TIDMWFCA
RNS Number : 2151S
WFCA PLC
06 September 2010
WFCA plc
("WFCA", the"Company" or the "Group")
AUDITED RESULTS FOR THE YEAR ENDED 30 June 2010
WFCA plc (AIM: WFCA.L), a leading regional advertising and marketing agency,
today announces its final results for the year ended ended 30 June 2010
Highlights
- Net profit before tax, exceptional items and discontinued operations
of GBP802,738 (2009: GBP750,113).
- Net assets of the Group have increased to GBP7.8 million.(2009: GBP7.2
million).
- gross margin has been increased from 18.1% to 18.7%.
Further enquiries:
WFCA plc
Stephen Latter, Financial Director Tel: 01892
511 085
Daniel Stewart & Company plc
Oliver Rigby/James Felix Tel: 020
7776 6550
Chairman's and Chief Executive's Statement
for the year ended 30th June 2010
Business Review & Summary
We are pleased to announce that, for the year ended 30th June 2010 and despite
the on-going challenging market place, WFCA has delivered a net profit before
tax, exceptional items and discontinued operations of GBP802,738 which
represents a 7% increase on the previous year's profit of GBP750,113.
This performance is particularly pleasing as it has been achieved against a
background of a GBP1,104,120 reduction in gross profit and is therefore
primarily the result of careful internal cost management. We are mindful however
that the company needs to win new accounts and are pleased that the current
pipeline of opportunities remains buoyant.
The new business environment remains challenging but we are pleased to say that
we won a series of new accounts including Zip, Codorniu Wines, Kent
International Airport, Dream Doors and Caravan Club. We have also continued to
be successful in winning awards for the quality of our advertising. Dream Doors
won two honours for 'Best Print Advert' and 'Best Overall Marketing Campaign' at
this year's Franchise Marketing Awards and Yazoo followed its gold at the 2009
Fresh Awards with further success at the Roses in the category for best
30-second TV commercial.
As part of streamlining administration to achieve optimum control, we critically
evaluated all internal processes and costs during the year. While ISO 9001 was
not the prime reason for embarking upon this exercise, we are pleased to
announce that we subsequently invited the British Assessment Bureau to audit our
systems and were awarded ISO 9001 accreditation in March 2010. The review was
crucial to achieving the increase in operating margin referred to in the
financial summary below and the company intends to review its processes annually
to maintain optimum operational efficiency.
The on-going credit restrictions within the market generally and the desire to
improve the Group's working capital position, has meant that strategic growth
through acquisition has been deferred. However, we continue to pursue
opportunities as they arise and it remains a corporate objective to develop the
Group moving forward.
In a very challenging market place we would like to thank all our staff for
their unfailing support and commitment to the company.
Financial Summary
Our results have been the reward for very tight internal control during a period
of depressed marketing budgets. Despite the decrease in gross profit referred to
above, gross margin has been increased from 18.1% to 18.7% reflecting the Group
strategy to move upstream and into higher margin services. The operating margin
has been increased from 14.5% to 17.1%. The net assets of the Group have
increased by GBP641,200 to GBP7.8 million.
In reaction to the significant client loss in December 2009, the Group
immediately restructured its cost base to minimise the adverse affect and
consequently there was only a marginal impact on profitability. The exceptional
cost of GBP125,589 reported in the accounts reflects the cost of associated
staff redundancies. The GBP46,526 profit from discontinued operations arose from
the write back of all provisions connected with the cessation of the Group's
Channel Islands division in 2008.
Over the last two years the company has looked to improve the Group's working
capital and we are pleased that good progress has been made. While some of this
improvement arose from the inward investment reported in the 2009 statement,
much has arisen from the cash generated from the Group's profitability. As part
of this process, the banking facilities of the Group have been restructured to
create GBP700,000 of Long Term Debt
The directors do not consider it prudent to recommend the payment of a dividend
from the reported year's profits. The delivery of profit in the year reveals a
shift of emphasis from the first half of the financial year to a more even
distribution. This change is expected to accelerate into the new financial year
as the client base becomes less reliant on Autumn and Christmas marketing
budgets.
Outlook
Client marketing budgets continue to be depressed with few of our clients
expecting to increase their marketing expenditure in the next financial year.
Also, we anticipate the loss of a significant client in the second quarter of
the new financial year which will necessitate further cost restructuring to
mitigate the associated income loss. We therefore expect a challenging trading
year ahead but with the board's commitment to react to changing conditions we
still expect to remain profitable, although it is likely that profits will fall
below current market expectations. Despite this the board remain positive about
the future prospects of the Group.
Michael Richards
Chief Executive
Group Income Statement
For the Year Ended 30th June 2010
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | Year | Year |
| | | | | ended | ended |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | 30th | 30th |
| | | | | June | June |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | Before |Exceptional | 2010 | 2009 |
| | | Exceptional | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | Items | Items | Total | Total |
+---------------------+-------+--------------+-------------+--------------+--------------+
| |Notes | GBP | GBP | GBP | GBP |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Revenue | 1 | 26,458,225 | - | 26,458,225 | 33,387,852 |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Direct costs | | (21,504,575) | - | (21,504,575) | (27,330,082) |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Gross profit | | 4,953,650 | - | 4,953,650 | 6,057,770 |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Other operating | 2 | 6,513 | - | 6,513 | 8,700 |
| income | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Operating costs | | (4,015,484) | (125,589) | (4,141,073) | (5,353,464) |
| before share option | | | | | |
| charge | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Share option charge | | (7,600) | - | (7,600) | (14,100) |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Total operating | 3 | (4,023,084) | (125,589) | (4,148,673) | (5,367,564) |
| costs | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Depreciation | | (90,561) | - | (90,561) | (95,210) |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Total operating | | 846,518 | (125,589) | 720,929 | 603,696 |
| profit | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Net finance cost | 7 | (43,780) | - | (43,780) | (126,047) |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Profit before | | 802,738 | (125,589) | 677,149 | 477,649 |
| taxation | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Income tax charge | 8 | (167,676) | - | (167,676) | (128,123) |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Profit before | | 635,062 | (125,589) | 509,473 | 349,526 |
| Discontinued | | | | | |
| Operations | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Profit from | 10 | 46,526 | - | 46,526 | 265,093 |
| Discontinued | | | | | |
| Operations | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Profit for the year | | | | | |
| attributable | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| to equity holders | | 681,588 | (125,589) | 555,999 | 614,619 |
| of the parent | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Earnings per share | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Basic earnings per | 15 | | | 0.21p | 0.37p |
| share | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
| Diluted earnings | 15 | | | 0.19p | 0.36p |
| per share | | | | | |
+---------------------+-------+--------------+-------------+--------------+--------------+
No Group Statement of Comprehensive Income has been prepared because there were
no material gains or losses for the year other than those recognised in the
Income Statement.
