TIDMIOM
RNS Number : 0232R
Iomart Group PLC
06 December 2016
6 December 2016
iomart Group plc
("iomart" or the "Group" or the "Company")
Half Yearly Results
iomart (AIM:IOM), the cloud computing company, is pleased to
report its consolidated half yearly results for the period ended 30
September 2016.
FINANCIAL HIGHLIGHTS
-- Revenue growth of 16% to GBP42.1m (H1 2016: GBP36.4m)
o Cloud Services organic growth of 10% (H1 2016: 10%)
-- Adjusted EBITDA(1) growth of 13% to GBP17.6m (H1 2016: GBP15.5m)
-- Adjusted profit before tax(2) growth of 23% to GBP10.6m (H1 2016: GBP8.7m)
-- Adjusted diluted earnings per share(3) from operations
increased by 19% to 8.03p (H1 2016: 6.75p)
-- Cashflow from operations increased by 22% to GBP16.7m (H1 2016: GBP13.6m)
-- Operating cash conversion rate increased to 95% of adjusted EBITDA (H1 2016: 88%)
OPERATIONAL HIGHLIGHTS
-- Ongoing investment in all forms of cloud skills
-- Continuing to develop relationships with major Public Cloud
suppliers leading to growth in Public Cloud revenues
-- Consultancy division, SystemsUp, gains AWS Public Sector Partner for Government status
Statutory Equivalents
The above highlights are based on adjusted results. A full
reconciliation between adjusted and statutory results is contained
within this statement. The statutory equivalents of the above
results are as follows:
-- Profit before tax growth of 26% to GBP7.1m (H1 2016: GBP5.7m)
-- Basic earnings per share from operations increased by 19% to 5.43p (H1 2016: 4.57p)
Angus MacSween, CEO commented,
"Trading in the first half of the year has been very good and we
remain focussed on building our recurring revenues in line with our
business model. We are uncovering an increasing breadth of
opportunities to constantly grow that recurring revenue and remain
confident in our future prospects."
(1) Throughout this statement adjusted EBITDA is earnings before
interest, tax, depreciation and amortisation (EBITDA) before share
based payment charges and acquisition costs. Throughout this
statement acquisition costs are defined as acquisition related
costs and non-recurring acquisition integration costs.
(2) Throughout this statement adjusted profit before tax is
profit before tax, amortisation charges on acquired intangible
assets, share based payment charges, mark to market adjustments in
respect of interest rate swaps, interest charges in respect of
contingent consideration due, acquisition costs and in the previous
period the accelerated write off of arrangement fees on the
restructuring of our bank borrowing facility.
(3) Throughout this statement adjusted earnings per share is
earnings per share before amortisation charges on acquired
intangible
assets, share based payment charges, mark to market adjustments
in respect of interest rate swaps, interest charges in respect of
contingent consideration due, acquisition costs and in the previous
period the accelerated write off of arrangement fees on the
restructuring of our bank borrowing facility including the taxation
effect of these.
This interim announcement contains forward-looking statements,
which have been made by the directors in good faith based on the
information available to them up to the time of the approval of
this report and such information should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying such forward-looking information.
For further information:
iomart Group plc Tel: 0141 931 6400
Angus MacSween
Richard Logan
Peel Hunt LLP Tel: 020 7418 8900
(Nominated Adviser
and Broker)
Richard Kauffer
Euan Brown
Alma PR Tel: 020 8004 4217
Caroline Forde
Hilary Buchanan
About iomart Group plc
iomart Group Plc (AIM: IOM) designs, builds and manages cloud
environments. Expert in all types of managed cloud - public,
private and hybrid - iomart is vendor, platform and technology
agnostic and will recommend the cloud environment to meet your
specific business needs.
With a global infrastructure of 10 UK and 6 Global data centres,
fully certified to supply services to both the public and private
sectors, and with over 200 technical experts on hand, iomart
delivers Any Cloud Your Way.
For further information about the Group, please visit
www.iomart.com
Chief Executive's Statement
Introduction
We have again enjoyed a very good trading period with Group
revenue having grown by 16% to GBP42.1m (H1 2016: GBP36.4m). Our
adjusted EBITDA has grown by 13% to GBP17.6m (H1 2016: GBP15.5m)
and our adjusted profit before tax by 23% to GBP10.6m (H1 2016:
GBP8.7m).
Market
The move to the cloud continues to be at the centre of attention
within IT departments.
iomart continues to invest in the skills required to architect,
migrate, manage, monitor, secure and scale public cloud, private
cloud, hybrid IT and traditional IT, with a view to enabling
organisations to transform, innovate, and scale their
operations.
There is a long term and large market opportunity in preparing
and managing enterprises for transformation and deployment to cloud
platforms. The IT environment has become more complex with more
choice and we see a growing requirement for the skills associated
with cloud adoption.
Our ongoing challenge and opportunity is to navigate through
these early days of the further evolution of cloud adoption to
ensure we continue to develop the assets, skills and resources
necessary to be successful in that space.
As we have broadened the scope of our services to include
professional services, we have begun to see the benefits of having
the skill sets around consulting and managing cloud transformation.
We are entering into more strategic conversations with IT
departments who are looking for 'joined up thinking' when it comes
to looking at moving applications or services to the cloud.
There is a growing trend to manage IT in a more fragmented way.
Gone are the days when large organisations or departments would
outsource their entire IT departments and magically believe that
things would somehow be better.
IT evolution now tends to be project by project, application by
application, with a view to maximising value, not being locked into
any one technology vendor, and being able to migrate services at
will.
This plays into the strengths we have established around agility
and flexibility alongside the right expertise and infrastructure,
with an ability to manage the mix of public and private cloud and
hybrids of both effectively.
This is a very long term market opportunity. We are only now
starting to see back office workloads move to cloud environments
and this is a trend that will continue for many years. It is, after
all, only day 2 of the internet.
Operational review
Cloud Services
The Cloud Services operation continues to perform well,
delivering an overall revenue growth rate of 13% with an
encouraging 10% organic growth rate.
