold fixture and and computer
Improvements office equipment equipment Vehicles Total
$'000's $'000's $'000's $'000's $'000's
At 30 June
2016
Cost 4,430 9,393 7,430 57 21,310
Accumulated
depreciation (2,468) (2,812) (4,114) (30) (9,424)
Net book
value 1,962 6,581 3,316 27 11,886
============= ================= ================= ======== ========
At 30 June
2015
Cost 3,787 11,295 1,131 59 16,272
Accumulated
depreciation (1,718) (3,615) (444) (19) (5,796)
Net book
value 2,069 7,680 687 40 10,476
============= ================= ================= ======== ========
(9) Other non-current assets
Other non-current assets consist of the following:
30 June 30 June
2016 2015
$'000's $'000's
Long-term deposits 2,346 1,218
Long-term deferred expenses 938 1,014
Long-term prepayment 1,161 1,369
Other 53 933
4,498 4,534
======= =======
On 31 March 2013, the Holding Company entered into a contract of
Standard Terms and Conditions with SatMap Inc. (SatMap),
subsequently amended on 31 March 2013 and April 2013 (the contract
and the two amendments collectively, Agreement). Under the
Agreement, the Holding Company (a) issued additional share capital
of $1.0 million to TRGI, direct parent of the Holding Company and
the indirect parent of SatMap; and (b) issued a note in the amount
of $1.0 million payable to SatMap. In exchange, the Holding Company
received an asset of $2.0 million in dedicated data services (up to
2000 call-centre seats) from SatMap to be amortised over 120
months. The asset represents an advance payment for the proprietary
artificial intelligence and pattern recognition technology invented
and developed by SatMap (SatMap Services). The SatMap Services
integrate with call-centre telephony and agent staffing to connect
in real time customers with agents most likely to produce improved
performance and service in call outcomes for such customers. As of
14 October 2013, the Holding Company (with the consent of SatMap)
assigned all of its rights and obligations under the Agreement and
the note to TRG Customer Solutions, Inc. d/b/a IBEX Global
Solutions, Inc. (IBEX US), which assumed all such rights and
obligations. The assignment and assumption of the Agreement and the
note enables IBEX US to use the SatMap Services in its call
centres. IBEX US deploys the SatMap Services in its call centres to
enhance performance and as a value-added differentiator for its
clients, producing more revenue for both the clients and IBEX US.
The total value (net of amortisation) of this asset as of 30 June
2016 is $1.4 million, of which $1.2 million is classified as a
non-current asset (long-term prepayment), and $0.2 million is
classified as a current asset. The total value (net of
amortisation) of this asset as of 30 June 2015 is $1.6 million, of
which $1.4 million is classified as a non-current asset (long-term
prepayment), and $0.2 million is classified as a current asset.
(10) Trade and other receivables
Trade and other receivables, which are stated at fair value,
consist of the following:
30 June 30 June
2016 2015
$'000's $'000's
Trade receivables - gross 47,452 28,507
Less provision for doubtful
debts (584) (526)
-------- ----------
Trade receivables - net 46,868 27,981
Prepayments and other receivables 5,555 3,929
Deposits 754 379
53,177 32,289
======== ==========
Provision for doubtful debts
30 June 30 June
2016 2015
$'000's $'000's
Balance as of 1 July 526 374
Charge for the year 241 184
Foreign exchange differences (15) (23)
Reversals/write offs against
provision (168) (9)
Balance as of 30 June 584 526
======= =======
(11) Cash and cash equivalents
Cash and cash equivalents consist of the following:
30 June 30 June
2016 2015
$'000's $'000's
Balances with banks in:
- current accounts 5,235 2,470
- deposit accounts 758 530
------- -------
5,993 3,000
Cash on hand 252 11
6,245 3,011
======= =======
(12) Liabilities against assets subject to finance lease
Liabilities against assets subject to finance lease are secured
by the related assets held under finance leases. Future minimum
lease payments at 30 June 2016 and 2015 are as follows:
30 June 2016 30 June 2015
Minimum Present Minimum Present
lease value lease value
payments of payments payments of payments
$'000's $'000's $'000's $'000's
Within one year 4,169 3,579 4,358 3,730
After one year but not
more than five years 6,598 6,090 8,079 7,159
--------- ------------ --------- ------------
Total minimum lease payments 10,767 9,669 12,437 10,889
Less amounts representing
finance charges (1,098) - (1,548) -
--------- ------------ --------- ------------
Present value of minimum
lease payments 9,669 9,669 10,889 10,889
Less current portion shown
under current liabilities (3,579) (3,579) (3,730) (3,730)
Obligation under finance
lease - non-current 6,090 6,090 7,159 7,159
========= ============ ========= ============
These lease arrangements have interest rates ranging from 6.0%
to 8.0% and 5.0% to 10.0% for the years ended 30 June 2016 and 30
June 2015, respectively. At the end of the lease term, the
ownership of the assets shall be transferred to the respective
entities of the Group.