Group and Company Balance Sheets
At 30th June 2010
+--------------------------+-------+------------+------------+------------+------------+
| | | Group | Company |
+--------------------------+-------+-------------------------+-------------------------+
| | | As at | As at | As at | As at |
+--------------------------+-------+------------+------------+------------+------------+
| | | 30th | 30th | 30th | 30th |
| | | June | June | June | June |
+--------------------------+-------+------------+------------+------------+------------+
| | | 2010 | 2009 | 2010 | 2009 |
+--------------------------+-------+------------+------------+------------+------------+
| |Notes | GBP | GBP | GBP | GBP |
+--------------------------+-------+------------+------------+------------+------------+
| Assets | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Non-current assets | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Property, plant and | 9 | 143,517 | 291,135 | - | 156,341 |
| equipment | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Goodwill | 10 | 8,497,909 | 8,497,907 | - | - |
+--------------------------+-------+------------+------------+------------+------------+
| Investments in | 10 | - | - | 10,100,509 | 10,100,509 |
| subsidiaries | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Corporate income tax | 11 | 420,716 | 541,764 | 420,716 | 541,764 |
| recoverable | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | 9,062,142 | 9,330,806 | 10,521,225 | 10,798,614 |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Current Assets | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Trade and other | 11 | 2,417,987 | 3,162,676 | 847,018 | 565,181 |
| receivables | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Cash and short term | 12 | 105,719 | 80,917 | 2,359 | 8,753 |
| deposits | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Assets held for sale | 9 | 190,000 | - | 190,000 | - |
+--------------------------+-------+------------+------------+------------+------------+
| | | 2,713,706 | 3,243,593 | 1,039,377 | 573,934 |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Total Assets | | 11,775,848 | 12,574,399 | 11,560,602 | 11,372,548 |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Equity and Liabilities | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Share capital | 14 | 2,684,660 | 2,657,809 | 2,684,660 | 2,657,809 |
+--------------------------+-------+------------+------------+------------+------------+
| Share premium | 17 | 1,434,398 | 1,383,648 | 1,434,398 | 1,383,648 |
+--------------------------+-------+------------+------------+------------+------------+
| Retained earnings | 19 | 3,640,359 | 3,076,760 | 2,942,890 | 2,627,316 |
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | 7,759,417 | 7,118,217 | 7,061,948 | 6,668,773 |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Non Current Liabilities | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Long term borrowings | | 700,000 | - | - | - |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Current Liabilities | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Trade and other payables | 20 | 3,193,942 | 5,214,329 | 4,489 060 | 4,591,995 |
+--------------------------+-------+------------+------------+------------+------------+
| Provisions for other | | | | | |
| liabilities and | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| charges | 24 | 46,594 | 192,376 | 9,594 | 111,780 |
+--------------------------+-------+------------+------------+------------+------------+
| Corporate income tax | 8 | 75,895 | 49,477 | - | - |
| payable | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| | | 3,316,431 | 5,456,182 | 4,498,654 | 4,703,775 |
+--------------------------+-------+------------+------------+------------+------------+
| | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
| Total Equity and | | 11,775,848 | 12,574,399 | 11,560,602 | 11,372,548 |
| Liabilities | | | | | |
+--------------------------+-------+------------+------------+------------+------------+
The financial statements on pages 14 to 42 were approved by the board of
directors and authorised for issue on 1st September 2010 and are signed on its
behalf by
Steve Latter
Director
Group and Company Statement of Changes in Equity
For the Year Ended 30th June 2010
Group
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | Share | Share | Retained | Special | |
| | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | Capital | Premium | Earnings | Reserve | Total |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | GBP | GBP | GBP | | GBP |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 1st July |1,568,088 | - | (3,422,366) | 6,499,126 | 4,644,848 |
| 2008 | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue of share capital |1,089,721 |1,484,682 | - | - | 2,574,403 |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue costs | - | (101,034) | - | - | (101,034) |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Transfer from special | - | - | 6,499,126 |(6,499,126) | - |
| reserve | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 1st July | 2,657,809 |1,383,648 | 3,076,760 | - | 7,118,217 |
| 2009 | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Profit for the year | - | - | 555,999 | - | 555,999 |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Other comprehensive | | | | | |
| income; | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Charge for share | - | - | 7,600 | - | 7,600 |
| options | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Total comprehensive | - | - | 563,599 | - | 563,599 |
| income for the year | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | 2,657,809 | 1,383,648 | 3,640,359 | - | 7,681,816 |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue of share capital | 26,851 | 50,750 | - | - | 77,601 |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 30th June | 2,684,660 | 1,434,398 | 3,640,359 | - | 7,759,417 |
| 2010 | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+-------------------------+-----------+-----------+-------------+-------------+-----------+
Company
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | Share | Share | Retained | Special | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | Capital | Premium | Earnings | Reserve | Total |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | | GBP | GBP | | GBP |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 1st July | 1,568,088 | - | (3,871,810) | 6,499,126 | 4,195,404 |
| 2008 | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue of share capital | 1,089,721 | 1,484,682 | - | - | 2,574,403 |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue costs | - | (101,034) | - | - | (101,034) |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Transfer from special | - | | 6,499,126 | (6,499,126) | - |
| reserve | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 1st July | 2,657,809 | 1,383,648 | 2,627,316 | - | 6,668,773 |
| 2009 | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Profit for the year | - | - | 307,974 | - | 307,974 |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Other comprehensive | | | | | |
| income; | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Charge for share | - | - | 7,600 | - | 7,600 |
| options | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Total comprehensive | | - | 305,574 | | 305,574 |
| income for the year | | | | - | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | 2,657,809 | 1,383,648 | 2,942,890 | - | 6,984,347 |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Issue of share capital | 26,851 | 50,750 | - | - | 77,601 |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| Balance at 30th June | 2,684,660 | 1,434,398 | 2,942,890 | - | 7,061,948 |
| 2010 | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
| | | | | | |
+------------------------+-----------+-----------+-------------+-------------+-----------+
Group and Company Cash Flow Statement
For the Year Ended 30th June 2010
+--------------------------------+-------------+-------------+-----------+-------------+
| | Group | Company |
+--------------------------------+---------------------------+-------------------------+
| | As at | As at | As at | As at |
+--------------------------------+-------------+-------------+-----------+-------------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+--------------------------------+-------------+-------------+-----------+-------------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------------------------+-------------+-------------+-----------+-------------+
| | GBP | GBP | GBP | GBP |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash Flows from Operating | | | | |
| Activities | | | | |
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Profit / (Loss) from | 677,149 | 462,771 | 382,496 | (56,408) |
| operations | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Share option charge | 7,600 | 14,100 | 7,600 | 14,100 |
+--------------------------------+-------------+-------------+-----------+-------------+
| Discontinued operations | 46,526 | (393,110) | 46,526 | (393,110) |
+--------------------------------+-------------+-------------+-----------+-------------+
| Depreciation of property, | 90,561 | 95,210 | - | 50,176 |
| plant & equipment | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Operating cash flows before | 821,836 | 178,971 | 436,622 | (385,242) |
| movement in working capital | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Loss/(profit) on sale of | 17,805 | 2,873 | - | (3,670) |
| property, plant & equipment | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Reversal of provision for | (33,659) | - | (33,659) | - |
| diminution | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| (Increase) / decrease in | 844,689 | 2,886,472 | (281,837) | 775,242 |
| receivables | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| (Decrease) / increase in | (1,800,119) | (4,139,506) | (172,393) | (1,350,686) |
| payables | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash consumed by operations | (149,448) | (1,071,190) | (51,267) | (964,356) |
+--------------------------------+-------------+-------------+-----------+-------------+
| Income tax paid | (21,949) | - | - | - |
+--------------------------------+-------------+-------------+-----------+-------------+
| Net cash from operating | (171,397) | (1,071,190) | (51,267) | (964,356) |
| activities | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash Flows from Investing | | | | |
| Activities | | | | |
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Interest received | - | 14,877 | - | 1,112 |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash relating to discontinued | - | (134,363) | - | - |
| operations | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Purchase of property, plant & | (116,371) | (54,087) | - | (2,800) |
| equipment | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Net cash from investment | (116,371) | (173,573) | - | (1,688) |
| activities | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash Flows from Financing | | | | |
| Activities | | | | |
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Proceeds on issue of shares | 77,601 | 1,391,515 | 77,601 | 1,391,515 |
+--------------------------------+-------------+-------------+-----------+-------------+
| Costs of share issue | - | (100,930) | - | (101,034) |
+--------------------------------+-------------+-------------+-----------+-------------+
| Net cash from financing | 77,601 | 1,290,585 | 77,601 | 1,290,481 |
| activities | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Net (decrease)/increase in | (210,167) | 45,822 | 26,334 | 324,437 |
| cash and cash equivalents | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash and cash equivalents at | (639,780) | (685,602) | (172,194) | (496,631) |
| 1st July 2009 | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash and cash equivalents at | (849,947) | (639,780) | (145,860) | (172,194) |
| 30th June 2010 | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Represented by: | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
| Cash & short term deposits | 105,719 | 80,917 | 2,359 | 8,753 |
+--------------------------------+-------------+-------------+-----------+-------------+
| Bank overdrafts and loans | (955,666) | (720,697) | (148,219) | (180,947) |
+--------------------------------+-------------+-------------+-----------+-------------+
| Total cash and cash | (849,947) | (639,780) | (145,560) | (172,194) |
| equivalents | | | | |
+--------------------------------+-------------+-------------+-----------+-------------+
Notes to the Financial Statements
For the Year Ended 30th June 2010
A) Significant accounting policies
WFCA plc (the company) is a company domiciled in the United Kingdom and
incorporated in England and Wales. The consolidated financial statements of the
company for the year ended 30th June 2010 comprise the company and its
subsidiary (together referred to as the Group).