During the period we have continued to win new business in both
the private and public cloud arenas. Our positioning as an agnostic
supplier of cloud solutions together with our wide range of skills
and experience makes us the ideal partner for companies that are
considering moving some or all of their infrastructure into the
cloud.
We have continued to develop our relationships with the main
vendors in the market including Microsoft, Dell/ EMC and AWS. Our
consultancy division, SystemsUp, has recently been named as an AWS
Public Sector Partner for Government. The public cloud vendors led
by AWS and Microsoft continue to win market share and it is clear
that they require an ecosystem of organisations, such as iomart, to
provide services and support to the users of these public
clouds.
This has led to the generation of revenue from the provision of
Public Cloud solutions. As expected this has modestly affected some
of our percentage profit margins and the impact of this has been a
reduction in our percentage margins at both gross profit and
adjusted EBITDA level but compensated by an improvement in our
adjusted and reported profit before tax percentage margins. This is
due to the fact that as we provide Public Cloud solutions to our
customers we incur a charge from the Public Cloud service provider
which is included within our cost of sales. The increased cost of
providing Public Cloud solutions has offsetting savings elsewhere
within our income statement with lower charges for power, which is
also included in cost of sales and depreciation. On private or
hybrid cloud solutions we acquire and operate the infrastructure
ourselves and thereby incur depreciation and power charges for
their operation, whereas the charge from the Public Cloud service
provider includes these costs.
The acquisition of Cristie Data Limited ("Cristie") towards the
end of the period provides us with access to an excellent customer
base many of whom are in the public sector.
Our revenues have grown to GBP35.6m (H1 2016: GBP31.5m) as a
result of our acquisitive and organic activities and we continue to
expect Cloud Services to be the driver of growth going forward.
Easyspace
The Easyspace segment has performed as expected and with the
addition of United Communications Limited (which trades as "United
Hosting") from November 2015 has recorded substantial growth in
both revenue and profitability.
Easyspace provides a range of products to the small and micro
business community including an ever wider range of domain names,
shared hosting, emails and dedicated servers.
Our revenues have grown by 33% to GBP6.6m (H1 2016: GBP4.9m)
mainly as a result of our acquisitions, although we have also seen
organic growth of 3% (H1 2016: organic decline of 9.5%) during this
period.
M&A Activity
On 25 August we acquired the entire share capital of Cristie on
a no debt, no cash, normalised working capital basis. Cristie
provides storage and backup solutions and has a significant
presence in the public sector market. On completion a payment of
GBP3.8m, including adjustments required in respect of normalised
working capital, was made to acquire Cristie which at the time had
GBP3.1m of cash resulting in a net outflow of funds of GBP0.7m to
acquire the company.
The M&A market continues to provide opportunities and we
remain committed to continuing to complement our organic growth
through further acquisitions.
Financial Performance
Revenue
Overall revenues from our operations grew 16% to GBP42.1m (H1
2016: GBP36.4m).
Our Cloud Services segment grew revenues by 13% to GBP35.6m (H1
2016: GBP31.5m). This increase was largely due to organic growth of
10% (H1 2016: 10%) added to which was the contribution for the full
six month period from the acquisition of SystemsUp in June 2015 and
a modest contribution from the acquisition of Cristie.
Our Easyspace segment grew revenues by 33% to GBP6.6m (H1 2016:
GBP4.9m). This increase was mainly due to the impact of the
acquisition of United Hosting although the segment did record
organic revenue growth of 3% in the period (H1 2016: 9.5% organic
revenue decline).
Gross Margin
The gross profit in the period, which is calculated by deducting
from revenue variable cost of sales such as domain costs, power and
sales commission and the relatively fixed costs of operating our
datacentres, increased by 12% to GBP27.7m (H1 2016: GBP24.7m). This
substantial increase in gross profit was a direct result of the
contribution from the additional revenue generated over the period,
including the impact of acquisitions.
In percentage terms the gross margin was 65.8% (H1 2016: 67.7%).
As explained above Cloud Services saw a reduction in gross margin
percentage as we begin to provide Public Cloud solutions which
incur a charge from the Public Cloud service provider with
offsetting savings elsewhere within our income statement.
The gross profit margin within our traditional private and
hybrid cloud solutions continues to rise due to our relatively
static datacentre costs which to some extent are fixed in nature
and therefore do not rise in line with revenue growth.
The Easyspace segment saw an increase in its gross margin
percentage mainly due to the favourable impact of the acquisition
of United Hosting in November 2015.
Whilst the provision of Public Cloud solutions into our range of
services has, as expected, impacted our gross and adjusted EBITDA
percentage margins, due to offsetting savings elsewhere within our
income statement, it has not had an adverse effect on our adjusted
profit before tax percentage margin which increased to 25.2% (H1
2016: 23.8%).
Adjusted EBITDA
The Group's adjusted EBITDA grew by 13% to GBP17.6m (H1 2016:
GBP15.5m) reflecting a significantly improved performance. In
percentage terms the adjusted EBITDA margin reduced to 41.8% (H1
2016: 42.6%) with the reduction arising in the Cloud Services
segment whilst the Easyspace segment recorded an improved gross
margin percentage.
Cloud Services increased its adjusted EBITDA by 8% to GBP16.3m
(H1 2016: GBP15.0m). The continued improvement in adjusted EBITDA
is largely due to the additional gross margin contribution arising
from our organic sales growth offset by continued investment in
staffing levels and a full period contribution from the acquisition
of SystemsUp in June 2015. In percentage terms the margin reduced
to 45.8% (H1 2016: 47.8%). The primary reasons for the percentage
margin reduction were the reduction in the Cloud Services gross
margin percentage previously described and inclusion of SystemsUp
for the full six month period. Whilst we have initially included
the activities of Cristie within the Cloud Services segment we
intend to consider this further in due course and may not include
it within this segment in the future.
The adjusted EBITDA of Easyspace increased by 38% to GBP3.1m (H1
2016: GBP2.2m) largely as a result of the impact of the acquisition
of United Hosting in November 2015. In percentage terms the margin
increased to 46.8% (H1 2016: 44.9%) which again was predominantly
due to the impact of the acquisition of United Hosting.
