RNS Number:2000J
SSP Holdings PLC
05 December 2007
5 December 2007
SSP Holdings plc
Interim results for the six months ended 30 September 2007
SSP Holdings plc ("SSP" or the "Group"), a market-leading provider of business
critical IT systems and services to the global insurance and financial services
industries, announces interim results for the six months ended 30 September
2007.
Highlights
* Strong financial performance
- Revenues increased by 47% to #26.4m (H1 2006: #17.9m); organic growth of 12%
- Annualised revenue run-rate of c.#69m(1)
- Adjusted EBITA(2) increased by 54% to #5.4m (H1 2006: #3.5m)
- High visibility revenues (as described in the Chairman's Statement) up 35% to
#19.7m (H1 2006: #14.6m), representing 75% of total revenues (H1 2006: 81%)
- Net cash from operating activities #3.0m (H1 2006: #3.2m)
- Adjusted earnings per share(3) 5.8p (H1 2006: as restated 5.7p)
- Profit before tax increased to #2.7m (H1 2006: #1.8m)
* Sirius integration ahead of plan with annualised synergy savings of
approximately #2 million achieved; further synergies expected in the next
financial year
* Strong growth across all four divisions
* Net debt at #38.4m, being #0.8m ahead of plan
David Rasche, Chairman, commented:
"We are pleased to have maintained strong levels of organic growth in a period
when we have also made very good progress in integrating the Sirius business,
creating one of the largest specialist providers of general insurance software
in the world.
With strong performance in our four operating divisions and increased activity
in all our markets, the Board has confidence that we will meet our expectations
for the full year."
- ends -
Enquiries:
SSP Holdings plc 01422 330022
David Rasche, Executive Chairman
Nick Bate, Finance Director
Weber Shandwick Financial 0207 067 0700
Nick Oborne / Louise Robson/John Moriarty
KBC Peel Hunt 0207 418 8900
Oliver Scott/Richard Kauffer/Nic Marren
(1)Defined as September 2007 revenues on an annualised basis.
(2)Adjusted EBITA being Operating Profit as shown on the face of the Condensed
consolidated income statement (2007: #4,286,000 2006: #3,087,000), plus intangible
amortisation (2007: #528,000 2006 #161,000), plus reorganisation costs
(2007: #560,000, 2006: #nil) and share option costs (2007: #nil, 2006 236,000)
charged to the Condensed consolidated income statement during the relevant period.
(3)Adjusted EPS calculated as explained in note 4.
Notes to Editors
SSP is a market-leading IT systems and services provider to the global insurance
and financial services industries. With over two decades' experience, SSP has a
proud history of delivering innovative solutions that improve business control,
productivity and efficiency. SSP has the largest share, by revenue, of the UK
retail general insurance broker and intermediary systems market as well as the
largest installed base of general insurer systems in the UK.
SSP has a unique 'carrier to consumer' proposition whereby its solutions
facilitate communication and interaction across all participants in the
insurance chain, starting with insurance underwriters or agencies and ending
with consumers. At one end of the chain, the Group's solutions enable the
consumer to purchase insurance products through a range of channels including
intermediaries, brokers, call centres, affinity groups and the internet. At the
other end of the chain, the Group provides insurers with back office and
administration solutions.
SSP is the partner of choice for insurance businesses worldwide, with more than
31,000 users in over 50 countries. Customers include; Fortis, Admiral, Norwich
Union, AON, Brit, QBE, Zurich, ACE, RBS, HSBC Insurance Brokers, Jardine Lloyd
Thompson, Towergate, Swinton, Kwik Fit Insurance Services, Oval, Willis
Commercial Network.
Nearly 700 people support customers from headquarters in Halifax and offices in
Birmingham, the South of England, Northern Ireland, the Republic of Ireland,
Denmark, South Africa, Australia, New Zealand, Kenya, India and the United
States.
SSP is quoted on AIM and has a market capitalisation of approximately #120m.
SSP Holdings plc
Interim results for the six months ended 30 September 2007
Chairman's Half Year Statement
The first half of the year was another period of excellent progress for SSP.
