Latest News
Power Outage
@UK PLC changes name to cloudBuy
G-Cloud 4 Framework Agreement
Year End Shows Most Successful Year in @UK's History
Audited Results for the year ended 31 December 2011
@UK PLC, the cloud ecommerce marketplace, today announces its audited results for the year ended 31 December 2011.
Key Points
Financial:
- Turnover up 15% to £2,353,378 (2010: £2,051,037)
- Approximately 65% growth in eCommerce revenues
- Loss after tax reduced by 84% to £88,534 (2010: £551,864)
- Reduction in operating cash usage by 83% to £50,304 (2010: £292,416)
- Year end cash increased to £420,246 (2010: £29,060) with a further £0.3 million raised post year end
- New sales team generated over £1m in proposals in past 2 months
Operational:
- Award and successful launch of GeM £1m marketplace contract with integrated payment for all Higher Education institutions
- Award of NHS Sustainability contract to carbon footprint the NHS
- Company awarded a place in all 4 lots of the new G-Cloud framework
- First mover advantage as a comprehensive Green Marketplace with every single item carbon footprinted, providing opportunities in both public and private sector
- First overseas sales ahead of target
- Indian operation establised post-year end
Ronald Duncan, Executive Chairman, commented, "This has been the most successful year in @UK's history. We have grown revenues and moved into a profitable position on a monthly basis, however, perhaps more importantly, we now have major reference sites which demonstrate the considerable savings our ecommerce offerings can provide both public and private sector organisations.
"With a strong pipeline of customers for our ecommerce offerings both in the UK and internationally, an expanded sales team and a strengthened balance sheet, we look forward to another successful year in 2012."
Enquiries:
@UK PLC Tel: 0118 963 7000 Ronald Duncan, Chairman Westhouse Securities Tel: 020 7601 6100 Limited Tom Griffiths Newgate Threadneedle Tel: 020 7653 9850 Caroline Evans-Jones/ Alex White
@UK PLC
@UK is Europe's leading Cloud Platform with over 1 million users, which is used for University and Colleges' procurement along with Local Authority, Schools and other Government and Private sector procurement.
The GeM marketplace for Universities on Colleges is the only card based national marketplace in the world and was successfully delivered for the 800 Universities and Colleges and the 680 National Suppliers, proving that Cloud Ecommerce delivers large complex projects for Government on time and budget.
Richard Benyon MP Minster for the Natural Environment, launched the @UK Green Ecommerce Marketplace back in October 2010, and it is now the largest repository of product carbon footprints in the World.
@UK was used by the National Audit Office to identify over GBP500 million in savings for 25% of NHS spend. The ground breaking SpendInsight system used to identify the savings resulted in the award of 2 PhD's in artificial intelligence.
@UK delivers key government commitments of Savings Sustainability, and SME Inclusion along with support for start-ups. @UK PLC has now created over 200,000 start up businesses and launched a new Cloud-Start-Up.com service to provide a complete suite of cloud business software to start-ups along with the essentials of Limited Company, Bank Account, Domain Name, Email, Ecommerce, Accounting system and membership of the @UK business club.
This has been followed by the announcement of the 2012StartUp.com campaign, which is supported by the AIM market of the London Stock Exchange, the Forum of Private Business, and Software Industry Association BASDA. The campaign aims for a 27% growth of 100,000 start up companies and growth for existing businesses. It is a practical campaign that will result in companies being formed and growing through @UK's technology.
Chairman's Statement:
Introduction:
The Group experienced improved trading during the year.
Revenue increased by 15% to GBP2.4 million (2010: GBP2.1 million), while the loss after tax decreased by 84%; to GBP88,534(2010: GBP551,864), supported by an 83% reduction in operating cash usage to GBP50,304 (2010: GBP292,416). The Company's ecommerce business, its main growth engine, delivered a stronger than expected performance with a 65% growth in revenues.
Major successes included: -
GeM marketplace win for all Universities and Colleges (the only major e-marketplace contract that was available during the year);
Award of NHS Sustainability contract to carbon footprint the NHS: &,
First global ecommerce site for a GeM supplier.
Increased sales capacity
We have considerably strengthened our sales capacity over the past year.
Following the share placing in January 2011, we hired a new business development manager.
Towards the end of 2011, we hired our sales team leader, and started trial marketing of a new sales process. The new sales process has been an outstanding success and subsequently we raised a further GBP550,000 and started recruiting aggressively. This process was completed by the end of February 2012 and had its first full months of sales in March 2012. The sales team has generated over GBP1m in proposals to 67 potential customers.