Group overheads, which are not allocated to segments, include
the cost of the Board, all the running costs of the headquarters in
Glasgow, and Group led functions such as human resources,
marketing, finance and design. Group overheads of GBP1.8m have
increased modestly in the period (H1 2016: GBP1.7m).
Adjusted profit before tax
Depreciation charges of GBP5.4m (H1 2016: GBP5.6m) have slightly
reduced. This is a combination of additional depreciation charges
as a result of continued investment in our datacentre estate and
the purchase of equipment to provide services to our new and
existing customers, offset by assets bought in previous periods
becoming fully depreciated in this period and therefore no longer
contributing to the ongoing depreciation charge. In addition we
have not incurred any capital expenditure on the provision of
public cloud solutions which has had the effect of reducing our
depreciation charge in absolute terms and also in it falling as a
percentage of our revenue to 12.7% (H1 2016: 15.3%). In addition
this percentage reduction is also due to the impact of the mix of
assets which we have acquired, with differing useful lives causing
reduced depreciation charges and the fact that not all of our
operations require the same level of capital expenditure to
generate revenue. For example, our SystemsUp consultancy operation
requires no significant capital expenditure and thereby does not
generate a depreciation charge related to its revenues. The charge
for the amortisation of intangible assets, excluding amortisation
of intangible assets resulting from acquisitions ("amortisation of
acquired intangible assets") has increased to GBP0.9m (H1 2016:
GBP0.6m) as a result of increased charges for software licenses and
the additional development activity within the enlarged Group.
Net finance costs, excluding the mark to market adjustment on
interest swaps on the Company's loans, the interest charge on
contingent consideration due and in the previous period the
accelerated write off of arrangement fees on restructuring of our
bank borrowing facility were GBP0.7m (H1 2016: GBP0.6m).
After deducting the charges for depreciation, amortisation,
excluding the amortisation of acquired intangible assets, and
finance costs, excluding the interest charges in respect of
contingent consideration due, the accelerated write off of
arrangement fees in the previous period and the mark to market
adjustment on interest rate swaps, from adjusted EBITDA the
adjusted profit for the period before tax increased by 23% to
GBP10.6m (H1 2016: GBP8.7m).
The adjusted profit before tax margin for the period was 25.2%
(H1 2016: 23.8%). The increase in percentage margin of 1.4% is due
to a combination of the reduction in the adjusted EBITDA margin
over the period of 0.8% offset by the reduction in deprecation
charge as a percentage of revenue of 2.6%.
Profit before tax
The measure of adjusted profit before tax is a non-statutory
measure which is commonly used to analyse the performance of
companies where M&A activity forms a significant part of their
activities.
A reconciliation of adjusted profit before tax to reported
profit before tax is shown below:
Reconciliation of adjusted
profit before tax to profit 6 months 6 months Year
before tax to 30/09/2016 to 30/09/2015 to 31/03/2016
Adjusted profit before tax 10,632 8,677 18,970
Less: Share based payments (557) (338) (1,081)
Less: Amortisation of acquired
intangible assets (2,697) (2,417) (5,354)
Less: Acquisition costs (102) (129) (116)
Less: Accelerated write off
of arrangement fees on restructuring
of facility - (177) (177)
Add: Mark to market adjustment
on interest rate swaps 43 67 64
Less: Interest on contingent
consideration (177) - (152)
Add: Gain on revaluation of
contingent consideration - - 870
Profit before tax 7,142 5,683 13,024
---------------------------------------- ---------------- --------------- ----------------
The adjusting items are: share based payment charges in the
period which increased to GBP0.6m (H1 2016: GBP0.3m) as a result of
the issue of additional share options; charges for the amortisation
of acquired intangible assets of GBP2.7m (H1 2016: GBP2.4m) which
have increased mainly as a result of the full period effect of
acquisitions made in previous periods; costs of GBP0.1m (H1 2016:
GBP0.1m) as a result of acquisitions; finance charges of GBPnil (H1
2016: GBP0.2m) due to the accelerated release of arrangement fees
on the bank borrowing facility which was restructured in the
previous period; a finance cost credit of GBP0.04m (H1 2016:
GBP0.07m) in respect of mark to market adjustments relating to
interest rate swaps on the Company's loans and interest charges on
contingent consideration due of GBP0.2m (H1 2016: GBPnil).
After deducting the charges for share based payments, the
amortisation of acquired intangible assets, acquisition costs, the
mark to market adjustment on interest rate swaps, the interest
charges in respect of contingent consideration due and the
accelerated write off of arrangement fees on the bank borrowing
facility which was restructured during the previous period from the
adjusted profit before tax, the reported profit before tax
increased by 26% to GBP7.1m (H1 2016: GBP5.7m).
In percentage terms the profit before tax margin was 17.0% (H1
2016: 15.6%). This increase in percentage margin of 1.4% is similar
to the increase in the adjusted profit before tax percentage margin
and is due to the same reasons as the adjusted profit before tax
margin increase previously explained.
Profit for the period from total operations
There is a tax charge in the period of GBP1.3m (H1 2016:
GBP0.8m), which comprises a current taxation charge of GBP2.1m (H1
2016: GBP1.7m), and a deferred taxation credit of GBP0.8m (H1 2016:
GBP0.9m). The tax charge for the period has increased because of
the increase in profitability of the Group. This results in a
profit for the period from total operations of GBP5.8m (H1 2016:
GBP4.9m) an increase of 20%.
Earnings per share
Adjusted diluted earnings per share, which is based on profit
for the period attributed to ordinary shareholders before share
based payment charges, amortisation of acquired intangible assets,
the accelerated write off of arrangement fees on the restructuring
of the bank facility in the previous period, the mark to market
adjustment on interest rate swaps, the interest charges in respect
of contingent consideration due and acquisition costs and the tax
effect of these items, was 8.03p (H1 2016: 6.75p) an increase of
19%.
The measure of adjusted earnings per share as described above is
a non-statutory measure which is commonly used to analyse the
performance of companies where M&A activity forms a significant
part of their activities.
Basic earnings per share from continuing operations was 5.43p
(H1 2016: 4.57p) an increase of 19%.