B) Statement of compliance
The consolidated financial statements of WFCA plc have been prepared in
accordance with International Financial Reporting Standards (IFRS) incorporating
International Accounting Standards as issued by the International Accounting
Standards Board and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
C) Basis of preparation
The financial statements have been prepared under the historical
cost convention. Non-current assets are stated at the lower of carrying amount
and fair value less costs to sell.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual results may
ultimately differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised, if the revision affects only that period, or in a
period of the revision and future periods if the revision affects both current
and future periods.
Judgements made by management in the application of IFRS that have a significant
effect on the financial statements and estimates with a significant risk of
material adjustment in the next year are discussed where appropriate. Specific
areas where judgments have been made by management relate to the carrying value
of the Group's goodwill over the company's investment in subsidiary
undertakings.
The accounting policies set out below have been applied consistently
to all periods presented in these consolidated financial statements
and in preparing an opening IFRS balance sheet at 1st July 2004 for the purposes
of the transition to IFRS.
The group has adopted IAS1 (revised) during the year.
The accounting policies have been applied consistently by Group
entities.
D) Basis of consolidation
i. Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists
when a Company has the power, directly or indirectly, to govern the financial
and operational policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that presently are
exercisable or convertible are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.
ii. Transactions eliminated on consolidation
Intra group balances and any unrealised gains and losses or income and expenses
arising from intra group transactions, are eliminated in preparing the
consolidated financial statements.
E) Foreign currencies
Transactions in foreign currencies are initially recorded at the
rates of exchange prevailing on the dates of the transactions. Monetary assets
and liabilities denominated in such currencies are retranslated at the rates
prevailing at the balance sheet date. Profits and losses arising on exchange
are included in the net profit or loss for the period.
F) Property, plant and equipment
i. Owned assets
Items of property, plant and equipment are stated at cost less
accumulated depreciation (see below) and impairment losses (see accounting
policy K).
ii. Leased assets
Leases in terms of which the Group assumes substantially all the
risks and rewards of ownership are classified as finance leases.
iii. Depreciation
Depreciation is charged to the income statement over the estimated
useful lives of each part of an item of property, plant and equipment. The
estimated useful lives are as follows:
Leaseholds Over the term of the lease or life of
the asset, if shorter
Fixtures and fittings 20% on a straight line basis
Computer equipment 33% on a straight line basis
During the year the company has changed the method of providing depreciation for
fixtures and fittings and computer equipment from written down value to straight
line as above, and provided for additional depreciation. The effect of
this change in the current year and the additional charge arising from previous
years is immaterial.
G) Intangible assets
Goodwill
All business combinations are accounted for by applying the purchase
method. Goodwill represents the amount arising on acquisition of
subsidiaries. In respect of business acquisitions, goodwill represents
the difference between the cost of the acquisition and the fair value of the net
identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment losses.
Goodwill is allocated to cash-generating units and is no longer amortised but is
tested annually for impairment (see accounting policy K).
Negative goodwill arising on acquisition is recognised directly in
profit or loss.
H) Investments
Investments in debt and equity securities
The group classifies its investments depending on the purpose for
which the investments were acquired. The Directors determine the
classification of its investment at initial recognition and re-evaluates
this designation at every reporting date.
The fair value of unquoted investments is based on valuation
techniques. The Group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
I) Trade and other receivables
Trade and other receivables are started at their cost less
impairment losses (see accounting policy K).
J) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
Bank overdrafts that are repayable on demand and form an integral part of
the Group's cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows.
K) Impairment
The carrying amounts of the Group's assets are reviewed at each
balance sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable amount
is estimated.
For goodwill, assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount is estimated at each
balance sheet date.
An impairment loss is recognised whenever the carrying amount of an
asset or its cash- generating unit exceeds its recoverable amount.
Impairment losses are recognised in the income statement.
The recoverable amount of other assets is the greater of their net
selling price and the value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss in respect of a receivable carried at amortised
cost is reversed if the subsequent increase in recoverable amount can be
related objectively to an event occurring after the impairment loss was
recognised.
In respect of other assets, an impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable
amount.
An impairment loss is only reversed to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss has
been recognised.
L) Share capital
Dividends on ordinary share capital are recognised as a liability in
the period in which they are declared.
M) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between proceeds (net of transaction costs)
and the redemption value is recognised in the income statement over
the period of the borrowings using the effective interest rate method.
N) Employee benefits
Share-based payment transactions
The fair value of employee share option schemes is measured by a
Black-Scholes pricing model. Further details are set out in note 15 in
accordance with IFRS 2 'Share-based Payments'. The resulting cost is
charged to the income statement over the vesting period of the options. The
value of the charge is adjusted to reflect expected and actual levels of
options vesting.
O) Provisions
A provision is recognised in the balance sheet when the Group has a
present legal or constructive obligation as a result of a past event,
and it is probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
P) Trade and other payables
Trade payables are stated at cost.
Q) Revenue recognition
Revenue from services rendered is recognised in the income statement
in proportion to the stage of completion of the transaction at the
balance sheet date. The stage of completion is assessed by reference
to a review of work performed. No revenue is recognised if there are
significant uncertainties concerning the recovery of the consideration
due or associated costs.
R) Expenses
i. Operating lease payments
Payments made under operating leases are recognised in the income
statement on a straight-line basis over the term of the lease. Lease
incentives received are recognised in the income statement as an integral
part of the total lease expense.
ii. Finance lease payments
Minimum lease payments are apportioned between the finance charge
and the reduction of the outstanding liability. The finance charge is
allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
iii. Net financing costs
Net financing costs comprise interest payable on borrowings
calculated using the effective interest rate method and interest received on
funds invested.
Interest income is recognised in the income statement as it accrues,
using the effective interest rate method. The interest expense component of
finance lease payments is recognised in the income statement using
the effective interest rate method.
S) Income tax
The charge for current tax is based on the results for the year as
adjusted for items which are non-assessable or disallowed. It is calculated
using rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is accounted for using the liability method in respect
of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable profit. In
principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill (or
negative goodwill) or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction which
affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates, and
interest in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the rates that are expected to apply
when the asset or liability is settled. Deferred tax is charged or
credited in the income statement, except when it relates to items
credited or charged directly to equity, in which case the deferred tax
is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to
income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
T) Financial Risk Management
The Group uses a limited number of financial instruments, comprising
cash, short-term deposits, bank loans and facilities and various items
such as trade receivables and payables, which arise directly from operations.
The Group does not trade in financial instruments.
Financial risk factors
The Group's activities expose it to a variety of financial risks:
market risk (including currency risk and interest rate risk), credit
risk, liquidity risk and cash ?ow interest rate risk. The Group's
overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group's
financial performance.
i. Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Euro and
US dollar. Foreign exchange risk arises from future commercial transactions,
recognised assets and liabilities and net investments in foreign operations.
Foreign exchange risk arises when future commercial transactions or recognised
assets or liabilities are denominated in a currency that is not the Group's
functional currency.
ii. Credit risk
The Group has policies in place to ensure that sales are made to customers with
an appropriate credit history.
iii. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and available funding through an adequate amount of committed
credit facilities. The Group ensures it has adequate cover through
the availability of bank overdraft and loan facilities.
iv Cash flow and interest rate risk
The Group finances its operations through a mix of cash flow from current
operations, bank facilities and other borrowings. Borrowings are generally at
floating rates of interest and no use of interest rate swaps has been made.
