TIDMDXR
RNS Number : 4709O
Directex Realisations Plc
29 June 2010
Press Release
29 June 2010
Directex Realisations plc
(the "Group")
Final Results for the year ended 31 December 2009
Directex Realisations plc, (AIM: DXR), announces its final results for the year
ended 31 December 2009.
Highlights
· Group's French direct marketing subsidiaries sold during 2009
· Investing policy approved by shareholders in March 2010
· Ongoing costs associated with operating the Group reduced
For further information:
Directex Realisations plc
Jonathan Lander, Chairman
Tel: + 44 (0) 7634 9700
Libertas Capital Corporate Finance Limited
Sandy Jamieson
Tel: + 44 (0) 7569 9650
Chairman's statement
Introduction
I am pleased to present to shareholders the results for the year ended 31
December 2009. I was appointed to the Board at a General Meeting on 4 March
2010 and the results contained herein are, therefore, for a period during which
I was not Chairman of the Group. At the year end, the Group's net assets were
GBP95,000 (2008: GBP2,647,000), a fall of approximately 96% compared to the
prior year.
Current activities and future plans
The Group's French subsidiary NP6 SAS was sold during 2009. The remaining
French subsidiaries, Directinet SA and Netcollections SAS were sold in January
2010. Following the latter disposals, the Group settled a lease obligation in
respect of its London offices and repaid bank debt.
The Group is now an investment company with a mandate to invest in low-risk
securities as more fully set out in the investing policy approved by
shareholders on 4 March 2010. This activity is conducted through the French
branch. The principal assets following the Directinet and Netcollections
disposals were an unquoted investment in Webclubs Limited, and cash.
There has been and there remains considerable administrative work to resolve
certain matters inherited by the present Board, all of which are essential to
ensuring a clean position from which to base discussions for building
shareholder value including, if appropriate, any reverse takeover. One of these
outstanding matters is the determination of the final consideration in respect
of the disposals of Directinet and Netcollections, following their sale to
Bisnode AB ("Bisnode") in January 2010. We are in discussions with Bisnode in
regard to the calculation of certain further amounts that we believe are due to
the Group under the sale agreement. We have rejected their initial offer made
on 17 May 2010 and intend to pursue rigorously all the Group's entitlements.
Since our appointment we have reduced significantly the ongoing costs associated
with the Group. The Group has incurred very large advisory and interim
management fees over the last two years and we have curtailed all non-essential
expenditures. We expect that the Group's ongoing annual costs will not exceed
approximately GBP0.15m.
Jonathan Lander
Chairman
29 June 2010
Financial review
The results of the Group are reported on page 4 of the preliminary report. As
all trading operations undertaken by the Group's French businesses (NP6,
Directinet and Netcollections) were sold either before the year end (in the case
of NP6) or a decision to sell them had been made (in respect of Directinet and
Netcollections), these operations have been classified as discontinued.
Accordingly, the Group had no revenue from continuing operations for the year
(2008 restated: nil).
We have reviewed the administrative expenses incurred by the Group and
apportioned those between continuing and discontinued operations. Those
expenses relating to continuing operations (before finance costs) were GBP1.34m
for the year (2008: GBP1.18m).
The loss before tax on continuing operations was GBP1.26m (2008: loss GBP3.76m)
and the result from discontinued operations in the year was a profit of GBP0.49m
compared with a loss of GBP8.27m in 2008.
Cashflow
Cash and cash equivalents decreased to GBP0.5m (2008: GBP3.7m). The principal
movements in the year were an outflow GBP0.9m (2008: inflow GBP3.1m) of cash
from operating activities, deferred consideration payments of GBPnil (2008:
GBP3.2m), GBP2.1m cash inflow (2008: GBP1.3m cash inflow) from the disposal of
subsidiaries and repayment of borrowings of GBP2.9m (2008: GBPnil).
Risks and Uncertainties
The Group has and may have certain trading and other liabilities relating to its
current and past operations which the Board has made provision for where it
considers it prudent to so do.
The previous Board reported to shareholders that the Group's French Branch,
which has substantial tax losses, may be able to recover taxes paid in prior
periods to the extent that the tax losses are not utilised in later years to
offset taxes payable. Any repayments from the Group's French Branch would be
made in approximately 5 years but their recoverability is far from certain. It
is not the current Board's policy to comment specifically on tax matters but
steps have been taken to reduce the risk that the potential value is lost
through some technical breach. If and when more material information is known
about these potential repayments, we will update shareholders as the Board
considers appropriate.
The Board gives careful consideration to the principles of corporate governance
as set out in the Combined Code on Corporate Governance issued by the Financial
Reporting Council in 2008 (the "Revised Combined Code"). However, the Company
is relatively small and it is the opinion of the Directors that not all the
provisions of the Revised Combined Code are relevant or desirable for a company
of Directex Realisations' size. The Board of the Company meets regularly and
has ultimate responsibility for the management of the Company.
Approved by the Board of Directors on 29 June 2010
and signed on behalf of the Board
Nick Lander
Company Secretary
Consolidated income statement
Year to 31 December 2009
+------------------------------------+--------+--------+---------+----------+
| | Notes | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+----------+
| Continuing operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Revenue | 5 | | - | - |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Cost of sales | | | - | - |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Gross profit | | | - | - |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Administrative expenses | | | (1,337) | (1,182) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Operating loss | | | (1,337) | (1,182) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Investment revenue | 5 | | - | 76 |
+------------------------------------+--------+--------+---------+----------+
| Finance costs | 10 | | | |
+------------------------------------+--------+--------+---------+----------+
| - Interest on bank overdraft and | | | (234) | (428) |
| loans | | | | |
+------------------------------------+--------+--------+---------+----------+
| - Foreign exchange gain/(loss) on | | | 308 | (379) |
| loan payable | | | | |
+------------------------------------+--------+--------+---------+----------+
| - Unwinding of discount and | | | - | (1,330) |
| foreign exchange on deferred | | | | |
| consideration payable | | | | |
+------------------------------------+--------+--------+---------+----------+
| - Restructuring fee | | | - | (515) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Loss before tax | | | (1,263) | (3,758) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Tax | 11 | | - | - |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Loss for the year from continuing | 7 | | (1,263) | (3,758) |
| operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Discontinued operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Profit/(loss) for the year from | 12 | | 440 | (37,571) |
| discontinued operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Loss for the period | | | (823) | (41,329) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Loss attributable to equity | | | (823) | (41,329) |
| holders of the parent | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Loss per share | 13 | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| From continuing operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Basic (pence) | | | (2.5) | (7.4) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| From continuing and discontinued | | | | |
| operations | | | | |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
| Basic (pence) | | | (1.6) | (81.8) |
+------------------------------------+--------+--------+---------+----------+
| | | | | |
+------------------------------------+--------+--------+---------+----------+
Consolidated statement of comprehensive income
Year to 31 December 2009
+---------------------------------------------+--------+---------+----------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+---------------------------------------------+--------+---------+----------+
| | | | |
+---------------------------------------------+--------+---------+----------+
| Loss for the year | | (823) | (41,329) |
+---------------------------------------------+--------+---------+----------+
| | | | |
+---------------------------------------------+--------+---------+----------+
| Other comprehensive income | | | |
+---------------------------------------------+--------+---------+----------+
| Tax taken directly to equity - deferred tax | 23 | - | (195) |
+---------------------------------------------+--------+---------+----------+
| Exchange differences on translation of | | (1,729) | 7,919 |
| foreign operations | | | |
+---------------------------------------------+--------+---------+----------+
| | | | |
+---------------------------------------------+--------+---------+----------+
| Other comprehensive (loss) / income for the | | (1,729) | 7,724 |
| period | | | |
+---------------------------------------------+--------+---------+----------+
| | | | |
+---------------------------------------------+--------+---------+----------+
| Total comprehensive income for the year | | (2,552) | (33,605) |
| attributable to equity holders of the | | | |
| parent | | | |
+---------------------------------------------+--------+---------+----------+
| | | | |
+---------------------------------------------+--------+---------+----------+
Consolidated statement of financial position
At 31 December 2009
+---------------------------------------------+--------+----------+----------+
| | Notes | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Non-current assets | | | |
+---------------------------------------------+--------+----------+----------+
| Goodwill | 14 | - | 6,612 |
+---------------------------------------------+--------+----------+----------+
| Other intangible assets | 15 | - | 2,797 |
+---------------------------------------------+--------+----------+----------+
| Property, plant and equipment | 16 | - | 241 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| | | - | 9,650 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Current assets | | | |
+---------------------------------------------+--------+----------+----------+
| Trade and other receivables | 18 | 84 | 10,194 |
+---------------------------------------------+--------+----------+----------+
| Cash and cash equivalents | 18 | 488 | 3,704 |
+---------------------------------------------+--------+----------+----------+
| Current tax assets | | - | 572 |