The calculation of both adjusted diluted earnings per share and
basic earnings per share is included at note 3.
Cash flow
The Group generated cash from operations in the period of
GBP16.7m (H1 2016: GBP13.6m), which is 95% of our adjusted EBITDA
(H1 2016: 88%). Expenditure on taxation in the period was GBP1.2m
(H1 2016: GBP1.8m), which was reduced due to the receipt of a tax
refund relating to previous periods, resulting in net cash flow
from operating activities in the period of GBP15.5m (H1 2016:
GBP11.8m).
Expenditure on investing activities of GBP8.5m (H1 2016:
GBP16.3m) was incurred in the period. GBP4.6m (H1 2016: GBP6.6m),
net of related finance lease drawdown and trade creditors, was
incurred on the acquisition of property, plant and equipment
principally to provide services to our customers. We made purchases
of intangible assets of GBP1.4m (H1 2016: GBP0.4m) in the period,
with the increase largely due to the advance purchase of additional
software licences for storage and backup purposes. In respect of
M&A activity GBP1.2m (H1 2016: GBPnil) was paid out for
contingent consideration due on acquisitions made in previous
periods and GBP0.7m (H1 2016: GBP8.7m) was incurred on the
acquisition of Cristie in the period, as described above, net of
cash acquired of GBP3.1m. We also incurred GBP0.7m (H1 2016:
GBP0.6m) in respect of the capitalisation of development costs
during the period.
There was net cash used in financing activities of GBP6.7m (H1
2016: GBP4.0m net cash generated). We generated GBP0.6m (H1 2016:
GBP0.1m) from the issue of shares as a result of the exercise of
options by staff. We made no drawdowns under our bank facility (H1
2016: GBP9.0m) and we made repayments of GBP3.0m (H1 2016: GBP1.0m)
during the period. We repaid GBP0.3m (H1 2016: GBP0.6m) of finance
leases and incurred GBP0.6m (H1 2016: GBP0.8m) of finance charges.
We also made a dividend payment of GBP3.4m (H1 2016: GBP2.7m). As a
result cash and cash equivalent balances at the end of the period
were GBP10.6m (H1 2016: GBP7.9m).
Net Debt
The net debt position of the Group at the end of the period was
GBP22.2m (H1 2016: GBP23.2m). This represents a multiple of less
than one times our annual adjusted EBITDA which we believe is a
very comfortable level of debt to carry.
Current trading and outlook
Trading in the first half of the year has been very good and we
remain focussed on building our recurring revenues in line with our
business model. We are uncovering an increasing breadth of
opportunities to constantly grow that recurring revenue and remain
confident in our future prospects.
Angus MacSween
CEO
5 December 2016
Consolidated Interim Statement of Comprehensive Income
Six months ended 30 September 2016
Unaudited Unaudited Audited
---------------- ---------------- ----------------
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
---------------- ---------------- ----------------
GBP'000 GBP'000 GBP'000
---------------- ---------------- ----------------
Revenue 42,119 36,431 76,280
Cost of sales (14,416) (11,755) (24,650)
------------------------------------- ---------------- ---------------- ----------------
Gross profit 27,703 24,676 51,630
Administrative expenses (19,693) (18,217) (37,917)
------------------------------------- ---------------- ---------------- ----------------
Operating profit 8,010 6,459 13,713
Analysed as:
Earnings before interest,
tax, depreciation, amortisation,
acquisition costs and share
based payments 17,585 15,520 32,341
Share based payments (557) (338) (1,081)
Acquisition costs 4 (102) (129) (116)
Depreciation 8 (5,365) (5,570) (10,878)
Amortisation - acquired intangible
assets (2,697) (2,417) (5,354)
Amortisation - other intangible
assets (854) (607) (1,199)
------------------------------------- ---------------- ---------------- ----------------
Gain on revaluation of contingent
consideration - - 870
Finance income 16 10 128
Finance costs 5 (884) (786) (1,687)
------------------------------------- ---------------- ---------------- ----------------
Profit before taxation 7,142 5,683 13,024
Taxation 6 (1,327) (803) (2,005)
------------------------------------- ---------------- ---------------- ----------------
Profit for the period from
total operations 5,815 4,880 11,019
Other comprehensive income
Currency translation differences 14 1 10
------------------------------------- ---------------- ---------------- ----------------
Other comprehensive expense
for the period 14 1 10
------------------------------------- ---------------- ---------------- ----------------
Total comprehensive income
for the period 5,829 4,881 11,029
Attributable to equity holders
of the parent 5,829 4,881 11,029
Basic and diluted earnings
per share
Total operations
Basic earnings per share 3 5.43 4.57 10.32
p p p
Diluted earnings per share 3 5.36 4.52 10.17
p p p
------------------------------------- ---------------- ---------------- ----------------
Consolidated Interim Statement of Financial Position
As at 30 September 2016
Unaudited Unaudited Audited
----------- ----------- -----------
30/09/2016 30/09/2015 31/03/2016
----------- ----------- -----------
GBP'000 GBP'000 GBP'000
----------- ----------- -----------
ASSETS
Non-current assets
Intangible assets - goodwill 7 61,724 55,050 61,123
Intangible assets - other 7 22,497 19,366 23,065
Lease deposit 2,760 2,416 2,760
Property, plant and equipment 8 35,340 34,831 36,045
122,321 111,663 122,993
Current assets
Cash and cash equivalents 10,599 7,938 10,341
Trade and other receivables 14,092 13,123 13,718
24,691 21,061 24,059
Total assets 147,012 132,724 147,052
LIABILITIES
Non-current liabilities
Contingent consideration
due on acquisitions 9 - - (2,068)
Non-current borrowings (740) (1,029) (826)
Trade and other payables (318) (593) (455)
Provisions for other liabilities
and charges (2,010) (2,330) (1,879)
Deferred tax liability (1,521) (1,521) (2,075)
----------------------------------- ----------- ----------- -----------
(4,589) (5,473) (7,303)
Current liabilities
Contingent consideration
due on acquisitions 9 (2,220) (2,655) (1,135)
Trade and other payables (19,827) (17,445) (19,532)
Provisions - - (211)
Current income tax liabilities (2,506) (1,645) (1,504)