(13) Financing arrangements
In June 2014, the US subsidiary of the Holding Company (TRG
Customer Solutions, Inc., TRG CS or IBEX US) entered into a $3.3
million three-year financing agreement (IBM Agreement) with IBM
Credit LLC (IBM) to finance the purchase of software licenses
(under a Select Agreement) from Microsoft Corporation (Microsoft).
In June 2014, IBEX US also entered into a three-year Enterprise
Agreement with Microsoft for the use of certain cloud software
services for approximately $1.1 million in year one, with minimum
service commitments of approximately $50,000 in each of years two
and three. The monthly financing payments under the IBM Agreement
are approximately $103,000 per month for 36 months which began in
July 2014. The monthly payments under the Microsoft Enterprise
Agreement during year one were approximately $100,000 per month
which began in July 2014, with minimum monthly service commitments
of approximately $4,000 in each of years two and three.
IBEX US acquired the Microsoft software licenses and cloud
services to accommodate the needs of the IBEX Group and to
facilitate the acquisition by the Holding Company's parent, TRGI,
of software for TRGI and its non-IBEX subsidiaries. Consequently,
TRGI, the Holding Company and IBEX US have entered into an
agreement as of July 2014 under which the Holding Company has
sub-licensed to TRGI the use, for a fixed monthly consideration
(that includes a management fee / mark-up), of that portion of the
software and services purchased that correspond to the requirements
of TRGI and its non-IBEX subsidiaries. The management fee of $1.4
million and $2.7 million for the years ended 30 June 2016 and 2015,
respectively, was shown as Other Income (2016: $1.2 million, 2015:
$1.3 million) and set-off against Cost of Sales (2016: $52
thousand, 2015: $1.2 million) and Finance Costs (2016: $0.1
million, 2015: $0.2 million) in the consolidated statement of
comprehensive income.
In addition, IBEX US has financed the purchase of various
property and equipment and software during the fiscal year 2016 and
2015 with CIT Finance LLC (CIT) and IBM. As of 30 June 2016 and
2015, IBEX US has financed $12.2 million and $9.8 million,
respectively, of assets with CIT and IBM at the interest rates
ranging from 6.0% to 8.0% per annum for the years ended 30 June
2016 and 2015. Also in the fiscal year 2016, IBEX US availed of a
non-revolving line of credit from PNC to finance capital
expenditures (Note 15).
As of 30 June 2016 and 2015, the outstanding liabilities from
these transactions are shown in the consolidated statement of
financial position as follows:
30 June 2016
Current Non-current
$'000's $'000's
IBM Credit LLC 2,607 890
CIT Finance LLC 661 90
PNC 624 1,135
3,892 2,115
========= =============
30 June 2015
Current Non-current
$'000's $'000's
IBM Credit LLC 2,514 3,501
CIT Finance LLC 682 750
3,196 4,251
========= =============
Future minimum lease payments to IBM and CIT at 30 June 2016 and
2015 are as follows:
30 June 2016 30 June 2015
Minimum Present Minimum Present
lease value lease value
payments of payments payments of payments
$'000's $'000's $'000's $'000's
Within one year 4,155 3,892 3,626 3,196
After one year but not
more than five years 2,189 2,115 4,404 4,251
--------- ------------ --------- ------------
Total minimum lease payments 6,344 6,007 8,030 7,447
Less amounts representing
finance charges (337) - (583) -
--------- ------------ --------- ------------
Present value of minimum
lease payments 6,007 6,007 7,447 7,447
Less current portion shown
under current liabilities (3,892) (3,892) (3,196) (3,196)
Obligation under finance
lease - non-current 2,115 2,115 4,251 4,251
========= ============ ========= ============
(14) Other non-current liabilities
30 June 30 June
2016 2015
$'000's $'000's
Deferred rent - long-term 428 649
Pensions - defined benefit plan 633 494
Phantom stock plan 26 161
Other 8 -
1,095 1,304
======= =======
(15) Working capital line of credit
On 8 November 2013, a subsidiary of IBEX (the Subsidiary) signed
a Revolving Credit and Security Agreement with PNC for a new $35.0
million Revolving Line Of Credit (RLOC) to replace the Capital
Source Bank $20.0 million RLOC. The said agreement will mature on 7
November 2016 and promises an interest rate of LIBOR +2.50% and or
the PNC Commercial Lending Rate (as publically announced) +0.25%.