Our financial results were in line with the Board's expectations, with revenues
of #26.4m being 47% above last year and an adjusted EBITA (as defined in the
highlights section above) 54% ahead at #5.4m. Profit before tax increased to
#2.7m (H1 2006: #1.8m). Following the acquisition of Sirius, the business is
significantly larger than a year ago; we have made good progress towards
realising the benefits of its integration into the enlarged Group, while at the
same time continuing to achieve double digit organic growth from the original
business and maintaining good margins and the high quality of our revenues. Our
annualised revenue run-rate is now approximately #69 million.
Since the acquisition of Sirius, the business is positioned even more strongly
in the UK and international markets. We are now clearly the leading provider in
the UK market and one of the largest worldwide in specialist general insurance
software. We are ideally placed to benefit from moves towards more flexible
systems, straight through processing and internet-traded insurance, as well as
the continuing consolidation of insurance businesses worldwide. Our carrier to
consumer proposition and greater scale make us an increasingly strong contender,
internationally, when insurers and corporate brokers look for new systems.
Transaction revenues and eBusiness projects continue to grow well in the UK and
we continue to build stronger relationships with our corporate brokers and
insurer customers, ensuring strong revenue visibility.
Employees
We have brought together two businesses with a total workforce of almost 700
people. I am tremendously impressed with the enthusiasm of the combined team and
how quickly everyone has melded together in the enlarged business, with many
people leading or joining new teams. We have very talented and experienced
people at all levels within our business and I am grateful to them all for the
hard work and professionalism, which they have exhibited over the last six
months.
Outlook
Since the Sirius acquisition we now have customers in 50 countries and offices
in 10. Our relationship style will allow us to build on this base and extend our
products and services to both existing customers and new ones in these countries
and beyond.
There is increased activity around the world in insurance companies looking to
replace or improve systems and this bodes well for the business in the medium
and longer term.
The Board remains confident that the business will perform well in its
traditionally stronger second half, with the benefit of a full six month
contribution from the Sirius acquisition, and that we will meet management's
expectations for the full financial year.
David A Rasche
Executive Chairman
5 December 2007
Chief Executive's Half Year Report
Performance
I am pleased to report performance in line with our expectations for the first
half of the year, with an adjusted EBITA (as defined in the highlights section
above) of #5.4 million, on revenues of #26.4 million. The results of the Sirius
business are included for the period since its acquisition on 10th July 2007.
Excluding revenue from Sirius of #5.2million and revenue from the smaller
African insurer systems business acquired at the end of March 2007 of #1.0
million, we achieved underlying organic revenue growth of 12% year-on-year.
Our delivery of annualised synergies of approximately #2 million, highlighted as
part of the Sirius acquisition, has also been in line with our expectations,
with further cost savings expected in the next financial year.
Tight cost control and cash management throughout the period has resulted in net
debt at 30 September being #0.8m better than budgeted at #38.4 million.
This overall result is underpinned by strong performances in each of our four
operating divisions:-
Our Intermediary Division, responsible for delivering products and services to
our small and medium-sized intermediary customers, continues to develop its
transaction-based revenues. The implementation of Household Insurance e-trading,
the growth of Private Motor e-trading and the development of the internet
channel continue to deliver high margin growth.
The Corporate Division, responsible for bespoke propositions to our large
corporate broking customers, has developed a mature and robust set of
propositions that are delivering strong revenues in call centres and the larger
networks; this is also fuelling further growth in our transaction-based
revenues.
The UK Insurer Division, where we supply products and services to general
insurance companies in the UK, has, in partnership with RBS Insurance's Direct
Line operation, jointly delivered a commercial lines web-trading platform for
SMEs. Good support and maintenance and continued service improvement is
delivering a strong performance from the Insure+ customers. Overall prospects
for this division moving forward are encouraging with our new InsureJ
proposition and good opportunities for our S4I product.
Our International Division is starting to gain a foothold in the emerging
markets with recent implementations in India and Africa as well as Australasia
and the US. The prospects for the International Division look strong and our
enhanced operational capability will be pivotal in delivering continued
profitable growth from this division.