Current borrowings (32,037) (30,078) (35,098)
(56,590) (51,823) (57,480)
Total liabilities (61,179) (57,296) (64,783)
Net assets 85,833 75,428 82,269
----------------------------------- ----------- ----------- -----------
EQUITY
Share capital 1,078 1,078 1,078
Own shares (267) (514) (489)
Capital redemption reserve 1,200 1,200 1,200
Share premium 21,067 21,067 21,067
Merger reserve 4,983 4,983 4,983
Foreign currency translation
reserve (23) (46) (37)
Retained earnings 57,795 47,660 54,467
----------------------------------- ----------- ----------- -----------
Total equity 85,833 75,428 82,269
----------------------------------- ----------- ----------- -----------
Consolidated Interim Statement of Cash Flows
Six months ended 30 September 2016
Unaudited Unaudited Audited
---------------- ---------------- ----------------
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
---------------- ---------------- ----------------
GBP'000 GBP'000 GBP'000
---------------- ---------------- ----------------
Profit before tax 7,142 5,683 13,024
Gain on revaluation of contingent
consideration - - (870)
Finance costs - net 868 776 1,559
Depreciation 5,365 5,570 10,878
Amortisation 3,551 3,024 6,553
Share based payments 557 338 1,081
Movement in trade receivables 186 (1,111) (1,612)
Movement in trade payables (944) (634) 298
Cash flow from operations 16,725 13,646 30,911
Taxation paid (1,222) (1,826) (4,311)
---------------- ---------------- ----------------
Net cash flow from operating
activities 15,503 11,820 26,600
Cash flow from investing
activities
Purchase of property, plant
and equipment (4,634) (6,643) (12,385)
Capitalisation of development
costs (667) (577) (1,123)
Purchase of intangible assets (1,384) (406) (1,207)
Payment for acquisition of
subsidiary undertakings net
of cash acquired (675) (8,651) (15,924)
Contingent consideration
paid (1,161) - (1,650)
Payment of deposits - - (300)
Finance income received 16 10 33
---------------- ---------------- ----------------
Net cash used in investing
activities (8,505) (16,267) (32,556)
Cash flow from financing
activities
Exercise of share options 610 54 91
Draw down of bank loans - 9,000 16,500
Repayment of finance leases (343) (577) (984)
Repayment of bank loans (3,000) (1,000) (3,500)
Finance costs paid (632) (771) (1,489)
Dividends paid (3,375) (2,668) (2,668)
---------------- ---------------- ----------------
Net cash (used in)/generated
from financing activities (6,740) 4,038 7,950
Net increase/(decrease) in
cash and cash equivalents 258 (409) 1,994
Cash and cash equivalents
at the beginning of the period 10,341 8,347 8,347
---------------- ---------------- ----------------
Cash and cash equivalents
at the end of the period 10,599 7,938 10,341
================ ================ ================
Consolidated Interim Statement of Changes in Equity
Six months ended 30 September 2016
Foreign
Own Own currency Capital Share
Changes in Share shares shares translation redemption premium Merger Retained
equity capital EBT Treasury reserve reserve account reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 April 2015 1,078 (70) (468) (47) 1,200 21,067 4,983 44,936 72,679
Profit in
the period - - - - - - - 4,880 4,880
Currency
translation
differences - - - 1 - - - - 1
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
comprehensive
income - - - 1 - - - 4,880 4,881
Dividends - - - - - - - (2,668) (2,668)
Share based
payments - - - - - - - 338 338
Deferred tax
on share
based
payments - - - - - - - 144 144
Issue of own
shares for
option
redemption - - 24 - - - - 30 54
Total
transactions
with owners - - 24 - - - - (2,156) (2,132)
Balance at
30 September
2015 1,078 (70) (444) (46) 1,200 21,067 4,983 47,660 75,428
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Profit in
the period - - - - - - - 6,139 6,139
Currency
translation
differences - - - 9 - - - - 9
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
comprehensive
income - - - 9 - - - 6,139 6,148
Share based
payments - - - - - - - 743 743
Deferred tax
on share
based
payments - - - - - - - (87) (87)
Issue of own
shares for
option
redemption - - 25 - - - - 12 37
Total
transactions
with owners - - 25 - - - - 668 693
Balance at
31 March 2016 1,078 (70) (419) (37) 1,200 21,067 4,983 54,467 82,269
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Profit in
the period - - - - - - - 5,815 5,815
Currency
translation
differences - - - 14 - - - - 14
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
comprehensive
income - - - 14 - - - 5,815 5,829
Dividends - - - - - - - (3,375) (3,375)
Share based
payments - - - - - - - 557 557
Deferred tax
on share
based
payments - - - - - - - (57) (57)
Issue of own
shares for
option
redemption - - 222 - - - - 388 610
Total
transactions
with owners - - 222 - - - - (2,487) (2,265)
Balance at
30 September
2016 1,078 (70) (197) (23) 1,200 21,067 4,983 57,795 85,833
--------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Notes to the Half Yearly Financial Information
Six months ended 30 September 2016
1. Accounting policies
The financial information for the year ended 31 March 2016 set
out in this half yearly report does not constitute statutory
financial statements as defined in section 434 of the Companies Act
2006. The figures for the year ended 31 March 2016 have been
extracted from the Group financial statements for that year. Those
financial statements have been delivered to the Registrar of
Companies and included an independent auditor's report, which was
unqualified and did not contain a statement under section 493 of
the Companies Act 2006.
The half yearly financial information has been prepared using
the same accounting policies and estimation techniques as will be
adopted in the Group financial statements for the year ending 31
March 2017. The Group financial statements for the year ended 31
March 2016 were prepared under International Financial Reporting
Standards as adopted by the European Union. These half yearly
financial statements have been prepared on a consistent basis and
format with the Group financial statements for the year ended 31
March 2016. The provisions of IAS 34 'Interim Financial Reporting'
have not been applied in full.