During the course of the fiscal year 2014, the Subsidiary entered
into a waiver and an amendment (Amendment 1) whereby PNC waived the
Borrowers technical non-compliance with a certain covenant cap. On
2 October 2014, the Subsidiary entered into an amendment (Amendment
2) whereby PNC increased the caps associated with certain
covenants, increased indebtedness, and waived past technical
covenant non-compliance events.
In this agreement, the Subsidiary derived value from the choice
of interest rates, depending on the rate selected. This value
changes in response to the changes in the various interest rates
alternatives. Thus, a derivative is embedded within the loan
commitment, i.e. the facility terms which are agreed for a fixed
period until 2016. The part of the value associated with the loan
commitment derivative (the embedded derivative part) is derived
from the potential interest rate differential between the
alternative rates, i.e. it creates economic characteristics that
are different to a typical loan commitment.
The Subsidiary assessed that the derivative is considered to be
closely related and is not separated as part of the loan commitment
due to the following factors: (1) the instrument can be settled in
a way that PNC would recover substantially all of its investment
(the borrowed principal) since the derivative only impacts the
choice in interest rate; and (2) PNC will not generate a rate of
return that is at least twice that of the market return because no
matter which rate is selected, each interest rate alternative
available to the Subsidiary (each of the PNC, FFOR and 2 LIBOR
rates) represents a market rate of interest and would be impacted
in the same way by market factors.
During the course of the fiscal year 2015 the Subsidiary entered
into an amendment (Amendment 3) whereby PNC increased caps
associated with certain covenants. On 19 June 2015 the Subsidiary
entered into an amendment (Amendment 4) whereby PNC consented to
permit the Subsidiary to sell specific receivables to Citibank,
N.A. On 26 June 2015, the Subsidiary entered into an amendment
(Amendment 5) whereby PNC increased the RLOC to $40.0 million, with
a potential increase of up to a total of $50.0 million (subject to
PNC approval and conditions), included a $10.0 million
non-revolving line of credit to finance capital expenditures,
reduced the interest rate to LIBOR +1.75% and/or the PNC Commercial
Lending Rate for domestic loans, extended the maturity date to May
2020, and included certain standard financial covenants.
On 30 June 2016 the Subsidiary entered into an amendment
(Amendment 6) whereby PNC extended a $6.0 million Term Loan A which
will be amortised in 36 consecutive equal monthly instalments. PNC
would also extend a $4.0 million Term Loan B to be also amortised
in 36 consecutive equal monthly instalments and would be drawn down
subject to certain conditions. The maximum amount of Equipment Loan
shall now be $3.0 million.
On 22 July 2016 the Subsidiary entered into an amendment
(Incremental Amendment 6) with PNC RSCA to further define the
clauses in Amendment 6 without changing the main terms. Under
Amendment 6 as well as Incremental Amendment 6 the Subsidiary is
required to enter into a Lender-Provided Interest Rate Hedge in an
amount not less than fifty percent (50%) of Term Loan A and Term
Loan B within a specified period from their respective funding. The
Subsidiary has therefore entered into a Lender-Provided Interest
Rate Hedge on 15 August 2016 in relation to Term Loan A.
(16) Trade and other payables
30 June 30 June
2016 2015
$'000's $'000's
Trade payables 6,212 2,820
Accrued expenses and payables 7,704 5,719
Accrued salaries and wages 16,836 16,762
30,752 25,301
======= =======
(17) Earnings per share
(a) Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Holding Company by the
weighted average number of ordinary shares in issue during the
year.
