Part 3 : For preceding part double click [nRn2N7516F]
£'000 £'000
Wages and salaries 11,394 9,183
Social security costs 1,325 1,082
Other pension costs 744 648
Total 13,463 10,913
Disclosure of the remuneration of Key Management Personnel, as required by IAS
24, is covered by the audited part of the Directors Remuneration Report.
7 FINANCE COSTS
2008 2007
£'000 £'000
Bank interest payable 1,074 831
8 DIVIDENDS
2008 2007
£'000 £'000
Equity dividends paid during the year at 14.3 pence per share 3,310 5,427
(2007: 24.1p)
Equity dividends proposed after the year-end (not recognised
as a liability) at 10.6 pence per share (2007: 9.3p) 2,462 2,148
9 PARENT COMPANY PROFIT
2008 2007
£'000 £'000
The amount of profit (loss) dealt with in the accounts 11 1,337
of the company is
The company has taken advantage of the exemption in S230 of the Companies Act
(1985) not to present the parent company's income statement.
10 TAX ON PROFIT ON ORDINARY ACTIVITIES
2008 2007
£'000 £'000
Current Tax: UK corporation tax 3,932 3,177
Adjustments in respect of previous periods (77) 1
3,855 3,178
Deferred tax (note 14) (150) (16)
Tax on profit on ordinary activities 3,705 3,162
UK corporation tax has been charged at 29.33% (2007 - 30%).
The charge for the year can be reconciled to the profit as per the income
statement as follows:
2008 2007
£'000 £'000
Profit before tax 12,797 9,871
Profit on ordinary activities multiplied by the standard
rate of corporation tax in the UK
of 29.33% (2007: 30%) 3,753 2,961
Expenses not deductible for tax purposes 18 17
Exceptional items not deductible for tax purposes 0 183
Change in deferred tax rate 11 0
Adjustments to tax charge in respect of previous periods (77) 1
Current tax charge for period 3,705 3,162
Tax charge/(credit) recognised directly in equity
2008 2007
£'000 £'000
Current tax recognised directly in equity (91) (806)
Deferred tax recognised directly in equity 387 162
Total tax recognised directly in equity 296 (644)
Factors that may affect future tax charges
Based on current capital investment plans, and the changes in capital allowance
rules effective April 2008, the group expects depreciation to exceed capital
allowances in the future.
A deferred tax asset has been recognised in the balance sheet in respect of the
cost of employee share options. This will become recoverable when the options
are exercised.
None of the companies have losses carried forward available for offset against
future profits and the directors are confident that the group will continue to
be profitable in coming years.
11 EARNINGS PER SHARE
Earnings per share has been calculated by dividing the consolidated profit after
taxation attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period.
Diluted earnings per share has been calculated, on the same basis as above,
except that the weighted average number of ordinary shares that would be issued
on the conversion of all the dilutive potential ordinary shares (arising from
the Group's share option schemes) into ordinary has been added to the
denominator. There are no changes to the profit (numerator) as a result of the
dilutive calculation.
2008 2007
£'000 £'000
Profit after tax attributable to ordinary shareholders Continuing operations 9,092 6,709
Discontinued operations 0 67
Total 9,092 6,776
2008 2007
'000s '000s
Weighted average number of ordinary shares in issue 23,111 22,470
Effect of dilutive potential ordinary shares 660 556
Total 23,771 23,026
pence Pence
Earnings per ordinary share - basic Continuing operations 39.34 29.86
Discontinued operations 0.00 0.30
Total 39.34 30.16
- dilutd Continuing operations 38.25 29.14
Discontinued operations 0.00 0.29
Total 38.25 29.43
Earnings Per Share for the purpose of a performance measure for the LTIPs is
calculated excluded the non-recurring items of the sales and profits of the US
business sold on 31st August 2006 as well as the non-recurring costs of the
flotation as calculated below. (See 'Earnings per share growth' within the
Directors' Remuneration Report).