2. Operating segments
Revenue by Operating Segment
6 months to 30/09/2016 6 months to 30/09/2015 Year to 31/03/2016
------------------------------ ------------------------------ ------------------------------
External Internal Total External Internal Total External Internal Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- --------- --------- -------- --------- --------- -------- --------- --------- --------
Easyspace 6,550 - 6,550 4,936 - 4,936 10,883 - 10,883
Cloud
Services 35,569 846 36,415 31,495 481 31,976 65,397 1,114 66,511
--------- --------- -------- --------- --------- -------- --------- --------- --------
42,119 846 42,965 36,431 481 36,912 76,280 1,114 77,394
----------- --------- --------- -------- --------- --------- -------- --------- --------- --------
Geographical Information
In presenting the consolidated information on a geographical
basis, revenue is based on the geographical location of customers.
The United Kingdom is the place of domicile of the parent company,
iomart Group plc. No individual country other than the United
Kingdom contributes a material amount of revenue therefore revenue
from outside the United Kingdom has been shown as from Rest of the
World.
Analysis of Revenue by Destination
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
GBP'000 GBP'000 GBP'000
------------------------- --------------- --------------- ---------------
United Kingdom 35,062 30,072 64,218
Rest of the
World 7,057 6,359 12,062
--------------- --------------- ---------------
Revenue from operations 42,119 36,431 76,280
-------------------------- --------------- --------------- ---------------
2. Operating segments (continued)
Profit by Operating Segment
6 months to 30/09/2016 6 months to 30/09/2015 Year to 31/03/2016
---------------------------------------------- ---------------------------------------------- ---------------------------------------------
Share
Share Share based
EBITDA based EBITDA based EBITDA payments,
before payments, before payments, before acquisition
share acquisition share acquisition Operating share costs,
based costs, Operating based costs, profit/(loss) based depreciation Operating
payments depreciation profit/(loss) payments depreciation payments & profit/(loss)
and & and & and amortisation
acquisition amortisation acquisition amortisation acquisition
costs costs costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------- -------------- --------------- ------------- -------------- --------------- ------------- ------------- ---------------
Easyspace 3,067 (840) 2,227 2,215 (198) 2,017 5,094 (815) 4,279
Cloud Services 16,287 (8,076) 8,211 15,041 (8,396) 6,645 31,084 (16,616) 14,468
Group
overheads (1,769) - (1,769) (1,736) - (1,736) (3,837) - (3,837)
Share based
payments - (557) (557) - (338) (338) - (1,081) (1,081)
Acquisition
costs - (102) (102) - (129) (129) - (116) (116)
------------- -------------- --------------- ------------- -------------- --------------- ------------- ------------- ---------------
17,585 (9,575) 8,010 15,520 (9,061) 6,459 32,341 (18,628) 13,713
Gain on
revaluation
of contingent
consideration - - 870
Group interest
and tax (2,195) (1,579) (3,564)
--------------- ------------- -------------- --------------- ------------- -------------- --------------- ------------- ------------- ---------------
Profit for
the period 17,585 (9,575) 5,815 15,520 (9,061) 4,880 32,341 (18,628) 11,019
--------------- ------------- -------------- --------------- ------------- -------------- --------------- ------------- ------------- ---------------
Group overheads, share based payments, acquisition costs,
interest and tax are not allocated to segments.
3. Earnings per share
The calculations of earnings per share are based on the
following results and numbers:
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
---------------- ---------------- ----------------
Total Operations
---------------- ---------------- ----------------
GBP'000 GBP'000 GBP'000
Profit for the financial period
and basic earnings attributed
to ordinary shareholders 5,815 4,880 11,019
No No No
Weighted average number of
ordinary shares: 000 000 000
Called up, allotted and fully
paid at start of period 107,803 107,803 107,803
Own shares held in Treasury (619) (932) (898)
Shares held by Employee Benefit
Trust (141) (141) (141)
Weighted average number of
ordinary shares - basic 107,043 106,730 106,764
Dilutive impact of share options 1,390 1,245 1,609
Weighted average number of
ordinary shares - diluted 108,433 107,975 108,373
---------------------------------- ---------------- ---------------- ----------------
Basic earnings per share 5.43 4.57 10.32
p p p
Diluted earnings per share 5.36 4.52 10.17
p p p
---------------------------------- ---------------- ---------------- ----------------
6 months 6 months Year
Adjusted earnings per share to 30/09/2016 to 30/09/2015 to 31/03/2016
---------------- ---------------- ----------------
GBP'000 GBP'000 GBP'000
Profit for the financial period
and basic earnings attributed
to ordinary shareholders 5,815 4,880 11,019
- Amortisation of acquired
intangible assets 2,697 2,417 5,354
- Acquisition costs 102 129 116
- Share based payments 557 338 1,081
- Mark to market interest adjustment (43) (67) (64)
- Accelerated finance cost
due to refinancing - 177 177
- Finance charge on contingent
consideration 177 - 152
- Gain on revaluation of contingent
consideration - - (870)
- Tax impact of adjusted items (597) (590) (1,311)
-------------------------------------- ---------------- ---------------- ----------------
Adjusted profit for the financial
period and adjusted basic earnings
attributed to ordinary shareholders 8,708 7,284 15,654
Adjusted basic earnings per 8.14 6.82 14.66
share p p p
Adjusted diluted earnings per 8.03 6.75 14.44
share p p p
-------------------------------------- ---------------- ---------------- ----------------
4. Acquisition costs
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
GBP'000 GBP'000 GBP'000
----------------------------- --------------- --------------- ---------------
Professional fees 98 113 263
Non-recurring integration
costs
- Onerous lease provisions - - (169)
- Other 4 16 22
------------------------------ --------------- --------------- ---------------
Total acquisition costs
for the period 102 129 116
------------------------------ --------------- --------------- ---------------
During the period costs of GBP98,000 (H1 2016: GBP113,000) were
incurred in respect of professional fees on an acquisition. In
addition to these professional fees, one-off costs of GBP4,000 (H1
2016: GBP16,000) directly related to the integration of
acquisitions into the Group were also incurred.