The Sirius Acquisition
The Sirius acquisition, the rationale for which was to provide scale and
enhanced capability in a number of areas, is progressing well. We have developed
a clear product strategy and a robust operating structure that will deliver
improved margins in the Intermediary and Corporate Divisions. Growth in our
Insurer and International Divisions will be underpinned by our improved
capability in both operations and sales and marketing.
Following the acquisition we also developed a new brand identity, mirroring the
successful internal integration by uniting the two businesses in the eyes of our
customers.
Markets
We are starting to see a change in the buying habits of general insurance
companies toward increased spend in core administration capability. This change,
which began in the US and is being followed in the UK, is underpinned by the
need to deliver channel integration, speed to market, client self service and
the ability to improve relationships with third parties through process
improvement. It is difficult for existing insurer systems to satisfy these
requirements, which provides further opportunity for our InsureJ and S4I
propositions.
The UK intermediary market is continuing to consolidate. These highly regulated,
more professional and acquisitive businesses are turning to SSP, as the market
leader, to gain competitive advantage and improved efficiencies through IT.
Internationally there is a growing demand for more sophisticated insurance
solutions where we are well positioned because of our carrier to consumer
proposition, market expertise and greater scale.
Summary
I am pleased with our financial result for the half year, meeting the
commitments to our stakeholders in our first 12 months as a listed company. We
have made very good progress in integrating the Sirius acquisition and I am
looking forward to delivering our expected result for the full year.
Laurence JB Walker
Chief Executive
5 December 2007
Adoption of International Financial Reporting Standards ("IFRS")
The group is listed on the Alternative Investment Market and as such, we are
required to prepare our financial statements for the year ending 31 March 2008
in accordance with IFRS.
The financial information reported in these interim statements has therefore
been prepared in accordance with IFRS and comparative information has been
restated accordingly. The effect of the restatement of prior periods results and
balance sheets in accordance with IFRS and the reconciliations from UK GAAP to
IFRS are set out in note 6 to these interim financial statements.
In adopting IFRS, we have:
*Reversed the goodwill amortisation charged during the year ended 31 March
2007 and frozen the goodwill balance as at 1 April 2006. Under IFRS,
goodwill is subject to an annual review for impairment rather than being
amortised.
*Reclassified capitalised software from tangible fixed assets to
intangible fixed assets with a corresponding reclassification of the related
amortisation charge from depreciation to amortisation
*Capitalised certain product development costs which satisfy the criteria
in IAS 38
*Recorded the fair value of our interest rate collar on the balance sheet
with movements in the fair value being reflected through the income
statement. Accounting for the interest rate collar has no impact on the
restatement of prior periods as the fair value of such instruments in prior
periods is immaterial.
*Attributed a value to the separable intangible assets within the
acquisition of Sirius Financial Solutions Plc in the current period and the
South African business in the prior period with a charge for amortisation
over the useful economic life along with a corresponding deferred tax
liability.
The change to IFRS has had no impact on the group's cash flows.
Condensed consolidated income statement
For the six months ended 30 September 2007
Unaudited Unaudited 12 month
Six months Six months period
ended 30 ended 30 ended 31
September September March
2007 2006 2007
Total Total Total
Notes
#'000 #'000 #'000
Revenue - Continuing operations 26,371 17,891 38,621
Cost of sales (16,948) (11,482) (23,026)
Gross profit 9,423 6,409 15,595
Operating expenses
- Other (4,049) (2,925) (5,808)
- Intangible amortisation (528) (161) (46)
- Share option expense - (236) (236)
- Reorganisation costs (560) -
Total operating expenses (5,137) (3,322) (6,090)
Operating profit
- continuing operations 4,286 3,087 9,505
Interest Received 59 140
Finance costs (1,633) (1,323) (3,262)
Profit on ordinary activities
before taxation 2,712 1,764 6,383
Taxation 3 (881) 2,556 1,106
Profit for the period
attributable to equity
shareholders of the parent 1,831 4,320 7,489
Basic earnings per share 4 2.4p 11.3p 13.5p
Diluted earnings per share 4 2.4p 11.3p 13.5p
Adjusted earnings per 4 5.8p 5.7p 12.1p
share
There is no recognised income or expense for the financial period other than
those shown in the Condensed consolidated income statement above and
consequently no separate statement of recognised income and expense has been
presented.