2008 2007
'000s '000s
Profit on ordinary activities after taxation 9,092 6,776
Cost of admission to AIM 0 572
Profit after tax of discontinued operations 0 (5)
Profit on sale of discontinued operations 0 (59)
Profit on ordinary activities after taxation but before 9,092 7,284
non-recurring items
pence pence
Earnings per ordinary share - basic 39.34 32.42
- diluted 38.25 31.63
12 INTANGIBLE ASSETS
Software
Licences
£'000
COST At 1 August 2006 150
Additions 37
At 1st August 2007 187
Additions 86
At 31st July 2008 273
AMORTISATION At 1st August 2006 22
Charge for the year 32
At 1st August 2007 54
Charge for the year 49
At 31st July 2008 103
NET BOOK VALUE At 31st July 2007 133
At 31st July 2008 170
13 PROPERTY, PLANT AND EQUIPMENT
Group Motor Office Computer
Vehicles Equipment Equipment Total
£'000 £'000 £'000 £'000
COST At 1 August 2006 1,194 947 514 2,655
Additions 329 364 230 923
Disposals (116) 0 0 (116)
At 1st August 2007 1,407 1,311 744 3,462
Additions 472 190 131 793
Disposals (155) (114) (11) (280)
At 31st July 2008 1,724 1,387 864 3,975
DEPRECIATION At 1st August 2006 515 557 312 1,384
Charge for the year 216 140 111 467
Release on disposal (88) 0 0 (88)
At 1st August 2007 643 697 423 1,763
Charge for the year 275 174 145 594
Release on disposal (105) (75) (11) (191)
At 31st July 2008 813 796 557 2,166
NET BOOK VALUE At 31st July 2007
At 31st July 2008 764 614 321 1,699
911 591 307 1,809
There were no capital commitments as at 31st July 2008 (2007: £nil)
14 DEFERRED TAX
GROUP COMPANY
2008 2007 2008 2007
The deferred tax asset is represented by: £'000 £'000 £'000 £'000
Temporary difference on share based payments
At start of year 529 675 0 0
Recognised in income 150 16 0 0
Recognised in equity (387) (162) 0 0
At end of year 292 529 0 0
15 INVESTMENTS
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Shares in group companies 0 0 250 250
Total 0 0 250 250
Subsidiary Undertakings
Company Country of Incorporation Share Class % held Main Activities
Matchtech Group UK Ltd United Kingdom Ordinary 99.998% Provision of recruitment consultancy
Matchtech Engineering Ltd United Kingdom Ordinary 100% Non trading
Matchmaker Personnel Ltd United Kingdom Ordinary 100% Non trading
On 31st August 2006 Matchtech Group UK Ltd sold the shares of Matchtech Inc for
consideration of £105,000. The results of Matchtech Inc have been included under
discontinued operations in the consolidated income statement.
16 TRADE AND OTHER RECEIVABLES
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Trade debtors 38,298 31,672 0 0
Amounts owed by group companies 0 0 2,880 2,203
Other debtors 49 55 0 0
Prepayments 218 257 0 0
Total 38,565 31,984 2,880 2,203
The amount owed to group undertakings in the company balance sheet is considered
to approximate to fair value.
The number of days sales outstanding at the end of the period was 54 days (2007:
57 days). The allowance for doubtful debts has been determined by reference to
previous experience and management assessment of debts.
The Directors consider that the carrying amount of trade and other receivables
approximates the fair value.
Included in the Group's trade receivable balance are debtors with a carrying
amount of £6,293,000 (2006: £7,799,000) which are past due at the reporting date
for which the Group has not provided as the Directors do not believe there has
been a significant change in credit quality and consider the amounts to be
recoverable in full. The Group does not hold any collateral over these balances.
The Directors consider all trade receivables not past due to be fully
recoverable.
The Group uses a third party credit scoring system to assess the credit
worthiness of potential new customers before accepting them. Credit limits are
defined by customer based on this information. All customer accounts are subject
to review on a regular basis by senior management and actions are taken to
address debt ageing issues.
The Directors believe that there is no requirement for further provision over
and above the allowance for doubtful debts.
Ageing of past due but not impaired trade receivables
GROUP
2008 2007
£'000 £'000
0-30 days 5558 6,448
30-60 days 619 1,042
60-90 days 29 151
90+ days 87 158
6,293 7,799
Movement in the allowance for doubtful debts
GROUP
2008 2007
£'000 £'000
Balance at the beginning of the period 183 116
Impairment losses recognised 16 67
199 183
Ageing of impaired trade receivables
GROUP
2008 2007
£'000 £'000
0-30 days 0 0
30-60 days 0 0
60-90 days 0 11
90+ days 199 172
199 183
17 TRADE AND OTHER PAYABLES
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Trade creditors 149 54 0 0
Taxation and Social Security 5,049 5,376 0 0
Other creditors 10,667 4,140 0 0
Accruals and deferred income 3,065 3,047 0 0
Total 18,930 12,617 0 0
The working capital facility is secured by way of an all assets debenture, dated
5 August 2002, which contains fixed and floating charges over the assets of
Matchtech Group UK Limited. The facility held with Barclays Bank allows the
company to borrow up to 90% of its invoiced debtors up to a maximum of £20
million. Interest is charged on borrowings at a rate of 1.0% over Barclays Bank
base rate.