5. Finance costs
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
GBP'000 GBP'000 GBP'000
--------------------------------------- --------------- --------------- ---------------
Bank loans (628) (505) (1,109)
Finance leases (99) (135) (251)
Other interest charges (23) (36) (62)
Mark to market adjustment
on interest rate swaps 43 67 64
Accelerated write off of arrangement
fees on restructuring of facility - (177) (177)
Finance charge on contingent
consideration (177) - (152)
---------------------------------------- --------------- --------------- ---------------
Finance costs for the period (884) (786) (1,687)
---------------------------------------- --------------- --------------- ---------------
6. Taxation
6 months 6 months Year
to 30/09/2016 to 30/09/2015 to 31/03/2016
GBP'000 GBP'000 GBP'000
--------------------------------------- --------------- --------------- ---------------
Tax charge for the period (2,126) (1,720) (3,663)
Adjustment relating to prior
periods - (12) 52
---------------------------------------- --------------- --------------- ---------------
Total current taxation (2,126) (1,732) (3,611)
Origination and reversal
of temporary differences 871 933 1,482
Adjustment relating to prior
periods (4) - 31
Effect of different statutory
tax rates of overseas jurisdictions 12 (4) 61
Effect of changes in tax
rates (80) - 32
---------------------------------------- --------------- --------------- ---------------
Total deferred taxation
credit 799 929 1,606
Taxation charge for the
period (1,327) (803) (2,005)
---------------------------------------- --------------- --------------- ---------------
The Group has no unused tax losses (H1 2016: GBP0.5m) available
for offset against future profits and therefore no corresponding
deferred tax asset has been recognised (H1 2016: GBP0.5m).
7. Intangible assets
Domain
names
Development Customer Beneficial & IP
Goodwill costs relationships Software contracts addresses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
Cost:
At 1 April
2015 47,342 3,709 26,431 2,114 86 280 79,962
Additions in
the period - - - 264 - - 264
Currency translation
differences - - (12) (2) - - (14)
Acquired on
acquisition
of subsidiary 7,708 - 2,516 - - - 10,224
Development
costs capitalised - 577 - - - - 577
At 30 September
2015 55,050 4,286 28,935 2,376 86 280 91,013
Additions in
the period - - - 756 - - 756
Currency translation
differences - - 35 5 - - 40
Acquired on
acquisition
of subsidiary 6,073 - 5,912 - - - 11,985
Development
costs capitalised - 546 - - - - 546
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
At 31 March
2016 61,123 4,832 34,882 3,137 86 280 104,340
Additions in
the period 601 - - 1,315 - - 1,916
Currency translation
differences - - 65 25 - - 90
Acquired on
acquisition
of subsidiary - - 982 - - - 982
Development
costs capitalised - 667 - - - - 667
At 30 September
2016 61,724 5,499 35,929 4,477 86 280 107,995
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
Accumulated
amortisation:
At 1 April
2015 - (2,496) (9,945) (1,003) (19) (116) (13,579)
Currency translation
differences - - 5 1 - - 6
Charge for
the period - (384) (2,413) (195) (4) (28) (3,024)
At 30 September
2015 - (2,880) (12,353) (1,197) (23) (144) (16,597)
Currency translation
differences - - (21) (5) - - (26)
Charge for
the period - (314) (2,934) (251) (3) (27) (3,529)
At 31 March
2016 - (3,194) (15,308) (1,453) (26) (171) (20,152)
Currency translation
differences - - (51) (20) - - (71)
Charge for
the period - (442) (2,693) (385) (4) (27) (3,551)
At 30 September
2016 - (3,636) (18,052) (1,858) (30) (198) (23,774)
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
Carrying amount:
At 30 September
2016 61,724 1,863 17,877 2,619 56 82 84,221
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
At 31 March
2016 61,123 1,638 19,574 1,684 60 109 84,188
At 30 September
2015 55,050 1,406 16,582 1,179 63 136 74,416
---------------------- --------- ------------ --------------- --------- ----------- ----------- ---------
8. Property, plant and equipment
Freehold Leasehold Datacentre Computer Office Motor
property improve-ments equipment equipment equipment vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------- --------------- ----------- ----------- ----------- ---------- ---------
Cost:
At 1 April
2015 2,062 6,857 18,367 37,978 2,144 48 67,456
Additions
in the period - 227 444 4,773 98 - 5,542
Acquisition
of subsidiary - - - 9 - 20 29
Disposals
in the period - - - (15) - - (15)
Currency
translation
differences - - - (18) - - (18)
At 30 September
2015 2,062 7,084 18,811 42,727 2,242 68 72,994
Additions
in the period - 239 1,661 4,330 111 - 6,341
Acquisition
of subsidiary - - - 143 3 - 146
Currency
translation
differences - - - 42 - - 42
At 31 March
2016 2,062 7,323 20,472 47,242 2,356 68 79,523
Additions
in the period - 34 312 3,884 148 - 4,378
Acquisition
of subsidiary - - - 179 27 - 206
Disposals
in the period - (3) - (58) - - (61)
Currency
translation
differences - - - 134 - - 134
At 30 September
2016 2,062 7,354 20,784 51,381 2,531 68 84,180
----------------- ---------- --------------- ----------- ----------- ----------- ---------- ---------
Accumulated
depreciation:
At 1 April
2015 (150) (1,858) (6,253) (23,196) (1,112) (41) (32,610)
Charge for
the period (20) (256) (769) (4,379) (139) (7) (5,570)
Disposals
in the period - - - 15 - - 15
Currency
translation
differences - - - 2 - - 2
At 30 September
2015 (170) (2,114) (7,022) (27,558) (1,251) (48) (38,163)
Charge for
the period (21) (223) (917) (4,020) (120) (7) (5,308)
Currency
translation
differences - - - (7) - - (7)
At 31 March
2016 (191) (2,337) (7,939) (31,585) (1,371) (55) (43,478)
Charge for
the period (21) (226) (922) (4,067) (121) (8) (5,365)
Disposals
in the period - 3 - 58 - - 61
Currency
translation
differences - - - (58) - - (58)
At 30 September
2016 (212) (2,560) (8,861) (35,652) (1,492) (63) (48,840)
----------------- ---------- --------------- ----------- ----------- ----------- ---------- ---------
Carrying
amount:
At 30 September
2016 1,850 4,794 11,923 15,729 1,039 5 35,340
----------------- ---------- --------------- ----------- ----------- ----------- ---------- ---------
At 31 March
2016 1,871 4,986 12,533 15,657 985 13 36,045
At 30 September
2015 1,892 4,970 11,789 15,169 991 20 34,831
----------------- ---------- --------------- ----------- ----------- ----------- ---------- ---------
9. Contingent consideration due on acquisitions
30/09/2016 30/09/2015 31/03/2016
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- ----------
Contingent consideration
due on acquisitions
* ServerSpace Limited - (1,650) -