In all we have identified approximately 10,000 UK-based prospects for the first stage of our offerings and our average proposal value is GBP16,000 with a second stage at GBP35-200k giving a UK potential market of up to GBP160 million per annum for the first stage and up to GBP350 million - GBP2 billion per annum for the second stage offering.
The challenge now is to convert proposals to cash, which we have achieved for the January sales.
Share placings
Following successful equity fund raisings undertaken during the year and post-year end from both existing and new investors the Company now has a robust balance sheet, strong cash position and increased sales team. An improved balance sheet is expected to improve @UK's position significantly when competing for future large Government contracts.
Dividend policy
The Board is not recommending the payment of a dividend for 2011. In the immediate future, the Board is committed to building the Group's business and accordingly all the Group's financial resources are being applied to this end. In the longer term, the Directors intend to adopt a progressive dividend policy appropriate to the Group'sfinancial performance.
People
We have an exceptional group of employees and on behalf of the Board and shareholders, I would like to thank all our employees for their hard work and effort during the year, and congratulate everyone in achieving Investors in People in a record beating 3 weeks along with Dr Paul Roberts and Dr Matthew Brown on their PhD's for @UK PLC research.
New Products
We have another 2 PhD's in training, and have more research in the pipeline. In the past year we made significant (GBP 266,109) investments in the GeM Contract Management system and our new Content Management system along with a next generation of our automatic web application creation platform.
We also customised our marketplace for social care and have received strong interest from Germany. We are therefore now developing a German version of the system.
Outlook
Our ecommerce pipeline is considerable.
We are making significant inroads into the UK public sector and are starting to see traction in the UK private sector, particularly for our carbon footprinting solutions. Our enlarged sales team is delivering immediate results, which we believe underlines the value of our solutions.
We are developing a leading position in the emerging social care marketplace sector. We won our first contract back in December and there are now 3 customers which are expected to use our marketplace. Social care is the largest area of spend for local authorities and our solution is the first to address all the challenges of individual budgets.
As well as experiencing increased demand in the UK, we are seeing considerable interest in our products and services from areas outside of the UK, particularly Asia Pacific and Europe. This is as a direct result of working with banking partners who are facing the same challenges in other markets as those in the UK.
Overall the last year has been a busy and productive time for @UK, during which we have consolidated our leading position in eProcurement in the UK, successfully sold and delivered a transformational project on time and within budget, whilst starting the move into international markets.
OPERATIONAL REVIEW
Financial Results
In the year ended 31 December 2011, @UK PLC increased revenue by 15% to £2,353,378 (2010: 2,051,037) and reduced its loss before taxation by 70% to £177,604 (2010: £592,000). This included the capitalisation of £266,109 of development expenditure (2010: 0).
Sales of web and eCommerce services recorded an increase of 65% in the year to £1,105,648 (2010: £669,049) as a result of the GeM and other contract wins.
Revenue from company formation services decreased by 15% to £1,021,698, (2010: £1,208,878) in the year which we believe is representative of the slowdown in the economy.
Revenue from coding increased by 31% to £226,032 (2010: GBP173,110) reflecting the increased product carbon footprinting activity.
As a result of the increase in web and ecommerce, gross margin increased to 77% (2010: 67%).
Continued attention to costs meant operating expenses before exceptional items and share based payments held steady at £1,961,247 (2010: £1,962,151). £16,520 was charged as the "cost" calculated under IFRS 2 of share options granted to employees (2010: charge £5,196).
At 31 December 2011 the Group had cash of £420,246 (31 December 2010: £29,060). Since the year end £0.3m has been raised in a placing of ordinary shares at 11p per share to provide additional funds for sales, marketing and working capital.
Share issues
On 12 January 2011, 5,305,000 ordinary shares in the Company were issued in a placing at 5p per share. On 21 December 2011 a further 4,545,455 shares were issued at 11p per share. The £765,250 in total was raised to provide funds for sales, marketing and working capital.
Since the year end, on 27 February 2012, the Company announced that it had placed 2,781,818 new ordinary shares in the Company at an issue price of 11p per share, raising GBP0.3 million to provide further funds for sales, marketing and working capital.
We were delighted with the support shown by our long term institutional investors during the fundraisings in 2011 and to welcome a major new institutional investor in February 2012.