+---------------------------------------------+--------+----------+----------+
| Assets held for sale | 12 | 11,019 | - |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| | | 11,591 | 14,470 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Total assets | | 11,591 | 24,120 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Current liabilities | | | |
+---------------------------------------------+--------+----------+----------+
| Trade and other payables | 20 | (1,114) | (9,381) |
+---------------------------------------------+--------+----------+----------+
| Provisions | 21 | (965) | (526) |
+---------------------------------------------+--------+----------+----------+
| Taxation | | - | (37) |
+---------------------------------------------+--------+----------+----------+
| Bank loans and overdrafts | 19 | (3,509) | (6,961) |
+---------------------------------------------+--------+----------+----------+
| Deferred consideration payable | | - | (2,489) |
+---------------------------------------------+--------+----------+----------+
| Liabilities directly associated with assets | 12 | (5,908) | - |
| classified as held for sale | | | |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| | | (11,496) | (19,394) |
+---------------------------------------------+--------+----------+----------+
| Non-current liabilities | | | |
+---------------------------------------------+--------+----------+----------+
| Provisions | 21 | - | (1,246) |
+---------------------------------------------+--------+----------+----------+
| Deferred tax liability | 23 | - | (833) |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| | | - | (2,079) |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Total liabilities | | (11,496) | (21,473) |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Net assets | | 95 | 2,647 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Equity | | | |
+---------------------------------------------+--------+----------+----------+
| Share capital | 24 | 202 | 202 |
+---------------------------------------------+--------+----------+----------+
| Share premium account | | 26,680 | 26,680 |
+---------------------------------------------+--------+----------+----------+
| Own shares | 25 | - | - |
+---------------------------------------------+--------+----------+----------+
| Other reserves | | 2,372 | 2,372 |
+---------------------------------------------+--------+----------+----------+
| Retained earnings | | (29,159) | (26,607) |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
| Total equity | | 95 | 2,647 |
+---------------------------------------------+--------+----------+----------+
| | | | |
+---------------------------------------------+--------+----------+----------+
Consolidated statement of changes in equity
At 31 December 2009
+---------------+----------+----------+----------+----------+----------+----------+
| | Share | Share | | Other | Retained | Total |
| | capital | Premium | Own | reserve | | GBP'000 |
| | GBP'000 | GBP'000 | shares | GBP'000 | earnings | |
| | | | GBP'000 | | GBP'000 | |
+---------------+----------+----------+----------+----------+----------+----------+
| Changes in | | | | | | |
| equity | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| (Loss) for | - | - | - | - | (41,329) | (41,329) |
| the year | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Other | - | - | - | - | 7,724 | 7,724 |
| comprehensive | | | | | | |
| income for | | | | | | |
| the period | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Total | - | - | - | - | (33,605) | (33,605) |
| comprehensive | | | | | | |
| income for | | | | | | |
| the year | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Balance at 1 | 179 | 24,475 | (529) | 2,372 | 7,269 | 33,766 |
| January 2008 | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Impairment | - | - | 527 | - | (527) | - |
| of own | | | | | | |
| shares | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Equity | 23 | 2,205 | - | - | - | 2,228 |
| shares | | | | | | |
| issued | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Share | - | - | 2 | - | - | 2 |
| options | | | | | | |
| exercised | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Share based | - | - | - | - | 256 | 256 |
| payment | | | | | | |
| transactions | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | ` | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Balance at | 202 | 26,680 | - | 2,372 | (26,607) | 2,647 |
| 31 December | | | | | | |
| 2008 | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| (Loss) for | - | - | - | - | (823) | (823) |
| the year | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Other | - | - | - | - | (1,729) | (1,729) |
| comprehensive | | | | | | |
| loss for the | | | | | | |
| period | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Total | - | - | - | - | (2,552) | (2,552) |
| comprehensive | | | | | | |
| income for | | | | | | |
| the year | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Balance at 1 | 202 | 26,680 | - | 2,372 | (26,607) | 2,647 |
| January 2009 | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| Balance at | 202 | 26,680 | - | 2,372 | (29,159) | 95 |
| 31 December | | | | | | |
| 2009 | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
| | | | | | | |
+---------------+----------+----------+----------+----------+----------+----------+
The Company acquired the entire issued share capital of Interactive Prospect
Targeting Limited pursuant to a share for share exchange on 1 December 2004.
The Other reserve reflects the difference between the nominal value of the
shares issued to acquire Interactive Prospect Targeting Limited and the
cumulative value of the Company's share capital and share premium account at the
date of acquisition.
Consolidated statement of cash flows
Year to 31 December 2009
+---------------------------------+----+-------+---------+----------+
| | | | 2009 | 2008 |
+---------------------------------+----+-------+---------+----------+
| | | | GBP'000 | GBP'000 |
+---------------------------------+----+-------+---------+----------+
| Profit for the year | | | | |
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Continuing | | | (1,263) | (3,758) |
+---------------------------------+----+-------+---------+----------+
| Discontinued | | | 440 | (37,571) |
+---------------------------------+----+-------+---------+----------+
| Adjusted for: | | | | |
+---------------------------------+----+-------+---------+----------+
| Finance expense | | | 234 | 2,273 |
+---------------------------------+----+-------+---------+----------+
| Finance income | | | - | (76) |
+---------------------------------+----+-------+---------+----------+
| (Gain)/loss arising on disposal | | | (273) | 950 |
| of discontinued operations | | | | |
+---------------------------------+----+-------+---------+----------+
| Income tax expense | | | 323 | 609 |
+---------------------------------+----+-------+---------+----------+
| Depreciation and amortisation | | | 530 | 1,837 |
+---------------------------------+----+-------+---------+----------+
| Foreign exchange revaluation | | | (308) | 379 |
| (gain)/loss | | | | |
+---------------------------------+----+-------+---------+----------+
| Share based payment expenses | | | - | 256 |
+---------------------------------+----+-------+---------+----------+
| Impairment of goodwill | | | - | 31,835 |
+---------------------------------+----+-------+---------+----------+
| Impairment of intangibles | | | - | 2,835 |
+---------------------------------+----+-------+---------+----------+
| Movement in provisions | | | (807) | 1,772 |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | (1,124) | 1,341 |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Operating cash flows before | | | | |
| movements in working capital | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Decrease in trade and other | | | 5,912 | 1,872 |
| receivables | | | | |
+---------------------------------+----+-------+---------+----------+
| Decrease in trade and other | | | (5,706) | (137) |
| payables | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Cash generated by operations | | | (918) | 3,076 |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Taxation received/(paid) | | | 535 | (1,333) |
+---------------------------------+----+-------+---------+----------+
| Interest paid | | | (477) | (428) |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Net cash from operating | | | (860) | 1,315 |
| activities | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Investing activities | | | | |
+---------------------------------+----+-------+---------+----------+
| Disposal of subsidiary | | | 2,079 | 1,328 |
+---------------------------------+----+-------+---------+----------+
| Proceeds on disposal of | | | - | 2 |
| property, plant and equipment | | | | |
+---------------------------------+----+-------+---------+----------+
| Purchases of property, plant | | | - | (419) |
| and equipment | | | | |
+---------------------------------+----+-------+---------+----------+
| Purchase of intangible fixed | | | - | (850) |
| assets | | | | |
+---------------------------------+----+-------+---------+----------+
| Interest received | | | - | 76 |
+---------------------------------+----+-------+---------+----------+
| Deferred consideration paid | | | - | (3,212) |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Net cash generated from/(used | | | 2,079 | (3,075) |
| in) investing activities | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Financing activities | | | | |
+---------------------------------+----+-------+---------+----------+
| New bank loans | | | - | (2) |
+---------------------------------+----+-------+---------+----------+
| Repayment of borrowings | | | (2,901) | - |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Net cash used in financing | | | (2,901) | (2) |
| activities | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Net decrease in cash and cash | | | (1,682) | (1,762) |
| equivalents | | | | |
+---------------------------------+----+-------+---------+----------+
| Cash and cash equivalents at | | | 3,704 | 4,710 |
| beginning of year | | | | |
+---------------------------------+----+-------+---------+----------+
| Effect of foreign exchange rate | | | (535) | 756 |
| changes | | | | |
+---------------------------------+----+-------+---------+----------+
| Cash balance held within assets | | | (999) | - |
| held for sale | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
| Cash and cash equivalents at | | | 488 | 3,704 |
| end of year | | | | |
+---------------------------------+----+-------+---------+----------+
| | | | | |
+---------------------------------+----+-------+---------+----------+
Notes forming part of the preliminary announcement
for the year ended 31 December 2009
1. General information
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 December 2009 or 2008, but is derived
from those accounts. Statutory accounts for 2008 have been delivered to the
Registrar of Companies and those for 2009 will be delivered in due course. The
auditors have reported on those accounts; their reports were unqualified, did
not draw attention to any matters by way of emphasis without qualifying their
report and did not contain statements under s498(2) or (3) Companies Act 2006.