Condensed consolidated balance sheet
As at 30 September 2007
Unaudited Unaudited
30 September 30 September 31 March
2007 2006 2007
#'000 #'000 #'000
Non-current assets
Goodwill 74,860 43,117 42,996
Intangible assets 14,144 148 779
Property, plant &
equipment 3,809 1,589 1,985
92,813 44,854 45,760
Current assets
Inventories 191 46 94
Trade and other receivables 18,365 9,197 11,655
Corporation tax - 2,003 841
Cash & cash equivalents 5,844 4,051 6,089
Total current assets 24,400 15,297 18,679
Current liabilities
Trade & other payables (13,091) (8,285) (7,150)
Current tax liabilities (261) - -
Bank loans (7,000) (1,743) (1,500)
Deferred consideration (2,563) - (4,177)
Total current liabilities (22,915) (10,028) (12,827)
Net Current assets 1,485 5,269 5,852
Non-current liabilities
Derivative financial
instruments (680)
Bank loans (34,673) (27,393) (13,927)
Deferred consideration - (2,102) -
Long term provision (830) - -
Deferred tax liability (3,891) - (386)
Total non-current
liabilities (40,074) (29,495) (14,313)
Net assets 54,224 20,628 37,299
Equity
Called up share capital 82 53 72
Share premium account 29,335 811 14,293
Merger reserve 15,143 15,143 15,143
Capital redemption reserve 50 50 50
Other reserve - 543 -
Retained earnings 9,614 4,028 7,741
Equity attributable to
equity holders of the
parent 54,224 20,628 37,299
Condensed consolidated cash flow statement
For the six months ended 30 September 2007
Unaudited Unaudited
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2007 2006 2007
#'000 #'000 #'000
Net cash from operating
activities 3,021 3,179 7,230
Investing activities
Interest received 59 0 140
Purchases of property,
plant & equipment (1,399) (548) (1,787)
Acquisition of subsidiary (31,977) 281 357
Net cash used in
investing activities (30,296) (267) (1,084)
Financing activities
Dividends paid - (8) (8)
Hire purchase repayments - - (18)
Repayment of borrowings (18,790) (1,561) (32,043)
Proceeds of issue of new shares 4,802 - 14,083
New bank loans raised 44,039 - 15,427
Net cash used in financing
activities 30,051 (1,569) (2,559)
Net increase / (decrease)
in cash and cash
equivalents (245) 1,343 3,381
Cash and cash equivalents
at beginning of year 6,089 2,708 2,708
Cash and cash equivalents
at end of period 5,844 4,051 6,089
Notes to the Interim Accounts
1 Basis of preparation
These interim financial statements do not constitute statutory accounts within
the meaning of S240 of the Companies Act 1985 and have not been delivered to the
Registrar of Companies. The results for the six months ended 30 September 2007
and 30 September 2006 have been reviewed, but not audited, by the auditors.
As a company listed on the Alternative Investment Market ("AIM") the
consolidated financial statements for the year ended 31 March 2008 are required
to be presented in accordance with International Financial Reporting Standards
("IFRS").
The interim financial information has been prepared in accordance with
International Financial Reporting Standards ("IFRS") and comparative information
has been restated accordingly.
The group has adopted revised accounting policies in accordance with IFRS and
the interim financial information has been prepared in accordance with these
accounting policies which have been published on the group's website
www.ssp-uk.com/accountingpolicies.
The impact of adopting IFRS is set out in note 6 to these interim financial
statements.
The amounts shown for the 12-month period ended 31 March 2007 have been
extracted from the audited accounts and restated in accordance with IFRS as
explained further in note 6. Those accounts contain an unqualified auditors'
report and do not include any statement under Section 237 (2) or (3) of the
Companies Act 1985 and have been delivered to the Registrar of Companies.
2 Revenue and net assets
Revenue, profit and net assets in the period all materially arose in the U.K,
and were wholly attributable to the principal activity of the Group.
3 Tax on profit on ordinary activities
The charge for taxation is based on an estimate of the likely effective tax rate
anticipated for the full financial year.