30 June 30 June
2016 2015
Profit attributable to equity
holders of the Holding Company
(in US$'000's) 6,486 6,413
Weighted average number
of ordinary shares in issue 39,523,391 39,549,407
Basic earnings per share
(in US$) 0.164 0.162
========== ===========
(b) Diluted
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares that could be
issued from options outstanding for less than the average market
price. As of 30 June 2016 and 2015, the reconciliation of the
weighted average number of shares for the purposes of diluted
earnings per share to the weighted average number of ordinary
shares used in the calculation of basic earnings per share is as
follows:
30 June 30 June
2016 2015
Weighted average number
of ordinary shares (basic) 39,523,391 39,549,407
Shares deemed to be issued
for less than average market
price 96,332 70,841
Weighted average number
of ordinary shares (diluted) 39,619,723 39,620,248
========== ===========
30 June 30 June
2016 2015
Profit attributable to equity
holders of the Holding Company
(in US$'000's) 6,486 6,413
Weighted average number
of ordinary shares (diluted) 39,619,723 39,620,248
Diluted earnings per share
(in US$) 0.164 0.162
========== ===========
(18) Cash generated from operations
30 June 30 June
2016 2015
$'000's $'000's
Profit before taxation 7,144 7,243
Adjustments for:
Depreciation and amortisation 10,183 7,797
Finance cost 1,767 1,604
Provision for retirement
benefits 263 107
Gain on sale of fixed assets (1) (1)
Share-based payment 90 (162)
Increase / decrease in operating
assets and liabilities:
Decrease / (increase) in
trade and other receivables (21,810) 6,503
Increase in trade and other
payables 4,684 3,485
Increase in net deferred
revenue 2,441 1,552
Decrease / (increase) in
net due from affiliates 3,117 (879)
Net cash generated from
operating activities 7,878 27,249
======== =======
(19) Capital risk management
The Board's objective is to maintain a capital structure that
supports the Group's strategic objectives and shareholders' value.
The Group's capital consists of cash and cash equivalents, debt
balances (working capital line of credit, long-term and short-term
lease liabilities, and term loan) and equity attributable to equity
holders.
The following table summarises the Capital of the Group:
30 June 30 June
2016 2015
$'000's $'000's
Borrowings 38,701 21,609
Cash and cash equivalents (6,245) (3,011)
Net Debt (Note 21) 32,456 18,598
Equity 27,576 25,524
Total Capital of the Group 60,032 44,122
======= =======
The Group leverages the Working Capital Revolving Line of Credit
to fund its working capital cycle as necessary. These borrowings,
together with cash generated through operations, may be loaned
internally or contributed as equity to certain subsidiaries.
(20) Contingencies
The Group and its subsidiaries are subject to claims and
lawsuits filed in the ordinary course of business. Management does
not anticipate that the outcome of any of the proceedings will have
a material adverse effect on the Group's business results,
operations, liquidity, or financial condition. Although management
does not believe that any such proceedings will have material
adverse effect, no assurances to that effect can be given based on
the uncertainty of litigation and demands of third parties.
(21) Net debt
30 June 30 June
2016 2015
$'000s $'000s
Borrowings 38,701 21,609
Cash and cash equivalents (6,245) (3,011)
Net debt 32,456 18,598
Changes in net debt during
the fiscal years Net (increase)
/ decrease in cash and cash
equivalents (3,234) 994
Changes in net debt as a result
of cash flows:
Proceeds from / (repayment
on) line of credit 13,752 (13,430)
Proceeds from term loan 6,000 -
Repayment on financing (3,304) (2,332)
Payments on capital lease
obligations (3,977) (3,497)
Assets financed/leased 4,964 10,133
Foreign currency exchange
difference (343) (176)
Increase / (decrease) in net
debt during the year 13,858 (8,308)
Net debt, beginning of year 18,598 26,906
Net debt, end of year 32,456 18,598
(22) Subsequent events
The management evaluated subsequent events and transactions that
occurred from the end of the reporting period through 27 September
2016, the date at which the consolidated financial statements were
available to be issued, and concluded that no subsequent events
require adjustment to or disclosure in these consolidated financial
statements except for as presented in Note 15.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEDFAWFMSESU
(END) Dow Jones Newswires
September 28, 2016 02:01 ET (06:01 GMT)
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