Copies of the financial statements will be sent to shareholders shortly and will
be available from the Company's registered office, c/o Dawnay, Day Lander
Limited, York House, 74-82 Queen Victoria Street, London, EC4N 4SJ and website
at www.directex.co.uk.
2. Adoption of new and revised Standards
In the current year, the following new and revised Standards and Interpretations
have been adopted.
Standards affecting presentation and disclosure
IAS 1 (revised 2007) Presentation of Financial
Statements (effective for periods beginning on or after 1 January 2009) -
introduces changes to the titles of the main financial statements, although
their usage is not required, and the incorporation of a statement of changes in
equity in to the main financial statements. In addition, the revised Standard
requires the presentation of a third balance sheet in respect of changes in
accounting policies which are applied retrospectively on adoption of new
policies which require retrospective changes.
IFRS 8 Operating Segments
(effective for periods beginning on or after 1 January 2009) - a disclosure
Standard but not one that has resulted in a redesignation of the Group's
reportable segments (see note 6). As the changes have not impacted on the
figures in the balance sheet at 31 December 2008 nor the presentation of
segments, this has not been reproduced.
Amendments to IFRS 7 Financial Instruments: Disclosures (effective for
periods beginning on or after 1 January 2009). The amendments to IFRS 7 expand
the disclosures required in respect of fair value measurements and liquidity
risk. The Group has elected not to provide comparative information for these
expanded disclosures in the current year in accordance with the transitional
reliefs offered in these amendments.
Standards not affecting the reported results nor the financial position
Amendment to IFRS 2 Share-based Payment - Vesting
Conditions and Cancellations. The amendments clarify the definition of vesting
conditions for the purposes of IFRS 2, introduce the concept of 'non-vesting'
conditions and clarify the accounting treatment for cancellations - effective 1
January 2009.
The following new and revised Standards and Interpretations would be effective
for the current year but are not considered relevant to the group's operations:
Amendment to IAS 39 Financial Instruments: Recognition and Measurement
and IFRS 7 Financial Instruments: Disclosures
regarding reclassifications of financial assets
The following amendments were made as part of Improvements to IFRSs (2008).
Amendment to IAS 38 Intangible Assets
Amendment to IAS 40 Investment Property
IAS 23 (amended 2007) Borrowing Costs
Amendments to IAS 32 Financial Instruments: Presentation
Amendments to IAS 1 Presentation of Financial Statements - Puttable
Financial Instruments and Obligations Arising on Liquidation
Amendments to IFRIC 9
and IAS 39 Reassessment of Embedded
Derivatives and Financial Instruments: Recognition and Measurement
2. Adoption of new and revised Standards (continued)
Amendment to IAS 20 Accounting for Government Grants and Disclosure of
Government Assistance
IFRIC 13 Customer Loyalty Programmes
IFRIC 15 Agreements for the Construction of
Real Estate
IFRIC 16 Hedges of a Net Investment in a
Foreign Operation
IFRIC 18 Transfers of assets from customers
Accounting standards not yet effective
At the date of authorisation of these financial statements, the following
relevant Standards and Interpretations which have not been applied in these
financial statements were in issue but not yet effective (and in some cases had
not been adopted by the EU):
International Financial Reporting Standards (IFRS)
IFRS 3 (revised 2008) Business Combinations (effective for periods
beginning on or after 1 July 2009) -the main anticipated impact is the
requirement that all acquisition-related costs are to be expensed and will
therefore no longer form part of the cost of the investment. In addition,
changes to contingent consideration after initial recognition at fair value may
potentially be recognised through the income statement rather than as an
adjustment to goodwill.
IAS 27 (revised 2008) Consolidated and Separate Financial Statements
(effective for periods beginning on or after 1 July 2009)
Amendments to IAS 39 Financial Instruments: Recognition and Measurement
- Eligible Hedged Items (effective for periods beginning on or after 1 July
2009). The amendments provide clarification on two aspects of hedge accounting:
identifying inflation as a hedged risk or portion, and hedging with options.
IFRS 9 Financial Instruments:
Classification and Measurement (effective for periods beginning on or after 1
January 2013) - replacement of IFRS 7 and IAS 39.
IFRIC 14 Prepayments of a Minimum
Funding Requirement - effective from 1 January 2011
IFRIC 17 Distributions of Non-cash Assets to
Owners - effective from 1 July 2009
IFRIC 19 Extinguishing Financial
Liabilities with Equity Instruments - effective from 1 July 2010
With the exception of IFRS 3 (revised 2008) for acquisition-related costs and
the potential change in treatment of contingent consideration, the directors
anticipate that the adoption of these Standards and Interpretations in future
periods will have no material impact on the financial statements of the Group
except for additional disclosures when the relevant standards come into effect.
3. Accounting policies
The principal accounting policies adopted are set out below.
3. Accounting policies (continued)
Basis of accounting
The financial statements have been prepared on the historic cost basis and in
accordance with International Financial Reporting Standards (IFRS) as adopted
for use in the European Union and therefore comply with Article 4 of the EU IAS
Regulation.
Going concern
The financial statements have been prepared on a going concern basis.
The Group's French subsidiary NP6 SAS was sold during 2009. The remaining
French subsidiaries, Directinet SA and Netcollections SAS were sold in January
2010. Following the latter disposals, the Group settled a lease obligation in
respect of its London offices and repaid bank debt. The principal assets
following the Directinet and Netcollections disposals were an unquoted
investment in Webclubs Limited, and cash.
Since the appointment of the new board the ongoing costs associated with the
Group have been reduced significantly.
Basis of consolidation
The Group's consolidated financial statements incorporate the financial
statements of Directex Realisations plc (the "Company") and entities controlled
by the Company (its subsidiaries). Control is achieved where the Company has
the power to govern the financial and operating policies of an investee entity
so as to obtain benefits from its activities.
The results of subsidiaries disposed of during the year are included in the
consolidated income statement from the effective date of acquisition or up to
the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquirer, plus
any costs directly attributable to the business combination. The acquirer's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date, except for non-current assets (or disposal groups) that
are classified as held for resale in accordance with IFRS 5 Non-current Assets
Held for Sale and Discontinued Operations, which are recognised and measured at
fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquirer's identifiable assets,
liabilities and contingent liabilities exceed the cost of the business
combination, the excess is recognised immediately in profit or loss.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. Goodwill is initially recognised as an asset at
cost and is subsequently measured at cost less any accumulated impairment
losses. Goodwill, which is recognised as an asset, is reviewed for impairment
at least annually. Any impairment is recognised immediately in profit or loss
and is not subsequently reversed.
3. Accounting policies (continued)
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the previous United Kingdom Generally Accepted Accounting Principles
("UK GAAP") amounts subject to being tested for impairment at that date.
Acquisition related intangible assets and other intangible assets
Acquisition related intangible assets, which comprise of existing unfulfilled
orders at acquisition date, non-contractual customer relationships and trade
names, relate to identifiable assets that meet the conditions for recognition
under IFRS 3 at the acquisition date.
Other intangible assets, which comprise of licences, computer software and data
acquisition costs, are stated at cost, net of amortisation and any recognised
impairment loss. Computer software is amortised over two years. Data acquisition
costs comprise the external purchase costs of data used by customers for
marketing purposes and are amortised over three years.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets less
residual value, over their estimated useful lives, using the straight-line
method, on the following basis:
+----------------------------+----------------------+
| Computer equipment | 33% on cost |
+----------------------------+----------------------+
| Plant and equipment | 20% on cost |
+----------------------------+----------------------+
Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets or, where shorter, over the term of the
relevant lease.
Internally-generated intangible assets
Expenditure on research activities is recognised as an expense in the period in
which it is incurred.
An internally-generated intangible asset arising from the Group's website
developments is recognised only if all of the following conditions are met:
· an asset is created that can be identified (such as software and new
processes);
· it is probable that the asset created will generate future economic
benefits; and
· the development costs of the asset can be measured reliably.
Internally-generated intangible assets are amortised on a straight-line basis
over their useful lives. Where no internally-generated intangible asset can be
recognised, development expenditure is recognised as an expense in the period in
which it is incurred.
3. Accounting policies (continued)
Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the
lease obligation so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
Rentals payable under operating leases are charged to income on a straight-line
basis over the term of the relevant lease. Benefits received and receivable as
an incentive to enter into an operating lease are also spread on a straight-line
basis over the lease term.
Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales related
taxes.
Sales of goods are recognised when goods are delivered and title has passed.
Revenue is recognised when the significant risks and rewards associated with
ownership of the goods have been transferred. Sales of services are recognised
with reference to the stage of completion.
Foreign currencies
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each Group company are expressed in Pounds
Sterling, which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements.
In preparing the financial statement of the individual companies, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period, except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's foreign operations are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are translated
at the average exchange rates for the period. Exchange differences arising are
classified as equity and transferred to the Group's translation reserve. Such
translation differences are recognised as income or as expenses in the period in
which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
3. Accounting policies (continued)
Operating profit
Operating profit is stated before investment income and finance costs.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally 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 the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that 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 interests 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.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it related to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and where 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.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss, if any. Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and 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 which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be
less than its carrying amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable amount and the impairment
loss is recognised as an expense immediately.