18 FINANCIAL ASSETS AND LIABILITIES BALANCE SHEET CLASSIFICATION
The carrying amount of Matchtech's financial assets and liabilities as
recognised at the balance sheet date of the reporting periods under review may
also be categorised as follows:
Financial assets are included in the balance sheet within the following
headings:
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Trade and other receivables
- Loan and receivables 38,347 31,727 2,880 2,203
Cash and cash equivalents
- Loan and receivables 297 836 211 656
Total 38,644 32,563 3,091 2,859
Each financial liability is considered to be held at fair value.
Financial liabilities are included in the balance sheet within the following
headings:
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Current liabilities
Borrowings
- Financial liabilities recorded at amortised cost 3,349 8,590 0 0
Trade and other payables
- Financial liabilities recorded at amortised cost 10,816 4,194 0 0
Non current liabilities
Borrowings
- Financial liabilities recorded at amortised cost 0 2,083 0 0
Total 14,165 14,867 0 0
19 LONG TERM BORROWINGS
GROUP COMPANY
2008 2007 2008 2007
£'000 £'000 £'000 £'000
Bank loan 0 2,083 0 0
The bank loan was cleared on 31st July 2008
20 COMMITMENTS UNDER OPERATING LEASES
At 31st July 2008 the group had commitments to pay the GROUP COMPANY
following
amounts under non-cancellable operating leases as set out 2008 2007 2008 2007
below.
£'000 £'000 £'000 £'000
Land/buildings Leases falling due: within 1 to 5 years 583 783 0 0
after 5 years 2,494 2,779 0 0
Other Leases falling due: within 1 year 1 6 0 0
within 1 to 5 years 9 12 0 0
The lease on 1400 Parkway, which expires in March 2017 has a break clause
exercisable in June 2011. The annual commitment has therefore been classified in
the expiration within 1 to 5 year category. There are no applicable renewal
clauses in the current lease agreements.
21 SHARE CAPITAL
Authorised share capital
2008 2007
£'000 £'000
40,000,000 Ordinary shares of £0.01 each 400 400
Allotted, called up and fully paid:
2008 2007
£'000 £'000
23,225,000 Ordinary shares of £0.01 each 232 230
The number of shares in issue in the company increased as follows:
Date Ordinary shares Share premium received Consideration
issued pence per share Received
At 01/08/2006 22,071,610
27/10/2006 348,254 69 243,778
27/11/2006 31,955 366 117,115
27/11/2006 31,955 0 320
22/12/2006 767 0 8
30/01/2007 736 0 7
26/02/2007 658 0 7
30/03/2007 668 0 7
27/04/2007 573 0 6
25/05/2007 485 0 5
01/06/2007 539,140 86 466,705
11/06/2007 947 88 839
25/06/2007 1,447 0 14
At 31/7/2007 23,029,195 828,811
27/08/2007 436 0 4
28/09/2007 447 0 4
31/10/2007 454 0 5
05/11/2007 70,872 89 63,781
23/01/2008 17,131 0 171
08/04/2008 9,174 133 12,293
12/05/2008 5,692 145 8,310
05/06/2008 75,336 145 109,991
28/07/2008 16,619 145 24,264
Total 23,225,356 1,047,634
Share Options
The following options arrangements exist over the Company's shares.
2008 2007 Date of Exercise Exercise period
'000s '000s grant price
pence
Key Share Options 24 48 18/06/2004 70 18/06/2005 to 18/06/2014
Key Share Options 0 34 08/11/2004 89 08/11/2005 to 08/11/2014
Key Share Options 142 218 01/12/2005 146 01/06/2007 to 01/12/2015
Target/Loyalty Share Options 3 3 05/03/2003 70 14/07/2005 to 05/03/2013
Target/Loyalty Share Options 2 2 18/06/2004 70 18/06/2005 to 18/06/2014
Target/Loyalty Share Options 2 6 08/11/2004 89 14/07/2006 to 08/11/2014
Target/Loyalty Share Options 26 72 01/12/2005 146 01/12/2006 to 01/12/2015
Long Term Incentive Plan Options 260 269 26/10/2006 1 27/10/2009 to 27/10/2016
Long Term Incentive Plan Options 7 8 26/01/2007 1 26/01/2010 to 25/01/2017
Long Term Incentive Plan Options 292 0 15/11/2007 1 15/11/2010 to 14/11/2017
Total 758 660
In the year the company operated an EMI Share Option Scheme. No EMI share
options were granted during the year. All options exercised during the year were
EMI share options.