4 Earnings per share
(a) Earnings per share
The figure for basic earnings per share is calculated by dividing the net profit
/(loss) for the period attributable to ordinary shareholders ('Earnings') by the
weighted average number of shares in issue during the period.
Unaudited Unaudited 12 months
6 months ended 6 months ended ended
30 September 30 September 31 March
2007 2006 2007
#'000 #'000 #000
Net profit/(loss) for the
period attributable to
ordinary shareholders(#'000) 1,831 4,320 7,489
Weighted average number of
shares in issue in the
period 76,587,747 38,127,419 55,288,383
(b) Adjusted earnings per share
Unaudited Unaudited 12 months
6 months ended 6 months ended ended
30 September 30 September 31 March
2007 2006 2007
Net profit/(loss) for the
period attributable to
ordinary shareholders (#'000) 1,831 4,320 7,489
Adjustments to earnings:
Exceptional reorganisation
costs 560 - -
Interest rate collar 680 - -
Taxation 881 (2,556) (1,106)
Amortisation 528 161 46
Share option expense - 236 236
Adjusted earnings 4,480 2,161 6,665
(c) Diluted earnings per share
Diluted earnings per share are calculated after taking into account the dilutive
effect of options over ordinary shares, which have been granted by the Company.
There is no dilutive impact of share options outstanding in any of the periods
reported.
5 Net cash from operating activities
Unaudited Unaudited
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2007 2006 2007
#'000 #'000 #'000
Profit for the period 1,831 4,320 7,489
Adjustments for:
Finance costs 1,574 1,323 3,122
Income tax expense 881 (2,556) (1,106)
Depreciation of property, plant &
equipment 763 814 1,587
Amortisation of intangible assets 528 161 46
Share based payment expense - 236 236
Operating cash flows before
movement in working capital 5,577 4,298 11,374
(Increase)/decrease in inventories (82) 132 84
Decrease/ (increase) in
receivables 635 418 (2,191)
(Decrease)/increase in payables (1,484) (753) 157
Cash generated by operations 4,646 4,095 9,424
Income taxes (paid) /received (55) 229 205
Interest paid (1,570) (1,145) (2,399)
Net cash from operating activities 3,021 3,179 7,230
6 First time adoption of IFRS
The year ending 31 March 2008 is the first year that the Group will present its
consolidated financial statements under International Financial Reporting
Standards (IFRS). The last financial statements under UK GAAP were for the year
to 31 March 2007, the Group's date of transition to IFRS was therefore 1 April
2006. The disclosures required in the period of transition are given below.
The adoption of IFRS represents an accounting change only and does not affect
the operations or cash flows of the group.
Reconciliation of equity at 30 September 2006
UK GAAP Effect of
30 September transition to Restated
2006 IFRS under IFRS
#'000 #'000 #'000
Non-Current Assets
Goodwill 40,651 2,466 43,117
Intangible assets 92 56 148
Property, plant &
equipment 1,644 (56) 1,589
42,387 2,466 44,854
Current assets
Inventories 46 - 46
Trade and other
receivables 9,197 - 9,197
Corporation tax 2,003 - 2,003
Cash & cash
equivalents 4,051 - 4,051
Total assets 15,297 - 15,297
Current Liabilities
Trade & Other
Payables 8,285 - 8,285
Bank loans 1,743 - 1,743
Total current
liabilities 10,028 - 10,028
Net Current Assets 5,269 - 5,269
Non-Current
Liabilities
Deferred
consideration 2,102 - 2,102
Bank loans 27,393 - 27,393
Total non-current
liabilities 29,495 - 29,495
Net assets 18,161 2,466 20,628
Equity
Called up share
capital 53 - 53
Share premium
account 811 - 811
Merger reserve 15,143 - 15,143
Capital redemption
reserve 50 - 50
Other reserve 543 - 543
Retained earnings 1,561 2,466 4,028
Equity attributable to
equity holders of the
parent 18,161 2,466 20,628
Notes to the reconciliation of equity at 30 September 2006
1 The application of IAS 38 requires computer software to be recognised as an
intangible asset. Computer software under UK GAAP was capitalised and recorded
as property, plant and equipment. Assets with a net book value of #56,000 have