3. Accounting policies (continued)
When an impairment loss subsequently reverses, the carrying amount of the asset
or cash-generating unit is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset or cash-generating unit in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
instrument.
Trade receivables
Trade receivables do not carry any interest and are measured at their nominal
value as reduced by any appropriate allowances for irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges are accounted for on an
accruals basis in profit or loss using the effective interest rate method and
are added to the carrying amount of the instrument to the extent that they are
not settled in the period in which they arise.
Trade payables
Trade payables are not interest bearing and are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
Provisions
Provisions are recognised when the Group has a present obligation as a result of
a past event and it is probable that the Group will be required to settle that
obligation. Provisions are measured at the Directors' best estimate of the
expenditure required to settle the obligation at the balance sheet date and are
discounted to present value where the effect is material.
Hedges of net investments in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to
cash flow hedges. Any gain or loss on the hedging instrument relating to the
effective portion of the hedge is recognised in equity in the foreign currency
translation reserve. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss, and is included in the 'finance costs'
line of the income statement.
Gains and losses deferred in the foreign currency translation reserve are
recognised in profit or loss on disposal of the foreign operation.
3. Accounting policies (continued)
Share-based payments
The Group has applied the requirements of IFRS 2 Share-based payments. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of equity instruments after 7 November 2002 that were unvested at 1
January 2005.
The Group operates a number of equity-settled share-based payment schemes under
which share options are issued to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Group's estimate of
shares that will eventually vest and adjusted for the effect of non market-based
vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are
measured at the lower of carrying amount and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in
its present condition. Management must be committed to the sale which should be
expected to qualify for recognition as a completed sale within one year from the
date of classification.
4. Critical accounting judgements and key sources of estimation
uncertainty
The key assumption concerning the future and other key sources of estimation
uncertainty at the balance sheet date, that has a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the
next financial year, is discussed below. The judgement used by management in the
application of the Group's policies in respect of this key area of estimation is
considered to be the most significant.
Provision for Restructuring
Provisions made represent the best estimate of obligations at the balance sheet
date. The provision for onerous lease commitments has been calculated at the
net present value of rents payable less expected rents receivable (having taken
account of potential void periods and lease incentives) up to the break date of
the lease. Allowances have also been made for empty rates and agent's fees.
5. Revenue
An analysis of the Group's revenue is as follows:
Year ended 31 December 2009
+------------------------------------+------------+----------+--------------+
| | Continuing | | Discontinued |
| | operations | Total | operations |
+------------------------------------+------------+----------+--------------+
| | 2009 | 2009 | 2009 |
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
| Revenue from the supply of online | - | - | 14,997 |
| direct marketing products and | | | |
| services | | | |
+------------------------------------+------------+----------+--------------+
| Investment revenue | - | - | - |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
| Total | - | - | 14,997 |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
5. Revenue (continued)
Year ended 31 December 2008
+------------------------------------+------------+----------+--------------+
| | Continuing | | Discontinued |
| | operations | Total | operations |
+------------------------------------+------------+----------+--------------+
| | 2008 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
| Revenue from the supply of online | - | - | 32,522 |
| direct marketing products and | | | |
| services | | | |
+------------------------------------+------------+----------+--------------+
| Investment revenue | 76 | 76 | - |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
| Total | 76 | 76 | 32,522 |
+------------------------------------+------------+----------+--------------+
| | | | |
+------------------------------------+------------+----------+--------------+
6. Segmental information
Business segments
Segmental information is presented in respect of the Group's primary business
segments.
Segmental results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Continuing operations comprise mainly head office expenses.
Segmental capital expenditure is the total cost incurred during the year to
acquire property, plant and equipment, and intangible assets other than goodwill
and those arising on business combinations.
In prior periods, the Group comprised of two main business segments, based on
geographical location - the United Kingdom and France. These divisions were the
basis on which the Group reported its primary management information. In 2008,
all UK trading segments were disposed of and all French trading segments were
disposed of or held for sale in 2009 and have been reclassified as discontinued
segments. The group currently has no trading segments and its activities are
investment management and management services.
Results - year ended 31 December 2009
+--------------------------------------------+------------+--------------+
| | | Discontinued |
| | Continuing | operations |
| | operations | (Note 12) |
| | GBP'000 | GBP'000 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Revenue | - | 14,997 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Operating (loss)/profit from operations | (1,337) | 490 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Investment revenue (note 5) | - | - |
+--------------------------------------------+------------+--------------+
| Gain on disposal | - | 273 |
+--------------------------------------------+------------+--------------+
| Finance income (note 10) | 74 | - |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| (Loss)/profit for the year before taxation | (1,263) | 763 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Taxation | - | (323) |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| (Loss)/profit for the year | (1,263) | 440 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
6. Segmental information (continued)
Results - year ended 31 December 2008
+--------------------------------------------+------------+--------------+
| | | Discontinued |
| | Continuing | operations |
| | operations | (Note 12) |
| | GBP'000 | GBP'000 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Revenue | - | 32,522 |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Operating loss from operations | (1,182) | (8,271) |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Investment revenue (note 5) | 76 | - |
+--------------------------------------------+------------+--------------+
| Loss on disposal | - | (28,691) |
+--------------------------------------------+------------+--------------+
| Finance costs (note 10) | (2,652) | - |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Loss for the year before taxation | (3,758) | (36,962) |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Taxation | - | (609) |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
| Loss for the year | (3,758) | (37,571) |
+--------------------------------------------+------------+--------------+
| | | |
+--------------------------------------------+------------+--------------+
7. Loss for the year
Loss for the year has been arrived at after charging/(crediting):
+------------------------------------------+------------+--------------+---------+
| Year ended 31 December 2009 | Continuing | Discontinued | Total |
| | operations | operations | |
+------------------------------------------+------------+--------------+---------+
| | 2009 | 2009 | 2009 |
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+------------+--------------+---------+
| Foreign exchange gain | (308) | - | (308) |
+------------------------------------------+------------+--------------+---------+
| | | | |
+------------------------------------------+------------+--------------+---------+
| Amortisation of intangible assets (note | - | 530 | 530 |
| 15) | | | |
+------------------------------------------+------------+--------------+---------+
| Staff costs (see note 9) | 532 | 5,274 | 5,806 |
+------------------------------------------+------------+--------------+---------+
| | | | |
+------------------------------------------+------------+--------------+---------+
7. Loss for the year (continued)
+------------------------------------------+------------+--------------+---------+
| Year ended 31 December 2008 | Continuing | Discontinued | Total |
| | operations | operations | |
+------------------------------------------+------------+--------------+---------+
| | 2008 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+------------+--------------+---------+
| | | | |
+------------------------------------------+------------+--------------+---------+
| Foreign exchange losses | 379 | - | 379 |
+------------------------------------------+------------+--------------+---------+
| | | | |
+------------------------------------------+------------+--------------+---------+
| Loss on disposal of tangible assets | - | 473 | 473 |
+------------------------------------------+------------+--------------+---------+
| Impairment of tangible assets (note 16) | - | 247 | 247 |
+------------------------------------------+------------+--------------+---------+
| Depreciation on property, plant and | - | 440 | 440 |
| equipment (note 16) | | | |
+------------------------------------------+------------+--------------+---------+
| Loss on disposal of other intangible | - | 43 | 43 |
| assets (note 15) | | | |
+------------------------------------------+------------+--------------+---------+
| Amortisation of intangible assets (note | - | 1,397 | 1,397 |
| 15) | | | |
+------------------------------------------+------------+--------------+---------+
| Impairment of intangible assets (note | - | 2,588 | 2,588 |
| 15) | | | |
+------------------------------------------+------------+--------------+---------+
| Impairment of goodwill (note 14) | - | 31,835 | 31,835 |
+------------------------------------------+------------+--------------+---------+
| Staff costs (see note 9) | 365 | 12,249 | 12,614 |
+------------------------------------------+------------+--------------+---------+
| | | | |
+------------------------------------------+------------+--------------+---------+
8. Auditors' remuneration
The analysis of auditors' remuneration is as follows:
+----------------------------------------------+--+----+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| Fees payable to the Company's auditors for | | | 30 | 60 |
| the audit of the Company's annual accounts | | | | |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| Fees payable to the Company's auditors and | | | | 103 |
| their associates for the audit of the | | | 5 | |
| Company's subsidiaries pursuant to | | | | |
| legislation | | | | |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| Total audit fees | | | 35 | 163 |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| Fees payable to the Company's auditors and | | | | |
| their associates for other services to the | | | | |
| Group: | | | | |
+----------------------------------------------+--+----+---------+---------+
| - Tax services | | | 33 | 98 |
+----------------------------------------------+--+----+---------+---------+
| - Transaction services | | | - | 11 |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| | | | 68 | 109 |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
| | | | 68 | 272 |
+----------------------------------------------+--+----+---------+---------+
| | | | | |
+----------------------------------------------+--+----+---------+---------+
9. Staff costs
The average monthly number of employees (including executive directors) for the
continuing operations was:
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | No. | No. |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Administration | | | 6 | 5 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Wages and salaries | | | 446 | 311 |
+------------------------------------+--------+--------+---------+---------+
| Social security costs | | | 86 | 54 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | 532 | 365 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
Directors' emoluments were as follows:
+-----------------------------------+-------+-------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+-----------------------------------+-------+-------+---------+---------+
| | | | | |
+-----------------------------------+-------+-------+---------+---------+
| Nicholas Ward | | | 190 | 148 |
+-----------------------------------+-------+-------+---------+---------+
| David Cicurel | | | 30 | 30 |
+-----------------------------------+-------+-------+---------+---------+
| Barton L. Faber | | | 25 | - |
+-----------------------------------+-------+-------+---------+---------+
| Stephane Zittoun | | | 13 | 55 |
+-----------------------------------+-------+-------+---------+---------+
| Martin Kiersnowski | | | 104 | - |
+-----------------------------------+-------+-------+---------+---------+
| | | | | |
+-----------------------------------+-------+-------+---------+---------+
| | | | 362 | 233 |
+-----------------------------------+-------+-------+---------+---------+
| | | | | |
+-----------------------------------+-------+-------+---------+---------+
Stephane Zittoun was not remunerated by the Company for his services as a
director of Directex Realisations plc in 2009. His services were paid for by
NP6, for his services to that company.