* Systems Up Limited - (1,005) (135)
* United Communications Limited (2,220) - (3,068)
Total contingent consideration
due on acquisitions (2,220) (2,655) (3,203)
---------------------------------------- ---------- ---------- ----------
10. Analysis of change in net debt
Finance
Cash leases
and cash Bank and hire
equivalents loans purchase Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ------------- --------- --------- --------
At 1 April 2015 8,347 (21,457) (2,284) (15,394)
Repayment of bank
loans - 1,000 - 1,000
New bank loans - (9,000) - (9,000)
Impact of effective
interest rate - 46 - 46
Cash flow (409) - 587 178
--------------------------- ------------- --------- --------- --------
At 30 September 2015 7,938 (29,411) (1,697) (23,170)
Repayment of bank
loans - 2,500 - 2,500
New bank loans - (7,500) - (7,500)
Inception of finance
leases - - (97) (97)
Impact of effective
interest rate - (114) - (114)
Acquired on acquisition
of subsidiary 4,476 - - 4,476
Currency translation
difference - - (2) (2)
Cash flow (2,073) - 397 (1,676)
--------------------------- ------------- --------- --------- --------
At 31 March 2016 10,341 (34,525) (1,399) (25,583)
Repayment of bank
loans - 3,000 - 3,000
Impact of effective
interest rate - (147) - (147)
Acquired on acquisition
of subsidiary 3,104 - (25) 3,079
Currency translation
difference - - (24) (24)
Cash flow (2,846) - 343 (2,503)
At 30 September 2016 10,599 (31,672) (1,105) (22,178)
--------------------------- ------------- --------- --------- --------
11. Acquisitions
Cristie Data Limited
The Group acquired 100% of the issued share capital of Cristie
Data Limited ("Cristie") on 25 August 2016.
Cristie is a Stroud based data storage, backup and
virtualisation solutions provider, which has operated across all
sectors of industry from SMEs to large enterprises, and public
sector to private sector for over 40 years. Cristie is particularly
active in the UK public sector especially in education and health,
which offers the opportunity for the Group to increase its presence
in these areas. The acquisition is in line with the Group's
strategy to grow its operations both organically and by
acquisition.
During the current period the Group incurred GBP98,000 of third
party acquisition related costs in respect of this acquisition.
These expenses are included in administrative expenses in the
Group's consolidated statement of comprehensive income for the 6
months ended 30 September 2016.
The following table summarises the consideration to acquire
Cristie and the amounts of identified assets acquired and
liabilities assumed at the acquisition date:
GBP'000
------------------------------------------- --------
Recognised amounts of assets acquired and
liabilities assumed (provisional):
Cash and cash equivalents 3,104
Trade and other receivables 571
Property, plant and equipment 206
Intangible assets 982
Trade and other payables (1,361)
Current borrowings (25)
Current income tax liabilities (99)
Deferred tax liability (200)
------------------------------------------- --------
Identifiable net assets 3,178
Goodwill 601
------------------------------------------- --------
Total consideration 3,779
------------------------------------------- --------
Satisfied by:
Cash - paid on acquisition 3,779
Total consideration to be transferred 3,779
------------------------------------------- --------
The recognised amounts of all the assets acquired and
liabilities assumed are provisional.
The agreed purchase price for the shares, on a cash-free,
debt-free, normalised working capital basis was GBP1,250,000. On
the date of the acquisition a payment of GBP3,779,000 was made in
cash, including an amount of GBP2,529,000 in settlement in respect
of the additional debt assumed, cash acquired and normalised
working capital position of Cristie at completion.
Cristie earned revenue of GBP388,000 and generated profits
before tax of GBP31,000 in the period since acquisition.
United Communications Limited
The fair values of acquired assets and liabilities, including
goodwill, previously disclosed as provisional for United
Communications Limited have been finalised in the current period
with no changes to the fair values disclosed in the Annual Report
and Accounts 2016.
13. Availability of half yearly reports
Half yearly reports will be sent to all shareholders on 11
January 2017. Copies of the half yearly report will be available
for collection from the offices of Peel Hunt LLP, 120 London Wall,
London, EC2Y 5ET, for a period of one month from the date of
despatch and in accordance with Rules 20 and 26 of the AIM Rules,
available from the Company's website at www.iomart.com.
INDEPENT REVIEW REPORT TO IOMART GROUP PLC
Introduction
We have been engaged by the company to review the financial
information in the half-yearly financial report for the six months
ended 30 September 2016 which comprises the consolidated interim
statement of comprehensive income, the consolidated interim
statement of financial position, the consolidated interim statement
of cash flows, the consolidated interim statement of changes in
equity and the related notes 1 to 13 set out on pages 8 to 19. We
have read the other information contained in the half yearly
financial report which comprises only the interim results
announcement and the chief executive's statement and considered
whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with
guidance contained in Independent Standard on Review Engagements
(UK and Ireland) 2410, "Review of Interim Financial Information
performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. Our review work has been undertaken so
that we might state to the company those matters we are required to
state to it in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusion we have
formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules for Companies of
the London Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly report are consistent with those which will be adopted
in the annual accounts having regard to the accounting standards
applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The financial information in the half-yearly
financial report has been prepared in accordance with the basis of
preparation in Note 1.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 September
2016 is not prepared, in all material respects, in accordance with
the basis of accounting described in Note 1.
GRANT THORNTON UK LLP
Statutory auditor, Chartered Accountants
Glasgow
5 December 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKPDNKBDBNBK
(END) Dow Jones Newswires
December 06, 2016 02:00 ET (07:00 GMT)