1. Segmental reporting
Turnover and profit before tax are attributable to the one principal
activity of the Group, that of a full service advertising and marketing
agency. Turnover from this business originated in the markets shown
+-----------------------------------+------------+------------+
| | Group |
+-----------------------------------+-------------------------+
| | Year | Year |
| | ended | ended |
+-----------------------------------+------------+------------+
| | 30th | 30th |
| | June | June |
+-----------------------------------+------------+------------+
| | 2010 | 2009 |
+-----------------------------------+------------+------------+
| Turnover | GBP | GBP |
+-----------------------------------+------------+------------+
| United Kingdom | 24,971,149 | 30,432,248 |
+-----------------------------------+------------+------------+
| Rest of Europe | 147,776 | 1,367,705 |
+-----------------------------------+------------+------------+
| North America | 1,274,942 | 1,254,979 |
+-----------------------------------+------------+------------+
| Other | 64,358 | 332,920 |
+-----------------------------------+------------+------------+
| | | |
+-----------------------------------+------------+------------+
| | 26,458,225 | 33,387,852 |
+-----------------------------------+------------+------------+
| | | |
+-----------------------------------+------------+------------+
| | | |
+-----------------------------------+------------+------------+
2. Other operating income
+-----------------------------------+----------+----------+
| | Group |
+-----------------------------------+---------------------+
| | Year | Year |
| | ended | ended |
+-----------------------------------+----------+----------+
| | 30th | 30th |
| | June | June |
+-----------------------------------+----------+----------+
| | 2010 | 2009 |
+-----------------------------------+----------+----------+
| | GBP | GBP |
+-----------------------------------+----------+----------+
| | | |
+-----------------------------------+----------+----------+
| Rents receivable on leased | 6,513 | 8,700 |
| property | | |
+-----------------------------------+----------+----------+
| | | |
+-----------------------------------+----------+----------+
3. Operating costs
+-----------------------------+-----+-----------+-----------+
| | | Group |
+-----------------------------+-----+-----------------------+
| | | Year | Year |
| | | ended | ended |
+-----------------------------+-----+-----------+-----------+
| | | 30th | 30th |
| | | June | June |
+-----------------------------+-----+-----------+-----------+
| | | 2010 | 2009 |
+-----------------------------+-----+-----------+-----------+
| | | GBP | GBP |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Total staff costs (see note | | 3,270,106 | 3,965,687 |
| 5) | | | |
+-----------------------------+-----+-----------+-----------+
| Establishment costs | | 180,211 | 272,867 |
+-----------------------------+-----+-----------+-----------+
| Other operating costs (net) | | 698,356 | 1,129,010 |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Total operating costs | | 4,148,673 | 5,367,564 |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Other Operating costs | | | |
| include: | | | |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Loss on disposal of plant | | 17,085 | 2,873 |
| and equipment | | | |
+-----------------------------+-----+-----------+-----------+
| Release of provision for | | (33,659) | - |
| impairment | | | |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Operating lease rentals: | | | |
+-----------------------------+-----+-----------+-----------+
| Property | | 137,872 | 162,330 |
+-----------------------------+-----+-----------+-----------+
| Plant and equipment | | 36,294 | 29,828 |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
| Auditor's remuneration: | | | |
+-----------------------------+-----+-----------+-----------+
| Audit fees payable to | | 20,500 | 20,000 |
| Brebners | | | |
+-----------------------------+-----+-----------+-----------+
| Other services - tax and | | 5,708 | 15,605 |
| assurance | | | |
+-----------------------------+-----+-----------+-----------+
| | | | |
+-----------------------------+-----+-----------+-----------+
Exceptional items
The exceptional items comprise staff termination costs resulting from the loss
of a major client.
4. Directors' remuneration
The directors' remuneration for the year is set out below:-
+-------------+---------+---------+----------+---------+---------+
| | Basic |Company |Benefits | Total | Total |
| | Salary |Pension | | 2010 | 2009 |
| | and | | | | |
| | Fees | | | | |
+-------------+---------+---------+----------+---------+---------+
| | GBP | GBP | GBP | GBP | GBP |
+-------------+---------+---------+----------+---------+---------+
| Bob Morton | 20,500 | - | - | 20,500 | 35,000 |
+-------------+---------+---------+----------+---------+---------+
| Michael | 177,193 | - | 1,219 | 178,412 | 136,608 |
| Richards | | | | | |
+-------------+---------+---------+----------+---------+---------+
| Steve | 113,500 | 5,076 | 1,769 | 120,345 | 116,668 |
| Latter | | | | | |
+-------------+---------+---------+----------+---------+---------+
| Rodger | 36,949 | - | 1,769 | 38,718 | 51,664 |
| Braidwood | | | | | |
+-------------+---------+---------+----------+---------+---------+
| John Foley | 21,250 | - | - | 21,250 | 25,000 |
+-------------+---------+---------+----------+---------+---------+
| Rob Hamer | 21,250 | - | - | 21,250 | - |
+-------------+---------+---------+----------+---------+---------+
| Eddie | - | - | - | - | 151,661 |
| Powell | | | | | |
+-------------+---------+---------+----------+---------+---------+
| Bill Jones | - | - | - | - | 53,332 |
+-------------+---------+---------+----------+---------+---------+
| | | | | | |
+-------------+---------+---------+----------+---------+---------+
| | 390,642 | 5,076 | 4,757 | 400,475 | 569,929 |
+-------------+---------+---------+----------+---------+---------+
Additional disclosure relating to directors' remuneration:-
30th June 2010 30th June 2009
GBP GBP
Remuneration of highest paid director 177,193
135,666
Non executive directors' fees
79,449 76,664
Non executive chairman's fees
20,500 35,000
Number of directors accruing benefits under
defined contribution schemes
1 1
Compensation for director's loss of office
- 75,830
5. Personnel expenses
+-----------------------------------+-----------+-----------+
| | Group |
+-----------------------------------+-----------------------+
| | Year | Year |
| | ended | ended |
+-----------------------------------+-----------+-----------+
| | 30th | 30th |
| | June | June |
+-----------------------------------+-----------+-----------+
| | 2010 | 2009 |
+-----------------------------------+-----------+-----------+
| | GBP | GBP |
+-----------------------------------+-----------+-----------+
| | | |
+-----------------------------------+-----------+-----------+
| Wages and salaries | 2,724,136 | 3,477,968 |
+-----------------------------------+-----------+-----------+
| Compulsory social securities | 276,285 | 335,869 |
+-----------------------------------+-----------+-----------+
| Contributions to defined | 29,001 | 8,731 |
| contribution plans | | |
+-----------------------------------+-----------+-----------+
| Share option charge | 7,600 | 14,100 |
+-----------------------------------+-----------+-----------+
| Staff training, recruitment, | 107,495 | 126,144 |
| welfare | | |
+-----------------------------------+-----------+-----------+
| Redundancy costs | 125,589 | 2,875 |
+-----------------------------------+-----------+-----------+
| | | |
+-----------------------------------+-----------+-----------+
| | 3,270,106 | 3,965,687 |
+-----------------------------------+-----------+-----------+
| | | |
+-----------------------------------+-----------+-----------+
6. Our people
Our staff numbers averaged 64 in the year against 85 in 2009, as follows:
+--+----------------------------------+------------+-+-----------+
| | | Group |
+--+----------------------------------+--------------------------+
| | |Year ended | Year ended |
+--+----------------------------------+------------+-------------+
| | | 30th June | 30th June |
+--+----------------------------------+------------+-------------+
| | | 2010 | 2009 |
+--+----------------------------------+------------+-------------+
| | | No. | No. |
+--+----------------------------------+------------+-------------+
| | | | |
+--+----------------------------------+------------+-------------+
| Account handlers | 17 | 20 |
+-------------------------------------+------------+-------------+
| Media | 13 | 23 |
+-------------------------------------+------------+-------------+
| Creative and digital | 12 | 14 |
+-------------------------------------+------------+-------------+
| Production and studio | 11 | 15 |
+-------------------------------------+------------+-------------+
| IT | 1 | 1 |
+-------------------------------------+------------+-------------+
| Administration and accounts | 6 | 9 |
+-------------------------------------+------------+-------------+
| Non-executive directors | 4 | 3 |
+-------------------------------------+------------+-------------+
| | | |
+-------------------------------------+--------------+-----------+
| | | 64 | 85 |
+--+----------------------------------+------------+-------------+
| | | | | |
+--+----------------------------------+------------+-+-----------+
7. Net finance cost
+------+-----------------------------------+----------+------------+
| | | Group |
+------+-----------------------------------+-----------------------+
| | | Year |Year ended |
| | | ended | |
+------+-----------------------------------+----------+------------+
| | | 30th | 30th June |
| | | June | |
+------+-----------------------------------+----------+------------+
| | | 2010 | 2009 |
+------+-----------------------------------+----------+------------+
| | | GBP | GBP |
+------+-----------------------------------+----------+------------+
| | | | |
+------+-----------------------------------+----------+------------+
| Bank interest receivable | - | 14,878 |
+------------------------------------------+----------+------------+
| | | |
+------------------------------------------+----------+------------+
| Bank interest payable |(43,780) | (140,925) |
+------------------------------------------+----------+------------+
| | | |
+------------------------------------------+----------+------------+
| Net finance cost |(43,780) | (126,047) |
+------------------------------------------+----------+------------+
| | | | |
+------+-----------------------------------+----------+------------+
8 Income tax charge
8.1 Current Income Tax
+------------------------------------+---------+------------------+
| | Group |
+------------------------------------+----------------------------+
| | Year | Year |
| | ended | ended |
+------------------------------------+---------+------------------+
| | 30th | 30th |
| | June | June |
+------------------------------------+---------+------------------+
| | 2010 | 2009 |
+------------------------------------+---------+------------------+
| | GBP | GBP |
+------------------------------------+---------+------------------+
| | | |
+------------------------------------+---------+------------------+
| Current year | 75,895 | 49,477 |
+------------------------------------+---------+------------------+
| (Over) / under provision in prior | (1,620) | 7,542 |
| year | | |
+------------------------------------+---------+------------------+
| | | |
+------------------------------------+---------+------------------+
| Taxation attributable to the | 74,275 | 57,019 |
| company and its subsidiary | | |
+------------------------------------+---------+------------------+
| | | |
+------------------------------------+---------+------------------+
| Deferred tax charge | 93,401 | 71,104 |
+------------------------------------+---------+------------------+
| | | |
+------------------------------------+---------+------------------+
| Tax charge for the year | 167,676 | 128,123 |
+------------------------------------+---------+------------------+
The deferred tax credit arises in respect of timing differences
relating to trading losses utilised in the year and capital allowances.