10. Finance costs
+---------------------------------------------+--------+---------+---------+
| | | Continuing |
| | | Operations |
+---------------------------------------------+--------+-------------------+
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+---------------------------------------------+--------+---------+---------+
| | | | |
+---------------------------------------------+--------+---------+---------+
| Interest on bank overdrafts and loans | | 234 | 428 |
+---------------------------------------------+--------+---------+---------+
| Foreign exchange (gain)/loss on loan | | (308) | 379 |
| payable | | | |
+---------------------------------------------+--------+---------+---------+
| Foreign exchange loss on deferred | | - | 978 |
| consideration payable | | | |
+---------------------------------------------+--------+---------+---------+
| Interest accretion on deferred | | - | 352 |
| consideration payable | | | |
+---------------------------------------------+--------+---------+---------+
| Restructuring fee | | - | 515 |
+---------------------------------------------+--------+---------+---------+
| | | | |
+---------------------------------------------+--------+---------+---------+
| | | (74) | 2,652 |
+---------------------------------------------+--------+---------+---------+
| | | | |
+---------------------------------------------+--------+---------+---------+
11. Taxation
The tax charge comprises:
+---------------------------------------------+--------+-----------+-----------+
| | | Continuing |
| | | Operations |
+---------------------------------------------+--------+-----------------------+
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
| Current tax | | - | - |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
| | | - | - |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
| Origination and reversal of timing | | - | - |
| differences | | | |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
| | | - | - |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
| Total tax charge on loss on ordinary | | - | - |
| activities from continuing operations | | | |
+---------------------------------------------+--------+-----------+-----------+
| | | | |
+---------------------------------------------+--------+-----------+-----------+
The UK corporation tax rate is 28% (2008: 28% changed in April 2008). The
average rate for the year was 28%. Taxation for France is calculated at the
rates prevailing in France.
Reconciliation of tax charge:
+------------------------------------+------------------------------------+--------+---------+---------+
| | 2009 | 2009 | 2008 | 2008 |
+ +------------------------------------+--------+---------+---------+
| | GBP'000 | % | GBP'000 | % |
+------------------------------------+------------------------------------+--------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Loss on ordinary activities before | (1,263) | | (3,785) | |
| tax | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Tax at the UK corporation tax rate | 354 | 28% | 1,079 | 28.5% |
| of 28.5% | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Effects of: | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Tax effect of expenses that are | (280) | (22%) | (928) | (24.5%) |
| not deductible in determining | | | | |
| taxable profit | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Effect of different tax rates in | - | - | (151) | (4%) |
| subsidiary operating in other | | | | |
| jurisdictions | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Creation of losses | (74) | (6%) | - | - |
+------------------------------------+------------------------------------+--------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
| Tax charge for period | - | - | - | - |
+------------------------------------+------------------------------------+--------+---------+---------+
| | | | | |
+------------------------------------+------------------------------------+--------+---------+---------+
12. Discontinued operations
The results of the discontinued operations, which have been included in the
consolidated income statement, were as follows:
+-------------------------------------------+-------+----------+----------+
| | | Year | Year |
| | | ended | ended |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+-------------------------------------------+-------+----------+----------+
| | | | |
+-------------------------------------------+-------+----------+----------+
| Revenue | | 14,997 | 32,522 |
+-------------------------------------------+-------+----------+----------+
| Expenses | | (14,507) | (40,793) |
+-------------------------------------------+-------+----------+----------+
| | | | |
+-------------------------------------------+-------+----------+----------+
| Profit/(loss) before tax | | 490 | (8,271) |
+-------------------------------------------+-------+----------+----------+
| Attributable tax credit | | (323) | (609) |
+-------------------------------------------+-------+----------+----------+
| Gain/(loss) on disposal of discontinued | | 273 | (28,691) |
| operations (note 26) | | | |
+-------------------------------------------+-------+----------+----------+
| | | | |
+-------------------------------------------+-------+----------+----------+
| Net profit/(loss) attributable to | | 440 | (37,571) |
| discontinued operations | | | |
+-------------------------------------------+-------+----------+----------+
| | | | |
+-------------------------------------------+-------+----------+----------+
Discontinued operations include the businesses sold during the year (more fully
disclosed in note 26) and the profit/(loss) on sale reported by the Group, along
with the results of those businesses sold after the year end.
During the year, discontinued operations contributed GBP183,000 (2008:
GBP334,000) to the Group's net operating cash flows and GBP2,079,000 (2008:
GBP537,000) in respect of investing activities. Financing activities from
discontinued operations were GBPnil (2008: GBPnil).
The effect of discontinued operations on segment results is disclosed in note 6.
On 11 December 2009 the Group reached agreement with Bisnode AB for the sale of
Directinet and Netcollections, subject to a number of conditions. Completion of
the disposal was on 6 January 2010.
The proceeds on disposal less costs to sell were in line with the book value of
the related net assets and accordingly no further goodwill impairment losses
have been recognised on classification of these operations as held for sale.
The major classes of assets and liabilities comprising the operations classified
as held for sale are as follows:
+-------------------------------------------------+---------+---------+
| | | GBP'000 |
+-------------------------------------------------+---------+---------+
| Goodwill | | 4,450 |
+-------------------------------------------------+---------+---------+
| Other intangible assets | | 1,167 |
+-------------------------------------------------+---------+---------+
| Trade and other receivables | | 4,198 |
+-------------------------------------------------+---------+---------+
| Property, plant and equipment | | 205 |
+-------------------------------------------------+---------+---------+
| Cash and cash equivalents | | 999 |
+-------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------+---------+---------+
| Total assets classified as held for sale | | 11,019 |
+-------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------+---------+---------+
| Trade and other payables | | (5,050) |
+-------------------------------------------------+---------+---------+
| Tax liabilities | | (858) |
+-------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------+---------+---------+
| Total liabilities directly associated with | | |
| assets classified as held for sale | | (5,908) |
+-------------------------------------------------+---------+---------+
| | | |
+-------------------------------------------------+---------+---------+
13. (Loss)/earnings per share
+--------------------------+---------+---------+---------+----------+---------+---------+
| | 2009 | 2008 |
+--------------------------+-----------------------------+------------------------------+
| | Profit/ | Number | Pence | Profit/ | Number | Pence |
| | (loss) | of | per | (loss) | of | per |
| | | shares | share | | shares | share |
+--------------------------+---------+---------+---------+----------+---------+---------+
| | GBP'000 | '000 | | GBP'000 | '000 | |
+--------------------------+---------+---------+---------+----------+---------+---------+
| | | | | | | |
+--------------------------+---------+---------+---------+----------+---------+---------+
| Basic (loss)/earnings | (823) | 50,518 | (1.6) | (41,329) | 50,518 | (81.8) |
| per share | | | | | | |
+--------------------------+---------+---------+---------+----------+---------+---------+
| from continuing | (1,263) | - | (2.5) | (3,758) | - | (7.4) |
| operations | | | | | | |
+--------------------------+---------+---------+---------+----------+---------+---------+
| from discontinued | 440 | - | 0.9 | (37,571) | - | (74.4) |
| operations | | | | | | |
+--------------------------+---------+---------+---------+----------+---------+---------+
14. Goodwill
+------------------------------------+--------+--------+--------+----------+
| | | | | Total |
| | | | | GBP'000 |
+------------------------------------+--------+--------+--------+----------+
| Cost | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 1 January 2008 | | | | 31,225 |
+------------------------------------+--------+--------+--------+----------+
| Adjustment to deferred | | | | (803) |
| consideration | | | | |
+------------------------------------+--------+--------+--------+----------+
| Exchange differences | | | | 8,243 |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 1 January 2009 | | | | 38,665 |
+------------------------------------+--------+--------+--------+----------+
| Classified as held for sale | | | | (26,022) |
+------------------------------------+--------+--------+--------+----------+
| Disposals during the year | | | | (12,643) |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 31 December 2009 | | | | - |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| Accumulated impairment losses | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 1 January 2008 | | | | 218 |
+------------------------------------+--------+--------+--------+----------+
| Impairment losses for the year | | | | 31,835 |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 1 January 2009 | | | | 32,053 |
+------------------------------------+--------+--------+--------+----------+
| Classified as held for sale | | | | (21,572) |
+------------------------------------+--------+--------+--------+----------+
| Disposals during the year | | | | (10,481) |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 31 December 2009 | | | | - |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| Carrying amount | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 31 December 2009 | | | | - |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
| At 31 December 2008 | | | | 6,612 |
+------------------------------------+--------+--------+--------+----------+
| | | | | |
+------------------------------------+--------+--------+--------+----------+
Goodwill relating to Directinet and NP6 has been classified as assets held for
sale and disposed of respectively. Formal agreements were in place as at 31
December 2009 for the disposal of these businesses.