The Group also operates a Long Term Incentive Plan (LTIP). LTIP awards are
nil-cost options granted to senior staff subject to a three year holding period
and the achievement of performance targets. LTIP options have a life of 10
years. The number and weighted average exercise price of share options granted,
forfeited and exercised in the year were as follows.
2008 2007
Number Weighted average exercise price Weighted average share price Number Weighted average exercise price Weighted average share price
'000s (pence) (pence) '000s (pence) (pence)
Outstanding at 1st August 660 75.6 1,294 95.5
Granted 302 1.0 295 1.0
Forfeited 33 29.9 41 69.5
Exercised 171 122.8 361.0 888 80.1 411.0
Outstanding at 31st July 758 75.6 75.6 660 75.6 75.6
Exercisable at 31st July 200 134.2 134.2 93 78.2 78.2
The number and weighted average exercise price of future share options vesting
in the future are shown below.
2008 2007
Weighted average remaining contract life Number Weighted average exercise price Weighted average remaining contract life Number Weighted average exercise price
Exercise Date (months) '000s (pence) (months) '000s (pence)
27/10/2009 15 260 1.0 27 269 1.0
30/01/2010 18 7 1.0 27 8 1.0
06/11/2010 27 292 1.0 0 0 0.0
Total 559 277
The fair values of the LTIPS were calculated using a Monte Carlo simulation
method along with the assumption as detailed in the table below. In the year the
Group operated a Share Incentive Plan (SIP). The SIP is an HMRC approved plan
available to all employees enabling them to purchase shares out of pre-tax
salary. For each share purchased the company grants an additional share at no
cost. The fair values of the SIPS were calculated as the market value on the
date of the grant.
Date of grant Share Price on the date of grant Exercise Price Volatility Vesting Period Dividend Yield Risk Free Rate of interest Fair Value
(£) (£) (%) (yrs) (%) (%) (£)
27/10/2006 LTIP 3.45 0.01 30.4% 3.00 10% 4.6% 1.96
30/01/2007 LTIP 3.79 0.01 30.7% 3.00 10% 5.0% 2.20
27/11/2006 SIP 3.67 0.01 N/A 3.00 N/A N/A 3.67
22/12/2006 SIP 3.67 0.01 N/A 3.00 N/A N/A 3.67
30/01/2007 SIP 3.79 0.01 N/A 3.00 N/A N/A 3.79
26/02/2007 SIP 4.02 0.01 N/A 3.00 N/A N/A 4.02
30/03/2007 SIP 4.00 0.01 N/A 3.00 N/A N/A 4.00
27/04/2007 SIP 4.40 0.01 N/A 3.00 N/A N/A 4.40
25/05/2007 SIP 4.75 0.01 N/A 3.00 N/A N/A 4.75
25/06/2007 SIP 4.83 0.01 N/A 3.00 N/A N/A 4.83
27/07/2007 SIP 4.73 0.01 N/A 3.00 N/A N/A 4.73
15/11/2007 LTIP 4.24 0.01 30.1% 3.00 10% 4.6% 2.68
30/08/2007 SIP 4.61 0.01 N/A 3.00 N/A N/A 4.61
28/09/2007 SIP 4.60 0.01 N/A 3.00 N/A N/A 4.60
26/10/2007 SIP 4.69 0.01 N/A 3.00 N/A N/A 4.69
30/11/2007 SIP 4.12 0.01 N/A 3.00 N/A N/A 4.12
02/01/2008 SIP 3.73 0.01 N/A 3.00 N/A N/A 3.73
25/01/2008 SIP 3.58 0.01 N/A 3.00 N/A N/A 3.58
29/02/2008 SIP 3.19 0.01 N/A 3.00 N/A N/A 3.19
28/03/2008 SIP 3.02 0.01 N/A 3.00 N/A N/A 3.02
More to follow, for following part double-click [nRn4N7516F]