8.2 Factors affecting current tax changes
The tax assessed on the profit on ordinary activities for the year
is lower than the standard rate of corporation tax in the UK of 28% (2009:
28%).
+------------------------------------+----------+----------+----------+
| | Group |
+------------------------------------+--------------------------------+
| | 2010 | 2009 | |
+------------------------------------+----------+----------+----------+
| | GBP | GBP | |
+------------------------------------+----------+----------+----------+
| Profit on ordinary activities | 677,149 | 477,649 | |
| before taxation | | | |
+------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------+----------+----------+----------+
| Profit on ordinary activities | 189,602 | 133,742 | |
| multiplied by the standard rate of | | | |
| corporation tax | | | |
+------------------------------------+----------+----------+----------+
| Expenses disallowable for tax | (6,110) | (23,496) | |
| purposes | | | |
+------------------------------------+----------+----------+----------+
| Capital allowances in excess of | 267 | (3,478) | |
| depreciation | | | |
+------------------------------------+----------+----------+----------+
| Utilisation of brought forward | (99,783) | (81,838) | |
| losses | | | |
+------------------------------------+----------+----------+----------+
| Tax losses carried forward | - | 25,908 | |
+------------------------------------+----------+----------+----------+
| Non-trade relief | (193) | (154) | |
+------------------------------------+----------+----------+----------+
| Marginal relief | (7,888) | (1,207) | |
+------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------+----------+----------+----------+
| Total current tax (see note 8.1) | 75,895 | 49,477 | |
+------------------------------------+----------+----------+----------+
| | | | |
+------------------------------------+----------+----------+----------+
8.3 Factors affecting future tax charges
As at 30th June 2010 the group had trading losses to carry forward amounting to
GBP1,430,838 (2009: GBP1,879,733).
9. Property, plant and equipment
+------------------+--------------+-----------+----------+-----------+-----------+
| | |
+------------------+-------------------------------------------------------------+
| Group | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | |Fixtures | | |
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | Leasehold | Freehold | and | Plant | |
| | | | | and | |
+------------------+--------------+-----------+----------+-----------+-----------+
| |Improvements | Property |Fittings |Equipment | Total |
+------------------+--------------+-----------+----------+-----------+-----------+
| | GBP | GBP | GBP | GBP | GBP |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Cost or | | | | | |
| valuation | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 1st July | 13,008 | 173,795 | 40,977 | 267,883 | 495,663 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Additions | 59,582 | - | 34,484 | 22,305 | 116,371 |
+------------------+--------------+-----------+----------+-----------+-----------+
| Disposals | (13,008) | - | (30,561) | (116,114) | (159,683) |
+------------------+--------------+-----------+----------+-----------+-----------+
| Reversal for | | | | | |
| provision for | - | 16,205 | - | - | 16,205 |
| impairment | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Reclassification | - | (190,000) | - | - | (190,000) |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | 59,582 | - | 44,900 | 174,074 | 278,556 |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Accumulated | | | | | |
| depreciation | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 1st July | 976 | 17,451 | 20,754 | 165,347 | 204,528 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Depreciation | 6,334 | - | 12,219 | 72,007 | 90,560 |
| charge for the | | | | | |
| year | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Eliminated on | (1,518) | - | (24,966) | (116,114) | (142,598) |
| disposals | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Reversal of | | | | | |
| provision for | - | (17,451) | - | - | (17,451) |
| impairment | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | 5,792 | - | 8,008 | 121,239 | 135,039 |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Net Book Value | | | | | |
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | 53,790 | - | 36,892 | 52,835 | 143,517 |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | 12,032 | 156,344 | 20,223 | 102,536 | 291,135 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Company | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | Freehold | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | Property | Total |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | GBP | GBP |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Cost or | | | | | |
| valuation | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 1st July | | | | 173,795 | 173,795 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Reversal of provision for | | | 16,205 | 16,205 |
| impairment | | | | |
+---------------------------------+-----------+----------+-----------+-----------+
| | | | | (190,000) | (190,000) |
| Reclassification | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | | | | - | - |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Accumulated | | | | | |
| depreciation | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 1st July | | | | 17,451 | 17,451 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Reversal of provision for | | | (17,451) | (17,451) |
| impairment | | | | |
+---------------------------------+-----------+----------+-----------+-----------+
| At 30th June | | | | - | - |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| Net Book Value | | | | | |
| | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | | | | - | - |
| 2010 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
| At 30th June | | | | 156,341 | 156,341 |
| 2009 | | | | | |
+------------------+--------------+-----------+----------+-----------+-----------+
9. Property, plant and equipment - continued
Company - continued
During the year a freehold property that does not form a key component of the
Group's operations was made available for sale. In accordance with IFRS the
property was reclassified as a current financial asset and stated at its market
value. A previous impairment loss of GBP33,659 was reversed in the current year
and shown within administrative expenses. A sale is anticipated within 12
months.
10. Goodwill and investments
+--------------------------------+--------+--------+---------------+
| | | | |
| | | | Shares |
| | | | in |
| | | | Subsidiary |
| | | | GBP |
+--------------------------------+--------+--------+---------------+
| Company | | | |
+--------------------------------+--------+--------+---------------+
| At 1st July 2009 and 30th June | | | 10,100,509 |
| 2010 | | | |
+--------------------------------+--------+--------+---------------+
| | | | |
+--------------------------------+--------+--------+---------------+
| | | | |
+--------------------------------+--------+--------+---------------+
| | | | Goodwill |
| | | | on |
| | | |Consolidation |
| | | | GBP |
+--------------------------------+--------+--------+---------------+
| Group | | | |
+--------------------------------+--------+--------+---------------+
| At 1st July 2009 and 30th June | | | 8,497,907 |
| 2010 | | | |
+--------------------------------+--------+--------+---------------+
| | | | |
+--------------------------------+--------+--------+---------------+
Subsidiary
The Group consolidates the results of the entities which are under its control.
The significant entity which is included in the consolidated accounts is as
follows:
+---------------------------+--------------+--------+--------+---------------+
| | | % | % | Country |
| | Business |Shares |voting | |
| | Activity | Owned | power | of |
| | | | held |incorporation |
+---------------------------+--------------+--------+--------+---------------+
| | | | | |
+---------------------------+--------------+--------+--------+---------------+
| WFCA Integrated Limited | Advertising | 100% | 100% | England |
| | agency | | | & Wales |
+---------------------------+--------------+--------+--------+---------------+
Discontinued Operations
The credit to the profit and loss account in the current year represents the
release of a provision for costs made in the previous year, no longer required,
in respect of previously owned subsidiaries.