15. Other intangible assets
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | Acquisition related | Other intangible assets | |
| | intangible assets | | |
+---------------+------------------------------------------+-----------------------------------------+---------+
| | Customer | Trade | Forward | Software | Website | Data | Licences | Software | Total |
| | relations | names | orders | | costs | costs | | assets | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Cost | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 1 January | 3,879 | 275 | 282 | 147 | 334 | 4,590 | 19 | 871 | 10,397 |
| 2008 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| On | - | - | - | - | 62 | 636 | - | 152 | 850 |
| acquisition | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Additions | - | - | - | - | - | - | - | (221) | (221) |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Impairment | (698) | (93) | - | - | (200) | (1,562) | - | (35) | (2,588) |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Exchange | - | - | - | - | - | 11 | - | 26 | 37 |
| differences | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 1 January | 3,181 | 182 | 282 | 147 | 196 | 3,675 | 19 | 793 | 8,475 |
| 2009 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Classified as | (1,930) | (111) | (172) | (90) | (196) | (3,675) | (19) | (793) | (6,986) |
| held for sale | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Eliminated on | (1,251) | (71) | (110) | (57) | - | - | - | - | (1,489) |
| disposal | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 31 | - | - | - | - | - | - | - | - | - |
| December 2009 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Amortisation | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 1 January | 747 | 49 | 89 | 5 | 136 | 2,794 | 19 | 607 | 4,446 |
| 2008 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Charge for | 399 | 30 | 58 | 10 | 60 | 657 | - | 183 | 1,397 |
| the year | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Eliminated on | - | - | | | | | | (178) | |
| disposal | | | - | - | - | - | - | | (178) |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Exchange | - | - | - | - | - | 5 | - | 8 | 13 |
| differences | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 1 January | 1,146 | 79 | 147 | 15 | 196 | 3,456 | 19 | 620 | 5,678 |
| 2009 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Charge for | 152 | 20 | 35 | 10 | - | 219 | - | 94 | 530 |
| the year | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Classified as | (985) | (72) | (136) | (22) | (196) | (3,675) | (19) | (714) | (5,819) |
| held for sale | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Eliminated on | (313) | (27) | (46) | (3) | - | - | - | - | (389) |
| disposal | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 31 | - | - | - | - | - | - | - | - | - |
| December 2009 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| Net book | | | | | | | | | |
| value | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 31 | - | - | - | - | - | - | - | - | - |
| December 2009 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| At 31 | 2,035 | 103 | 135 | 132 | - | 219 | - | 173 | 2,797 |
| December 2008 | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
| | | | | | | | | | |
+---------------+-----------+---------+---------+----------+---------+---------+----------+----------+---------+
Intangibles relating to Directinet and NP6 has been classified as assets held
for sale and disposed of respectively. Formal agreements were in place as at 31
December 2009 for the disposal of these businesses.
16. Property, plant and equipment
+------------------------------------+--------+-----------+-----------+---------+
| | | Plant | Computer | Total |
| | | and | equipment | |
| | | equipment | | |
+------------------------------------+--------+-----------+-----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+--------+-----------+-----------+---------+
| Cost | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 1 January 2008 | | 554 | 1,846 | 2,400 |
+------------------------------------+--------+-----------+-----------+---------+
| Acquired on acquisition | | 189 | 230 | 419 |
+------------------------------------+--------+-----------+-----------+---------+
| Additions | | (251) | (1,033) | (1,284) |
+------------------------------------+--------+-----------+-----------+---------+
| Disposals | | (196) | (51) | (247) |
+------------------------------------+--------+-----------+-----------+---------+
| Exchange differences | | 18 | 108 | 126 |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 1 January 2009 | | 314 | 1,100 | 1,414 |
+------------------------------------+--------+-----------+-----------+---------+
| Disposals | | (47) | (165) | (212) |
+------------------------------------+--------+-----------+-----------+---------+
| Reclassified as held for sale | | (267) | (935) | (1,202) |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 31 December 2009 | | - | - | - |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| Accumulated depreciation | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 1 January 2008 | | 206 | 1,245 | 1,451 |
+------------------------------------+--------+-----------+-----------+---------+
| Charge for the year | | 97 | 343 | 440 |
+------------------------------------+--------+-----------+-----------+---------+
| Eliminated on disposal | | (103) | (631) | (734) |
+------------------------------------+--------+-----------+-----------+---------+
| Exchange differences | | 5 | 11 | 16 |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 1 January 2009 | | 205 | 968 | 1,173 |
+------------------------------------+--------+-----------+-----------+---------+
| Eliminated on disposal | | (30) | (146) | (176) |
+------------------------------------+--------+-----------+-----------+---------+
| Reclassified as held for sale | | (175) | (822) | (997) |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 31 December 2009 | | - | - | - |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| Net book value | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 31 December 2009 | | - | - | - |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
| At 31 December 2008 | | 109 | 132 | 241 |
+------------------------------------+--------+-----------+-----------+---------+
| | | | | |
+------------------------------------+--------+-----------+-----------+---------+
17. Subsidiaries
All principal subsidiaries of the Group are consolidated into the financial
statements. At 31 December 2009 the subsidiaries were as follows (names of
continuing subsidiaries are the names as at the date of these financial
statements):
+---------------------+--------------+---------------+----------+-------+
| Subsidiary | Country | Principal | Holding | % |
| undertakings | of | activity | | |
| |registration | | | |
+---------------------+--------------+---------------+----------+-------+
| | | | | |
+---------------------+--------------+---------------+----------+-------+
| Direct Excellence | UK | Intermediate | Ordinary | 100% |
| Limited | | holding | shares | |
| | | company | | |
+---------------------+--------------+---------------+----------+-------+
| Directinet SA* | France | Online Direct | Ordinary | 100% |
| | | Marketing | shares | |
+---------------------+--------------+---------------+----------+-------+
| Netcollections SAS | France | Online Direct | Ordinary | 100% |
| * | | Marketing | shares | |
+---------------------+--------------+---------------+----------+-------+
| Netcollections | UK | Dormant | Ordinary | 100% |
| Limited* | | | shares | |
+---------------------+--------------+---------------+----------+-------+
| Direct Dormant No. | UK | Dormant | Ordinary | 100% |
| 1 Limited | | | shares | |
+---------------------+--------------+---------------+----------+-------+
| Direct Dormant No. | UK | Dormant | Ordinary | 100% |
| 2 Limited * | | | shares | |
+---------------------+--------------+---------------+----------+-------+
| Emailbureau Ltd* | UK | Dormant | Ordinary | 100% |
| | | | shares | |
+---------------------+--------------+---------------+----------+-------+
| Direct Dormant No. | UK | Dormant | Ordinary | 100% |
| 4 Limited | | | shares | |
+---------------------+--------------+---------------+----------+-------+
| | | | | |
+---------------------+--------------+---------------+----------+-------+
| *Held through subsidiary undertaking. |
+---------------------+--------------+---------------+----------+-------+
18. Other financial assets
Trade and other receivables
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Trade receivables | | | - | 9,399 |
+------------------------------------+--------+--------+---------+---------+
| Provision for doubtful debts | | | - | (456) |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | - | 8,943 |
+------------------------------------+--------+--------+---------+---------+
| Other debtors | | | - | 100 |
+------------------------------------+--------+--------+---------+---------+
| Prepayments and accrued income | | | 20 | 861 |
+------------------------------------+--------+--------+---------+---------+
| VAT recoverable | | | 64 | 290 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | 84 | 10,194 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
Ageing of past due debt but not impaired receivables
Total trade receivables held by the Group at 31 December 2009 amounted to GBPnil
(2008: GBP9.4m). Included in the group's 2008 trade receivable balance were
debtors with a carrying amount of GBP2.6m which were past due at the reporting
date for which the group had not provided as there had not been a significant
change in credit quality and the amounts were still considered recoverable. The
group did not hold any collateral over these balances.