been reclassified
2 Under UK GAAP goodwill was amortised over its useful economic life, but under
IFRS no amortisation charge is made. This increases reported profit for the
period ended 30 September 2006 by #2,466,000
Reconciliation of equity at 31 March 2007
Effect of
UK GAAP transition to Restated
31 March 2007 IFRS under IFRS
#'000 #'000 #'000
Non-Current Assets
Goodwill 38,462 4,534 42,996
Intangible assets 87 692 779
Property, plant &
equipment 2,068 (83) 1,985
40,617 5,143 45,760
Current assets
Inventories 94 - 94
Trade and other
receivables 11,655 - 11,655
Corporation tax 841 - 841
Cash & cash
equivalents 6,089 - 6,089
Total assets 18,679 - 18,679
Current Liabilities
Trade & Other
Payables 7,150 - 7,150
Current tax
liabilities - - -
Deferred
consideration 4,177 - 4,177
Bank loans 1,500 - 1,500
Total current
liabilities 12,827 - 12,827
Net Current Assets 5,852 - 5,852
Non-Current
Liabilities
Bank loans 13,927 - 13,927
Deferred tax liability 264 122 386
Net assets 32,278 5,021 37,299
Equity
Called up share
capital 72 - 72
Share premium
account 14,293 - 14,293
Merger reserve 15,143 - 15,143
Capital redemption
reserve 50 - 50
Other reserve - - -
Retained earnings 2,720 5,021 7,741
Equity attributable to
equity holders of the
parent 32,278 5,021 37,299
SSP Holdings plc
Notes to the Interim Accounts
Notes to the reconciliation of equity at 31 March 2007
1 The application of IAS 38 requires computer software to be recognised as an
intangible asset. Computer software under UK GAAP was capitalised and recorded
as property, plant and equipment. Assets with a net book value of #83,000 have
been reclassified
2 Under UK GAAP goodwill was amortised over its useful economic life, but under
IFRS no amortisation charge is made. This increases reported profit for the
period ended 31 March 2007 by #4,815,000
3 In accordance with IFRS 3, intangible assets with a value of #403,000 have
been recognised in relation to the acquisition of Software Solutions Partners
(Pty) Limited, with a corresponding reduction to goodwill. A related deferred
tax liability of #122,000 arises.
4 Under UK GAAP, the accounting policy was to expense all research and
development in the period that it was incurred. Under IAS 38, however,
development costs must be capitalised and amortised if certain criteria are met.
Whilst the majority of the Group's software development activity did not meet
the strict criteria for recognition in IAS 38, on transition, costs of #206,000
were capitalised during the 12 month period to 31 March 2007. No amortisation
has yet been charged in respect of the capitalised costs
Reconciliation of equity at 1 April 2006
Effect of
UK GAAP transition to Restated
31 March 2006 IFRS under IFRS
#'000 #'000 #'000
Non-Current Assets
Goodwill 43,342 - 43,342
Intangible assets 92 44 136
Property, plant &
equipment 2,072 (44) 2,028
45,506 - 45,506
Current assets
Inventories 178 - 178
Trade and other
receivables 9,032 - 9,032
Corporation tax 133 - 133
Cash & cash
equivalents 2,708 - 2,708
Total assets 12,051 - 12,051
Current Liabilities
Trade & Other
Payables 8,992 - 8,992
Current tax
liabilities - - -
Bank loans 4,052 - 4,052
Total current
liabilities 13,044 - 13,044
Net Current Assets (993) - (993)
Non-Current
Liabilities
deferred
consideration 2,731 - 2,731
Bank loans 25,826 - 25,826
Deferred tax liability 457 - 457
Net assets 15,499 - 15,499
Equity
Called up share
capital - - -
Share premium 282 - 282
account
Merger reserve 15,143 - 15,143
Capital redemption
reserve - - -
Other reserve 664 - 664
Retained earnings (590) - (590)
Equity attributable to
equity holders of the
parent 15,499 - 15,499
SSP Holdings plc
Notes to the Interim Accounts
Notes to the reconciliation of equity at 1 April 2006
1 The application of IAS 38 requires computer software to be recognised as an
intangible asset. Computer software under UK GAAP was capitalised and recorded
as property, plant and equipment. Assets with a net book value of #44,000 have
been reclassified.