11. Other financial assets
+----------------------+-----------+-----------+---------+---------+
| | Group | Company |
+----------------------+-----------------------+-------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+----------------------+-----------+-----------+---------+---------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+----------------------+-----------+-----------+---------+---------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------+-----------+-----------+---------+---------+
| | GBP | GBP | GBP | GBP |
+----------------------+-----------+-----------+---------+---------+
| | | | | |
+----------------------+-----------+-----------+---------+---------+
| Trade receivables |2,022,937 | 2,819,453 | 845,351 | 518,748 |
+----------------------+-----------+-----------+---------+---------+
| | | | | |
+----------------------+-----------+-----------+---------+---------+
| Other receivables: | | | | |
+----------------------+-----------+-----------+---------+---------+
| Inventories - work | 33,042 | 93,630 | - | - |
| in progress | | | | |
+----------------------+-----------+-----------+---------+---------+
| Other debtors | 163,110 | 61,551 | 1,667 | - |
+----------------------+-----------+-----------+---------+---------+
| Prepayments and | 198,898 | 188,042 | - | |
| accrued income | | | | 46,433 |
+----------------------+-----------+-----------+---------+---------+
| | | | | |
+----------------------+-----------+-----------+---------+---------+
| | 2,417,987 | 3,162,676 | 847,018 | 565,181 |
+----------------------+-----------+-----------+---------+---------+
| | | | | |
+----------------------+-----------+-----------+---------+---------+
The movement in the deferred taxation account during the year was:
+----------------------+-----------+----------+-----------+---------+
| | Group | Company |
+----------------------+----------------------+---------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+----------------------+-----------+----------+-----------+---------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+----------------------+-----------+----------+-----------+---------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------+-----------+----------+-----------+---------+
| | GBP | GBP | GBP | GBP |
+----------------------+-----------+----------+-----------+---------+
| | | | | |
+----------------------+-----------+----------+-----------+---------+
| At 1St July 2009 | 534,907 | 623,039 | 541,764 | 514,516 |
+----------------------+-----------+----------+-----------+---------+
| Profit and loss | (119,309) | (71,104) | (121,048) | 27,248 |
| account movement | | | | |
| arising during the | | | | |
| year | | | | |
+----------------------+-----------+----------+-----------+---------+
| Discontinued | - | (17,028) | - | - |
| operations | | | | |
+----------------------+-----------+----------+-----------+---------+
| | | | | |
+----------------------+-----------+----------+-----------+---------+
| At 30th June 2010 | 415,598 | 534,907 | 420,716 | 541,764 |
+----------------------+-----------+----------+-----------+---------+
| | | | | |
+----------------------+-----------+----------+-----------+---------+
| Shown as non-current | 420,716 | 541,764 | 420,716 | 541,764 |
| asset | | | | |
+----------------------+-----------+----------+-----------+---------+
| Shown as current | (5,118) | (6,857) | - | - |
| liability | | | | |
+----------------------+-----------+----------+-----------+---------+
The balance of the deferred taxation account consists of the tax
effect of timing differences in respect of:
+----------------------+---------+---------+---------+---------+
| | Group | Company |
+----------------------+-------------------+-------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+----------------------+---------+---------+---------+---------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+----------------------+---------+---------+---------+---------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------+---------+---------+---------+---------+
| | GBP | GBP | GBP | GBP |
+----------------------+---------+---------+---------+---------+
| | | | | |
+----------------------+---------+---------+---------+---------+
| Excess of | 14,964 | 8,582 | 20,082 | 15,439 |
| depreciation over | | | | |
| taxation allowances | | | | |
+----------------------+---------+---------+---------+---------+
| Tax losses available | 400,634 | 526,325 | 400,634 | 526,325 |
| | | | | |
+----------------------+---------+---------+---------+---------+
| | 415,598 | 534,907 | 420,716 | 541,764 |
+----------------------+---------+---------+---------+---------+
12. Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits held
by the Group treasury function. The carrying amount of these assets
approximates to their fair value.
13. Other financial assets
Credit risk
The Group's credit risk is primarily attributable to its trade receivables. The
amounts presented in the balance sheet are net of any allowances for doubtful
receivables, estimated by the Group's management on prior experience, current
information and the current economic environment.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit ratings assigned by
international credit-rating agencies.
14. Share capital
+----------------------+-----------+-----------+-------------+-------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+----------------------+-----------+-----------+-------------+-------------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+----------------------+-----------+-----------+-------------+-------------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------+-----------+-----------+-------------+-------------+
| | GBP | GBP | No. | No. |
+----------------------+-----------+-----------+-------------+-------------+
| | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Authorised: | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Ordinary shares of | 5,000,000 | 5,000,000 | 500,000,000 | 500,000,000 |
| 1p each | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Issued and fully | | | | |
| paid: | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Ordinary shares of | | | | |
| 1p each | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| At 1st July 2009 | 2,657,809 | 1,568,088 | 265,780,908 | 156,808,717 |
+----------------------+-----------+-----------+-------------+-------------+
| Placing | - | 441,000 | - | 44,100,000 |
+----------------------+-----------+-----------+-------------+-------------+
| Allotment to loan | - | 644,333 | - | 64,433,333 |
| note holders | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Share options | 777 | 4,388 | 77,700 | 438,858 |
| exercised | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| Other allotment in | 26,074 | - | 2,607,400 | - |
| year | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| | | | | |
+----------------------+-----------+-----------+-------------+-------------+
| At 30th June 2010 | 2,684,660 | 2,657,809 | 268,466,008 | 265,780,908 |
+----------------------+-----------+-----------+-------------+-------------+
During the year 77,700 ordinary shares of 1p each were allotted and issued at
2.14p per share in connection with the exercise of share options. A further
2,607,400 ordinary shares of 1p each were allotted and issued at 3p per share to
provide working capital.
Share options
At 30th June 2010, options over 22,350,000 ordinary shares under the WFCA
Enterprise Management Incentive (EMI) Plan and unapproved options were
outstanding.
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | At | | | | At | | | |
| | 30th | | | | 30th | Exercise | Exercise | Expiry |
| | June | Granted | Exercised | Lapsed | June | Price | Date | Date |
| | 2009 | | | | 2010 | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | | | | | | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | | | | | | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options1 | 77,700 | - | (77,700) | - | - | 2.14p | 3rd | 2nd |
| | | | | | | | Oct | Oct |
| | | | | | | | 2006 | 2015 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options2 | 3,700,000 | - | - | (3,700,000) | - | 6p | 5th | 4th |
| | | | | | | | Apr | Apr |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | 1,000,000 | - | - | (1,000,000) | - | 6p | 1st | 30th |
| 3 | | | | | | | Jul | Jun |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Un-approved | 850,000 | - | | (850,000) | - | 6p | 5th | 4th |
| | | | - | | | | Apr | Apr |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | - | 2,600,000 | - | (600,000) | 2,000,000 | 2p | 5th | 4th |
| 4 | | | | | | | Apr | Apr |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Un-approved | - | 850,000 | - | - | 850,000 | 2p | 5th | 4th |
| | | | | | | | Apr | Apr |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | - | 1,000,000 | - | - | 1,000,000 | 2p | 1st | 30th |
| 5 | | | | | | | Jul | Jun |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | - | 10,400,000 | - | (2,150,000) | 8,250,000 | 2p | 26th | 25th |
| 6 | | | | | | | Jul | Jul |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Un-approved | - | 1,000,000 | - | - | 1,000,000 | 2p | 26th | 25th |
| | | | | | | | Jul | Jul |
| | | | | | | | 2010 | 2018 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | - | 2,000,000 | - | - | 2,000,000 | 2p | 30th | 29th |
| 7 | | | | | | | Sep | Sep |
| | | | | | | | 2011 | 2019 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| Options | - | 7,250,000 | - | - | 7,250,000 | 2p | 31st | 30th |
| 8 | | | | | | | Mar | Mar |
| | | | | | | | 2012 | 2020 |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | | | | | | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | 5,627,700 | 25,100,000 | (77,700) | (8,300,000) | 22,350,000 | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
| | | | | | | | | |
+-------------+-------------+---------------------------+-----------+----------------+------------+----------+----------+--------+
15. Earnings per share
+-----------------------------------+-------------+-------------+
| | Group |
+-----------------------------------+---------------------------+
| | Year | Year |
| | ended | ended |
+-----------------------------------+-------------+-------------+
| | 30th | 30th |
| | June | June |
+-----------------------------------+-------------+-------------+
| | 2010 | 2009 |
+-----------------------------------+-------------+-------------+
| | GBP | GBP |
+-----------------------------------+-------------+-------------+
| Basic EPS | | |
+-----------------------------------+-------------+-------------+
| Reported earnings (GBP) | 555,999 | 614,619 |
+-----------------------------------+-------------+-------------+
| Reported EPS | 0.21p | 0.37p |
+-----------------------------------+-------------+-------------+
| | | |
+-----------------------------------+-------------+-------------+
| Diluted EPS | | |
+-----------------------------------+-------------+-------------+
| Diluted reported earnings (GBP) | 555,999 | 614,619 |
+-----------------------------------+-------------+-------------+
| Reported diluted EPS | 0.19p | 0.36p |
+-----------------------------------+-------------+-------------+
| | | |
+-----------------------------------+-------------+-------------+
| | No. | No. |
+-----------------------------------+-------------+-------------+
| Weighted average number of | | |
| ordinary shares | | |
+-----------------------------------+-------------+-------------+
| Issued ordinary shares at 1st | 265,780,908 | 156,808,717 |
| July 2009 | | |
+-----------------------------------+-------------+-------------+
| Effect of shares issued during | 705,625 | 7,936,927 |
| the year | | |
+-----------------------------------+-------------+-------------+
| Weighted average number of shares | 266,486,533 | 164,745,644 |
| for basic EPS | | |
+-----------------------------------+-------------+-------------+
| | | |
+-----------------------------------+-------------+-------------+
| Weighted average number of | | |
| ordinary shares | | |
+-----------------------------------+-------------+-------------+
| Dilutive share options 1 | - | 77,700 |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Dilutive share options 2 | - | 3,700,000 |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Dilutive share options 3 | - | 1,000,000 |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Unapproved | - | 850,000 |
+-----------------------------------+-------------+-------------+
| Dilutive share options 4 | 2,000,000 | - |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Un-approved | 850,000 | - |
+-----------------------------------+-------------+-------------+
| Dilutive share options 5 | 1,000,000 | - |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Dilutive share options 6 | 8,250,000 | - |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Un-approved | 1,000,000 | - |
+-----------------------------------+-------------+-------------+
| Dilutive share options 7 | 2,000,000 | - |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Dilutive share options 8 | 7,250,000 | - |
| outstanding | | |
+-----------------------------------+-------------+-------------+
| Weighted average number of shares | 288,836,533 | 170,373,344 |
| for diluted EPS | | |
+-----------------------------------+-------------+-------------+
16. Share-based payment
During the period ending 30th June 2010 the Company had share-based
payment arrangements settled in equities in operation, as described below.