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| 30-60 days | | | - | 1,228 |
+------------------------------------+--------+--------+---------+---------+
| 60-90 days | | | - | 884 |
+------------------------------------+--------+--------+---------+---------+
| 90+ days | | | - | 493 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Total | | | - | 2,605 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
Movement in the provision for doubtful debts
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Balance at the beginning of the | | | 456 | 583 |
| year | | | | |
+------------------------------------+--------+--------+---------+---------+
| Exchange differences | | | - | 20 |
+------------------------------------+--------+--------+---------+---------+
| Charge to the income statement in | | | - | 315 |
| the current year | | | | |
+------------------------------------+--------+--------+---------+---------+
| Amounts recovered during the year | | | - | (53) |
+------------------------------------+--------+--------+---------+---------+
| Impairment losses reversed | | | (456) | (409) |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Balance at the end of the year | | | - | 456 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
In determining the recoverability of a trade receivable the Group considers any
change in the credit quality of the trade receivable from the date credit was
initially granted up to the reporting date. The concentration of credit risk is
limited due to the customer base being large and unrelated. Accordingly, the
Directors believe that there is no further credit provision required in excess
of the provision for doubtful debts.
18. Other financial assets (continued)
Ageing of impaired trade receivables
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| 30-60 days | | | - | 11 |
+------------------------------------+--------+--------+---------+---------+
| 60-90 days | | | - | 51 |
+------------------------------------+--------+--------+---------+---------+
| 90+ days | | | - | 510 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Total | | | - | 572 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
The Directors consider that the carrying amount of trade and other receivables
approximates their fair value.
Cash and cash equivalents
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Cash and cash equivalents | | | 488 | 3,704 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The Directors
consider that the carrying amount of these assets approximates their fair value.
19. Borrowings
+---------------------------------------+--+---------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+---------------------------------------+--+---------+---------+---------+
| Secured borrowing at amortised cost | | | | |
+---------------------------------------+--+---------+---------+---------+
| Bank loans due for settlement within | | | 3,509 | 6,961 |
| 12 months | | | | |
+---------------------------------------+--+---------+---------+---------+
| | | | | |
+---------------------------------------+--+---------+---------+---------+
Following the NP6 settlement, a total of EUR3.25m was repaid in the year, reducing
the principal loan amount to EUR3.9m. As a result of this reduction the interest
rate on the outstanding debt has been reduced from 5% to 2.5% above Euribor.
In January 2010, the remaining loan balance was fully repaid from the proceeds
of sale of Directinet and Netcollections.
20. Trade and other payables
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Current | | | | |
+------------------------------------+--------+--------+---------+---------+
| Trade payables | | | 573 | 2,834 |
+------------------------------------+--------+--------+---------+---------+
| Other taxation and social security | | | - | 1,773 |
+------------------------------------+--------+--------+---------+---------+
| Other payables | | | - | 760 |
+------------------------------------+--------+--------+---------+---------+
| Accruals and deferred income | | | 541 | 4,014 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | 1,114 | 9,381 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
The Directors consider the carrying amount of trade payables approximates to
their fair value.
21. Provisions
+---------------------------------------------+--------+------------+---------+
| Restructuring Provision | | | GBP'000 |
+---------------------------------------------+--------+------------+---------+
| | | | |
+---------------------------------------------+--------+------------+---------+
| As at 1 January 2009 | | | 1,772 |
+---------------------------------------------+--------+------------+---------+
| Utilisation of provision in the year | | | (807) |
+---------------------------------------------+--------+------------+---------+
| | | | |
+---------------------------------------------+--------+------------+---------+
| At 31 December 2009 | | | 965 |
+---------------------------------------------+--------+------------+---------+
| | | | |
+---------------------------------------------+--------+------------+---------+
| Included in current liabilities | | | 965 |
+---------------------------------------------+--------+------------+---------+
| | | | |
+---------------------------------------------+--------+------------+---------+
On 11 December 2009 the Company agreed terms with the landlord of the Group's
head offices in London under which the Group acquired an option to assign the
London leases to the landlord's ultimate parent company shortly after the
completion of the proposed sale of Directinet and Netcollections, thereby
extinguishing all the Group's obligations under those leases. The net cost of
these assignments was approximately GBP965,000 which was satisfied out of the
sale proceeds of Directinet and Netcollections in January 2010.
22. Financial instruments
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able
to continue as a going concern while maximising the return to stakeholders
through the optimisation of the debt and equity balance. The capital structure
of the Group consists of debt, which includes the borrowings, cash and cash
equivalents and equity attributable to equity holders of the parent, comprising
issued capital, reserves and retained earnings, all as disclosed in the
statement of financial position.
Gearing ratio
The gearing ratio at the year end was as follows:
+----------------------------------------------+-----------------------+-----------------------+
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------------------------------+-----------------------+-----------------------+
| | | |
+----------------------------------------------+-----------------------+-----------------------+
| Debt | 3,509 | 6,961 |
+----------------------------------------------+-----------------------+-----------------------+
| Cash and cash equivalents | (488) | (3,704) |
+----------------------------------------------+-----------------------+-----------------------+
| | | |
+----------------------------------------------+-----------------------+-----------------------+
| Net debt | 3,021 | 3,257 |
+----------------------------------------------+-----------------------+-----------------------+
| | | |
+----------------------------------------------+-----------------------+-----------------------+
| Equity | 605 | 2,647 |
+----------------------------------------------+-----------------------+-----------------------+
| | | |
+----------------------------------------------+-----------------------+-----------------------+
| Net debt to equity ratio | 499% | 123% |
+----------------------------------------------+-----------------------+-----------------------+
| | | |
+----------------------------------------------+-----------------------+-----------------------+
Debt is defined as borrowings, as detailed in note 19.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including
the criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 3 to the
financial statements.
Financial risk management objectives
The Group monitors risks include market risk, credit risk and liquidity risk.
Market risk
The Group's activities expose it primarily to the financial risks of changes in
foreign currency exchange rates. The Group has historically entered into net
investment hedges to manage its exposure to foreign currency risk arising on
translation of the Group's borrowings. The Group's requirement for this has
diminished following the reduction in activities undertaken in foreign currency
and the repayment of its borrowings.
22. Financial instruments (continued)
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies.
Hence, exposures to exchange rate fluctuations arise.
The Group's approach to managing this exposure is to fund investments in
Euro-denominated operations with debt that is denominated in the same currency
as the operations. Refer to note 19 for further information on the bank loan.
Foreign currency sensitivity analysis
The Group is mainly exposed to the currency of France (Euro currency).
At 31 December 2009 the net assets of the Group were GBP95,000 (2008:
GBP2,647,000) of which GBP5,111,000 were denominated in Euros (2008:
GBP8,805,000).
The effect of a 5% increase in the value of the Euro compared to Sterling would
increase the net assets of the Group as at 31 December 2009 by GBP255,000 (2008:
GBP440,000). The effect of a 5% decrease in the value of the Euro compared to
Sterling would decrease the net assets of the Group as at 31 December 2009 by
GBP255,000 (2008: GBP440,000).
Interest rate risk management
The Group is exposed to interest rate risk as entities in the Group borrow funds
at Euribor plus 2.5%.
The Group's exposures to interest rates on financial assets and financial
liabilities are detailed in the liquidity risk management section of this note.
The sensitivity analyses below have been determined based on the exposure to
interest rates for both derivatives and non-derivative instruments during the
year.
+---------------------------------------------+------------------------------+---------------------+
| | Increase/(decrease) in |
| | profit before tax |
+---------------------------------------------+----------------------------------------------------+
| | Group | Group |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+---------------------------------------------+------------------------------+---------------------+
| | | |
+---------------------------------------------+------------------------------+---------------------+
| Increase interest rate by 1% | 52 | 59 |
+---------------------------------------------+------------------------------+---------------------+
| Decrease interest rate by 1% | (52) | (59) |
+---------------------------------------------+------------------------------+---------------------+
| | | |
+---------------------------------------------+------------------------------+---------------------+
There would have been no effect on amounts recognised directly in equity.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in a financial loss to the Group.
The Group's maximum exposure to credit risk is GBP552,000 (2008: GBP13,795,000)
comprising trade receivables, other receivables and cash. The Group has no
principal credit risk as trade receivables are nil (2008: GBP8,943,000,
principal risk being trade receivables).
Potential customers are evaluated for creditworthiness and where necessary
collateral is secured. There is no particular industry concentration of credit
risk within the customer base as no one customer accounts for more than 3% of
gross receivables.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Group's short, medium and long-term funding and
liquidity management requirements on an appropriate basis. The Group manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities. In January 2010, the group sold its remaining trading
segment and repaid in full all loans and settled its lease obligations. Minimal
liquidity risk remains in the group.