Reconciliation of profit for the year ended 31 March 2007
UK GAAP
Unaudited
Year ended Effect of
31 March transition Restated
2007 to IFRS under IFRS
Total Total Total
#'000 #'000 #'000
Revenue - Continuing operations 38,621 - 38,621
Cost of sales (23,026) - (23,026)
Gross profit 15,595 - 15,595
Operating expenses - other (6,014) 206 (5,808)
- Intangible amortisation (4,861) 4,815 (46)
- share option expense (236) - (236)
- Exceptional Reorganisation costs - - -
Total operating expenses (11,111) 5,021 (6,090)
Operating profit - continuing
operations 4,484 5,021 9,505
Interest Received 140 - 140
Finance costs (3,262) - (3,262)
profit on ordinary activities before
taxation 1,362 5,021 6,383
Taxation 1,106 - 1,106
Profit for the period
attributable to equity
shareholders of the parent 2,468 5,021 7,489
Notes to the reconciliation of profit for the year ended 31 March 2007
1 Under UK GAAP goodwill was amortised over its useful economic life, but under
IFRS no amortisation charge is made. This increases reported profit for the year
ended 31 March 2007 by #4,815,000
2 Under UK GAAP, the accounting policy was to expense all research and
development in the period that it was incurred. Under IAS 38, however,
development costs must be capitalised and amortised if certain criteria are met.
SSP Holdings plc
Notes to the Interim Accounts
Whilst the majority of the Group's software development activity did not meet
the strict criteria for recognition in IAS 38, on transition, costs of #206,000
were capitalised during the 12 month period to 31 March 2007. No amortisation
has yet been charged in respect of the capitalised costs
Reconciliation of profit for the period ended 30 September 2006
UK GAAP
Unaudited
Six months
ended 30 Effect of
September transition Restated
2006 to IFRS under IFRS
Total Total Total
#'000 #'000 #'000
Revenue - Continuing operations 17,891 - 17,891
Cost of sales (11,483) 1 (11,482)
Gross profit 6,408 1 6,409
Operating expenses - other (3,086) 161 (2,925)
- Intangible amortisation (2,466) 2,305 (161)
- share option expense (236) - (236)
- Exceptional Reorganisation costs - -
Total operating expenses (5,788) 2,466 (3,322)
Operating profit - continuing
operations 620 2,467 3,087
Interest Received - - -
Finance costs (1,323) - (1,323)
profit on ordinary activities before
taxation (703) 2,467 1,764
Taxation 2,556 - 2,556
Profit for the period
attributable to equity
shareholders of the parent 1,853 2,467 4,320
Notes to the reconciliation of profit for the period ended 30 September 2006
1 Under UK GAAP goodwill was amortised over its useful economic life, but under
IFRS no amortisation charge is made. This increases reported profit for the
period ended 30 September 2006 by #2,305,000
SSP Holdings plc
Notes to the Interim Accounts
Note 7 Report
Copies of this report will be sent to all shareholders. Further copies of this
report are available from the Company Secretary, Fearnley Mill, Dean Clough,
Halifax, West Yorkshire HX3 5AX for a period of one month from today's date and
thereafter from the Company's website at www.ssp-uk.com.
INDEPENDENT REVIEW REPORT TO SSP HOLDINGS PLC
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007, which comprises the income statement, the balance sheet, the
statement of changes in equity, the cash flow statement and related notes 1 to 7
. We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with International
Standard on Review Engagements 2410 issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report have been prepared in accordance with the accounting policies the group
intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with the AIM Rules of the London Stock
Exchange.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditor
Leeds
4th December 2007
--------------------------
(1) Defined as September 2007 revenues on an annualised basis.
(2) Adjusted EBITA being Operating Profit as shown on the face of the Condensed
consolidated income statement (2007: #4,286,000 2006: #3,087,000), plus
intangible amortisation (2007: #528,000 2006: #161,000), plus reorganisation
costs (2007: #560,000, 2006: #nil) and share option costs (2007: #nil, 2006:
#236,000) charged to the Condensed consolidated income statement during the
relevant period.
(3) Adjusted EPS calculated as explained in note 4.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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