Employee Share Options
Options over shares in the holding company are awarded to eligible
employees and directors of WFCA plc.
The options exercise period commences on the second anniversary of
the date of the grant of the option and ends on the day which is the day
before the tenth such anniversary. Exceptionally and subject to the
discretion of the board options may be exercised earlier than two years
following grant on the cessation of the option holder's employment.
The estimated fair value of each option granted in the EMI share option plan was
calculated by applying the Black-Scholes option pricing model. All options
issued prior to 1st July 2009 have lapsed. The assumptions used in the
calculation are as follows:
+-------------+--------+--------+--------+--------+--------+
| Grant | 1st | 1st | 27th | 27th | 27th |
| date | Apr | Oct | Jul | Jul | Jul |
| | 2010 | 2009 | 2009 | 2009 | 2009 |
+-------------+--------+--------+--------+--------+--------+
| Notional | 1.75p | 1.75p | 1.75p | 1.75p | 1.75p |
| share | | | | | |
| price | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Exercise | 2.0p | 2.0p | 2.0p | 2.0p | 2.0p |
| price | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Shares | 7.25m | 2m | 10.4m | 1m | 3.45m |
| under | | | | | |
| option | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Expected | 20% | 20% | 20% | 20% | 20% |
| volatility | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Expected | - | - | - | - | - |
| dividend | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Contractual | 2yrs | 2yrs | 2yrs |12mths | 8mths |
| life | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Risk | 5% | 5% | 5% | 5% | 5% |
| free | | | | | |
| rate | | | | | |
+-------------+--------+--------+--------+--------+--------+
| Estimated | 0.17p | 0.17p | 0.17p | 0.17p | 0.17p |
| fair | | | | | |
| value | | | | | |
+-------------+--------+--------+--------+--------+--------+
+--------------------+-------------+----------+-------------+----------+
| | Year ending 30th | Year ending 30th |
| | June 2010 | June 2009 |
| | | |
+--------------------+------------------------+------------------------+
| | |Weighted | |Weighted |
| | | average | | average |
| | Number |exercise | Number |exercise |
| | of | price | of | price |
| | Options | (pence) | Options | (pence) |
+--------------------+-------------+----------+-------------+----------+
| | | | | |
+--------------------+-------------+----------+-------------+----------+
| Outstanding at 1st | 5,627,700 | 5.9p | 6,233,450 | 5.6p |
| July 2009 | | | | |
+--------------------+-------------+----------+-------------+----------+
| Granted during | 25,100,000 | 2p | 1,000,000 | 6.0p |
| year | | | | |
+--------------------+-------------+----------+-------------+----------+
| Forfeited | (8,300,000) | 4.7p | (1,166,900) | 5.8p |
+--------------------+-------------+----------+-------------+----------+
| Exercised | (77,700) | 2.1p | (438,850) | 2.1p |
+--------------------+-------------+----------+-------------+----------+
| | | | | |
+--------------------+-------------+----------+-------------+----------+
| Outstanding at | 22,350,000 | 2p | 5,627,700 | 5.9p |
| 30th June 2010 | | | | |
+--------------------+-------------+----------+-------------+----------+
| | | | | |
+--------------------+-------------+----------+-------------+----------+
| Exercisable at | 2,850,000 | 2p | 77,700 | 2.1p |
| 30th June 2010 | | | | |
+--------------------+-------------+----------+-------------+----------+
| | | | | |
+--------------------+-------------+----------+-------------+----------+
The amounts charged to the Income Statement in the year in respect of share
based payments were GBP7,600 (2009: GBP14,100).
17. Share Premium
+---------------------------------+------------+------------+
| | |
+---------------------------------+-------------------------+
| |Year ended |Year ended |
+---------------------------------+------------+------------+
| | 30th June | 30th June |
+---------------------------------+------------+------------+
| | 2010 | 2009 |
+---------------------------------+------------+------------+
| | GBP | GBP |
+---------------------------------+------------+------------+
| | | |
+---------------------------------+------------+------------+
| Balance at 1st July 2009 | 1,383,648 | - |
+---------------------------------+------------+------------+
| Arising on issue of share | 53,036 | 1,479,667 |
| capital | | |
+---------------------------------+------------+------------+
| Arising on equity share options | - | 5,015 |
| issued | | |
+---------------------------------+------------+------------+
| Issue costs | (2,286) | (101,034) |
+---------------------------------+------------+------------+
| | | |
+---------------------------------+------------+------------+
| Balance at 30th June 2010 | 1,434,398 | 1,383,648 |
+---------------------------------+------------+------------+
18. Special Reserve
+---------------------+--------+-------------+--------+-------------+
| | Group | Company |
+---------------------+----------------------+----------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+---------------------+--------+-------------+--------+-------------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+---------------------+--------+-------------+--------+-------------+
| | 2010 | 2009 | 2010 | 2009 |
+---------------------+--------+-------------+--------+-------------+
| | GBP | GBP | GBP | GBP |
+---------------------+--------+-------------+--------+-------------+
| | | | | |
+---------------------+--------+-------------+--------+-------------+
| Balance at 1st July | - | 6,499,126 | - | 6,499,126 |
| 2009 | | | | |
+---------------------+--------+-------------+--------+-------------+
| Transfer to | - | (6,499,126) | - | (6,499,126) |
| retained earnings | | | | |
+---------------------+--------+-------------+--------+-------------+
| | | | | |
+---------------------+--------+-------------+--------+-------------+
| Balance at 30th | - | - | - | - |
| June 2010 | | | | |
+---------------------+--------+-------------+--------+-------------+
19. Retained earnings
+---------------------+-----------+-------------+-----------+-------------+
| | Group | Company |
+---------------------+-------------------------+-------------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+---------------------+-----------+-------------+-----------+-------------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+---------------------+-----------+-------------+-----------+-------------+
| | 2010 | 2009 | 2010 | 2009 |
+---------------------+-----------+-------------+-----------+-------------+
| | GBP | GBP | GBP | GBP |
+---------------------+-----------+-------------+-----------+-------------+
| | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| Balance at 1st July | 3,076,760 | (4,051,085) | 2,627,316 | (3,464,752) |
| 2009 | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| Net Profit / (Loss) | 555,999 | 614,619 | 307,974 | (421,158) |
| for the year | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| Charge on share | 7,600 | 14,100 | 7,600 | 14,100 |
| options | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| Transfer from | - | 6,499,126 | - | 6,499,126 |
| special reserve | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| Balance at 30th | 3,640,359 | 3,076,760 | 2,942,890 | 2,627,316 |
| June 2010 | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| | | | | |
+---------------------+-----------+-------------+-----------+-------------+
| | | | | |
+---------------------+-----------+-------------+-----------+-------------+
20. Trade and other payables
Trade and other payables principally comprise amounts outstanding
for purchases and ongoing costs.