23. Deferred tax
The following are the major deferred tax liabilities and assets recognised by
the Group and movements thereon during the current and prior reporting period.
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | Accelerated | | Share | | |
| | Intangible | tax | Employee | based | | |
| | assets | depreciation | holidays | payments | Tax | Total |
| | | | | | losses | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| Balance at 1 January | (1,223) | 20 | 11 | 202 | 446 | (544) |
| 2008 | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| Credit to equity | - | - | - | (195) | - | (195) |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| Charge/(credit) to | 390 | (20) | (11) | (7) | (446) | (94) |
| income | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| At 31 December 2008 | (833) | - | - | - | - | (833) |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| Classified as held | 833 | - | - | - | - | 833 |
| for sale | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| At 31 December 2009 | - | - | - | - | - | - |
+-----------------------+------------+--------------+----------+----------+---------+---------+
| | | | | | | |
+-----------------------+------------+--------------+----------+----------+---------+---------+
The following is the analysis of the deferred tax balances for financial
reporting purposes:
+------------------------------------+--------------+-----------------+-----------------+
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------+--------------+-----------------+-----------------+
| | | | |
+------------------------------------+--------------+-----------------+-----------------+
| Deferred tax liabilities | | - | (833) |
+------------------------------------+--------------+-----------------+-----------------+
| | | | |
+------------------------------------+--------------+-----------------+-----------------+
At the balance sheet date, the Group had unused tax losses of GBP2m (2008:
GBP7.1m) available for offset against future profits. No deferred tax asset has
been recognised in respect of these losses (2008: GBPnil) due to the
unpredictability of future profit streams.
24. Called up share capital
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| Authorised | | | | |
+------------------------------------+--------+--------+---------+---------+
| 60m ordinary shares of 0.4p each | | | 240 | 240 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Called up, allotted and fully paid | | | | |
+------------------------------------+--------+--------+---------+---------+
| 50.5m (2008: 50.5m) ordinary | | | 202 | 202 |
| shares of 0.4p each | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
25. Own shares
EBT Shareholding
The Interactive Prospect Targeting Employee Benefit Trust ("EBT") was
established to satisfy the exercise of share options. The trustee of the EBT,
Fairbairn Trust Limited, purchases the Company's ordinary shares in the open
market with financing provided by the Company, as required. The current market
value of the shares is deemed to be nil due to the share valuation. The number
of ordinary shares held by the employee benefit trust at 31 December 2009 was
215,000 (2008: 215,000).
26. Disposal of subsidiaries
As referred to in note 12, on the 16 April 2009, the group disposed of its
interest in NP6 and its subsidiary MailPerformance UK Limited. The net assets of
NP6 and its subsidiary MailPerformance UK Limited at 31 December 2008 were
GBP4,352k and at the date of disposal were as follows:
+-------------------------------------------------------+--------------------------------+
| | At disposal |
| | date |
+-------------------------------------------------------+--------------------------------+
| | GBP'000 |
+-------------------------------------------------------+--------------------------------+
| Intangibles | 1,100 |
+-------------------------------------------------------+--------------------------------+
| Goodwill | 2,162 |
+-------------------------------------------------------+--------------------------------+
| Property, plant and equipment | 36 |
+-------------------------------------------------------+--------------------------------+
| Trade receivables | 2,083 |
+-------------------------------------------------------+--------------------------------+
| Accrued income and prepayments | 124 |
+-------------------------------------------------------+--------------------------------+
| Bank balances and cash | 803 |
+-------------------------------------------------------+--------------------------------+
| Trade payables | (339) |
+-------------------------------------------------------+--------------------------------+
| Deferred income and accruals | (921) |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| Gain on disposal | 273 |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| Total consideration | 5,321 |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| Satisfied by: | |
+-------------------------------------------------------+--------------------------------+
| Cash | 2,882 |
+-------------------------------------------------------+--------------------------------+
| Liabilities cancelled on disposal | 2,439 |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| Net cash inflows arising from on disposal | |
+-------------------------------------------------------+--------------------------------+
| Cash consideration | 2,882 |
+-------------------------------------------------------+--------------------------------+
| Cash disposed | (803) |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
| | 2,079 |
+-------------------------------------------------------+--------------------------------+
| | |
+-------------------------------------------------------+--------------------------------+
+--------------------------------------------------+------------+--------------------+
| Subsidiary sold | Effective | Net |
| | date | profit |
| | | on |
| | | disposal |
| | | GBP'000 |
+--------------------------------------------------+------------+--------------------+
| | | |
+--------------------------------------------------+------------+--------------------+
| NP6 including its subsidiary MailPerformance UK |16/04/2009 | 273 |
| Limited | | |
+--------------------------------------------------+------------+--------------------+
| | | |
+--------------------------------------------------+------------+--------------------+
27. Share-based payments
Equity-settled share option schemes
The Group has granted options to certain directors and employees. Options are
exercisable at a price equal to the average quoted market price of the Company's
shares on the date of grant. The vesting period is generally 3 years. If the
options remain unexercised after a period of 10 years from the date of grant the
options expire. Options are forfeited if the employee leaves the Group before
the options vest.
Details of the options and warrants outstanding during the year are as follows:
+------------------------------------+---------+----------+---------+----------+
| | 2009 | 2008 |
+------------------------------------+--------------------+--------------------+
| | Number | Weighted | Number | Weighted |
| | of | average | of | average |
| | options | exercise | options | exercise |
| | | price | | price |
+------------------------------------+---------+----------+---------+----------+
| | '000s | GBP | '000s | GBP |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| Outstanding at the beginning of | 2,265 | 0.87 | 3,423 | 1.18 |
| the year | | | | |
+------------------------------------+---------+----------+---------+----------+
| Options granted during the year | - | - | 1,255 | 0.24 |
+------------------------------------+---------+----------+---------+----------+
| Exercised during the year | - | - | (10) | 0.20 |
+------------------------------------+---------+----------+---------+----------+
| Forfeited during the year | (2,007) | 1.27 | (2,403) | 0.80 |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| Outstanding at the end of the year | 258 | 1.55 | 2,265 | 0.87 |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| Exercisable at the end of the year | - | | 422 | 1.07 |
| | | - | | |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
| Warrants issued during the year | - | - | 3,000 | - |
+------------------------------------+---------+----------+---------+----------+
| | | | | |
+------------------------------------+---------+----------+---------+----------+
The options outstanding at 31 December 2009 had a weighted average exercise
price of GBP1.55 and a weighted average remaining contractual life of 7.3 years.
In the year ended 31 December 2008 warrants were issued on 24 October 2008. The
aggregate of the estimated fair values of the warrants granted on that date was
GBP180,000. These warrants were not exercised during the year ended 31 December
2009.
As a consequence of the businesses and companies disposal in 2008 and 2009,
2,007,143 options have expired in the year ended 31 December 2009.
28. Operating lease arrangements
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| Minimum lease payments under | | | - | 891 |
| operating leases recognised as an | | | | |
| expense in the year | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
At the year end the Group had outstanding commitments for future minimum lease
payments under non-cancellable operating leases, which fall due as follows:
+------------------------------------+--------+--------+---------+---------+
| | | | 2009 | 2008 |
| | | | GBP'000 | GBP'000 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| Within one year | | | - | 876 |
+------------------------------------+--------+--------+---------+---------+
| In the second to fifth year | | | - | 2,425 |
| inclusive | | | | |
+------------------------------------+--------+--------+---------+---------+
| After five years | | | - | 547 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
| | | | - | 3,848 |
+------------------------------------+--------+--------+---------+---------+
| | | | | |
+------------------------------------+--------+--------+---------+---------+
28. Operating lease arrangements (continued)
Operating leases represent rentals payable by the Group for certain of its
office properties and office equipment. The above commitments are no longer
applicable to the Group as they relate to discontinued businesses that have been
subsequently sold.
29. Events after the balance sheet date
On 11 December 2009 the Group reached agreement with Bisnode AB for the sale of
Directinet and Netcollections, subject to a number of conditions. Completion of
the disposal was on 6 January 2010. The amount receivable by the Group in
respect of this sale comprised an initial amount of EUR7,000,000, to be followed
by a balance (subject to adjustments) of EUR350,000. As described in the
Chairman's statement on page 2, the Group is in discussions with the buyer in
respect of the quantum of the balance consideration. The proceeds on disposal
less costs to sell were in line with the book value of the related net assets.
For the breakdown of net assets held for sale, refer to note 12.
The Group settled its lease obligations in respect of its London property for a
consideration of approximately GBP965,000 in January 2010.
The Group repaid its bank loan in January 2010, amounting to approximately
EUR3.9m.
30. Related party transactions
Transactions between the Company and its subsidiaries which are related parties
have been eliminated on consolidation and are not disclosed in these financial
statements.
The remuneration of the Directors, who are the key management personnel of the
Group, is set out in note 9.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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