The directors consider that the carrying amount of trade payables
approximates to their fair value.
+----------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+----------------------+-----------------------+-----------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+----------------------+-----------+-----------+-----------+-----------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+----------------------+-----------+-----------+-----------+-----------+
| | 2010 | 2009 | 2010 | 2009 |
+----------------------+-----------+-----------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+----------------------+-----------+-----------+-----------+-----------+
| | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| Trade payables | 1,161,916 | 2,500,412 | 16,477 | 39,264 |
+----------------------+-----------+-----------+-----------+-----------+
| | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| Other payables: | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| Bank overdraft and | 305,666 | 720,697 | 148,219 | 180,947 |
| similar facilities | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| Bank loan | 50,000 | - | - | - |
+----------------------+-----------+-----------+-----------+-----------+
| Social security and | 233,079 | 490,693 | 1,563 | 54,318 |
| other taxes | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| Deferred taxation | 5,118 | 6,857 | - | - |
+----------------------+-----------+-----------+-----------+-----------+
| Other payables | - | - | 4,308,174 | 4,174,554 |
+----------------------+-----------+-----------+-----------+-----------+
| Accruals and | 1,438,163 | 1,495,670 | 14,627 | 142,912 |
| deferred income | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| | | | | |
+----------------------+-----------+-----------+-----------+-----------+
| | 3,193,942 | 5,214,329 | 4,489,060 | 4,591,995 |
+----------------------+-----------+-----------+-----------+-----------+
| | | | | |
+----------------------+-----------+-----------+-----------+-----------+
The bank loans, overdraft and similar facilities are secured on a group basis by
a fixed charge over the trade receivables shown in note 11 and by fixed and
floating charges over the trade, assets and undertakings of the Group.
21. Financial Instruments
The Group's financial instruments comprise cash, bank borrowings and various
items, such as trade receivables and trade payables that arise directly from its
operations.
The main purpose of these financial instruments is to raise finance for the
Group's operations.
The principal financial risks to which the Group is exposed relate to foreign
exchange risk, credit risk and liquidity risk as well as cash flow and interest
rate risk (as disclosed under accounting policies).
The bank loans, overdraft and similar facilities are secured on a group basis by
a fixed charge over the trade receivables shown in note 11 and by fixed and
floating charges over the trade, assets and undertakings of the Group.
Group
+----------------------------+-----------+---------+---------+-----------+
| | Due | Due | Due | |
| | within |between |between | |
| | 1 year |1 and 2 |2 and 5 | |
| | | years | years | |
+----------------------------+-----------+---------+---------+-----------+
| | | | | Total |
+----------------------------+-----------+---------+---------+-----------+
| | GBP | GBP | GBP | GBP |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| Bank overdraft and similar | 305,666 | - | - | 305,666 |
| facilities | | | | |
+----------------------------+-----------+---------+---------+-----------+
| Bank loans | 50,000 | 50,000 | 650,000 | 750,000 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| | 355,666 | 50,000 | 650,000 | 1,055,666 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| Trade and other payables | 2,838,276 | - | - | 2,838,276 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| | 3,193,942 | 50,000 | 650,000 | 3,893,942 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
Company
+----------------------------+-----------+---------+---------+-----------+
| | Due | Due | Due | |
| | within |between |between | |
| | 1 year |1 and 2 |2 and 5 | |
| | | years | years | |
+----------------------------+-----------+---------+---------+-----------+
| | | | | Total |
+----------------------------+-----------+---------+---------+-----------+
| | GBP | GBP | GBP | GBP |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| Bank overdraft and similar | 148,219 | - | - | 148,219 |
| facilities | | | | |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| | 148,219 | - | - | 148,219 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| Trade and other payables | 4,340,841 | - | - | 4,340,841 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
| | 4,489,060 | - | - | 4,489,060 |
+----------------------------+-----------+---------+---------+-----------+
| | | | | |
+----------------------------+-----------+---------+---------+-----------+
22. Operating lease commitments
+----------------------------------+------------+------------+
| |Year ended |Year ended |
+----------------------------------+------------+------------+
| | 30th June | 30th June |
+----------------------------------+------------+------------+
| | 2010 | 2009 |
+----------------------------------+------------+------------+
| | GBP | GBP |
+----------------------------------+------------+------------+
| | | |
+----------------------------------+------------+------------+
| Minimum total future lease | 859,787 | 1,051,235 |
| payments under operating leases | | |
+----------------------------------+------------+------------+
| Amounts paid in the year to 30th | 174,166 | 192,158 |
| June 2010 | | |
+----------------------------------+------------+------------+
The minimum total future lease payments under operating leases fall
due as follows:
+----------------------------------+------------+------------+
| | At 30th | At 30th |
| | June | June |
+----------------------------------+------------+------------+
| | 2010 | 2009 |
+----------------------------------+------------+------------+
| | GBP | GBP |
+----------------------------------+------------+------------+
| | | |
+----------------------------------+------------+------------+
| In the next year | 129,384 | 113,593 |
+----------------------------------+------------+------------+
| In the second to fifth years | 730,403 | 937,642 |
| inclusive | | |
+----------------------------------+------------+------------+
| | | |
+----------------------------------+------------+------------+
| | 859,787 | 1,051,235 |
+----------------------------------+------------+------------+
23. Related party transactions
During the year GBP16,949 (2009: GBP26,668) was paid to Mr. R
Braidwood (Director) for consultancy services.
During the year GBP20,500 (2009: GBP35,000) was paid to Hawk Consulting Limited,
a company in which Mr. B Morton (Non executive Chairman) is deemed to have an
interest.
Within "other payables" relating to the company are amounts due from WFCA
Integrated Limited amounting to GBP4,308,174 (2009: GBP4,174,554).
During the year WFCA PLC was reimbursed by the subsidiary undertaking an amount
of GBP360,000 (2009; GBP470,000) in respect of recharged expenditure.
All intra group transactions have been eliminated on consolidation.
No entity is in a position of control or ultimate control of the
company.
24. Provision for other liabilities and charges
+--------------------------+-----------+-----------+-----------+-----------+
| | Group | Company |
+--------------------------+-----------------------+-----------------------+
| | Year | Year | Year | Year |
| | ended | ended | ended | ended |
+--------------------------+-----------+-----------+-----------+-----------+
| | 30th | 30th | 30th | 30th |
| | June | June | June | June |
+--------------------------+-----------+-----------+-----------+-----------+
| | 2010 | 2009 | 2010 | 2009 |
+--------------------------+-----------+-----------+-----------+-----------+
| | GBP | GBP | GBP | GBP |
+--------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| At 1st July 2009 | 192,376 | 302,202 | 111,780 | 154,012 |
+--------------------------+-----------+-----------+-----------+-----------+
| Provision made during | - | 125,000 | - | 95,000 |
| the year | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| Utilised | (145,782) | (234,826) | (102,186) | (137,232) |
+--------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+--------------------------+-----------+-----------+-----------+-----------+
| At 30th June 2010 | 46,594 | 192,376 | 9,594 | 111,780 |
+--------------------------+-----------+-----------+-----------+-----------+
The provision comprises restructuring and reorganisation costs
together with provisions for onerous leases.
25. Accounting estimates and judgements
Management has discussed with the Audit Committee the development, selection and
disclosure of the Group's critical accounting policies and estimates and the
application of these policies and estimates.
26. Parent company Profit and Loss Account
As permitted by Section 408 of the Companies Act 2006, the profit and loss
account of the parent Company is not presented as part of these financial
statements. The parent Company's profit for the financial year amounted to
GBP302,402.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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