Cost savings and demonstrable return on investment
@UK PLC helps deliver back office savings through its SpendInsight Artificial Intelligence system that has the unique ability to deliver line item information from complex free text purchasing data. The potential savings identified by SpendInsight requires an ecommerce marketplace to realise the savings. @UK PLC is the only ecommerce marketplace. The other marketplaces are catalogue driven. Legacy catalogue driven marketplaces have difficulty dealing with complex processes and are unable to cope with real world pricing. This results in high ( 60% plus ) invoice error rates. @UK PLC has zero invoice errors because of its ecommerce background where correct pricing at the point of payment is an essential part of the process. Ecommerce also requires that the system is continuously available which is why @UK PLC has developed a true cloud based solution - the only one available. As a cloud solution the entire process from providing the data to having the marketplace live can take as little as three weeks.
Recovery from austerity requires innovation and growth which is normally delivered by small businesses. @UK PLC has streamlined the process of setting up and running small businesses. The next step is to help them to take their products and services more quickly to market, which @UK PLC delivers through its public ecommerce marketplace.
Green and social responsibility
Green and corporate and social responsibilities have both been subjective areas, because the cost of accurate carbon footprinting has been prohibitive. @UK PLC in conjunction with CenSA has made a significant breakthrough that now makes product level carbon footprints affordable. @UK PLC has slashed the cost of product carbon footprints to GBP4 per item and quickly established a 97.5% global market share from a baseline of zero. We are now extending this offering into the other areas of sustainability and corporate and social responsibility. This is a growing market area and @UK PLC has quickly established a significant position.
The UK is the global leader in carbon footprinting and developed the international standard for product carbon footprinting along with the international reporting of organisational carbon footprinting via the Carbon disclosure project. @UK PLC as the UK, and thus global, leader is well positioned in this expanding global market.
BASDA Utilities XML and BASDA Green XML
@UK PLC is working for the Software Industry trade association BASDA in the creation of new standards BASDA Utilities XML and BASDA Green XML. Since the announcement of the standards at the RSA on 15 November 2011, another 2 utilities have joined the interoperability and testing program. The full list of participants is now:-
- @UK PLC
- British Gas/Centrica
- EDF
- Laser Energy Buying Group
- NPower
- Scottish and Southern
- Scottish Power
- Smartest Energy
- Total Gas and Power
BASDA Green XML is ahead of all the other international XML standards as the only standard to have addressed green issues, and is likely to form the basis for all the other standards eventual green extensions.
@UK PLC is supporting the BASDA Green XML standard to provide a fast route to market for the breakthroughs in product carbon footprinting. BASDA Utilities XML is expected to provide the catalyst for mass adoption of electronic invoicing, and @UK PLC will have a significant first move advantage.
Adult and Children's Social Care
The UK has the western world's most efficient health care system (it is the second most efficient system of a major economy behind Japan), and has the best end of life care in the world. The UK is leading the world in a new process to provide choice for state funded care. The @UK PLC ecommerce marketplace is ideally suited for this task since it is able to provide accurate pricing along with the complex negotiations required to arrange domiciliary and residential care.
@UK PLC expects to have the first live transactional social care marketplace, and has 2 other authorities that are expected to follow shortly after the first. We believe that this will form the basis of another solution to a major global problem.
Cloud services
Cloud is a major shift in computing. @UK PLC has a significant lead in this area having been a cloud platform for over 10 years, and has built a number of highly complex applications on its cloud platform. Our ecommerce marketplace is significantly more complex than most ERP systems, like SAP and Oracle, since it handles the entire source to pay cycle in real time with accurate pricing across multiple systems. The reason that we have been able to build a better application with significantly less resources is the speed at which applications can be created on our platform. We believe that demand will increase for secure cloud based applications in the fields of ecommerce and eprocurement that can be rapidly deployed and are pre-integrated with the leading on premise systems.
Operational Performance
The core ecommerce solutions that we have built on our cloud platform are:-
Spend Analysis
Green Analysis
Eprocurement
Ecommerce
In addition, we have a Company Formations division, which aims to increase the customer base into which we can cross sell the above solutions.
Spend Analysis (SpendInsight)
SpendInsight has taken off since the year end in terms of the number of organisations seeking proposals as a result of our new sales team and our proven track record.
Our work at the beginning of the year with the National Audit Office to provide the detailed analysis for its report 'the Procurement of Consumables in the NHS', shows the depth of our work and draws on the sheer weight of analysis that we have undertaken in the NHS and more widely across public and private sector organisations.
There are opportunities for SpendInsight across all the sectors with Universities looking the next most positive after health, followed by Local and Central Government.
Green Analysis (GreenInsight)
While GreenInsight saw low sales during the year, since the year end there has been an uplift in demand for GreenInsight such that it is currently our best selling product, and has both the largest number and the largest total value of proposals. We negotiated a new agreement for our carbon data which was signed at the beginning of 2012 and have increased our margin from 50% to 90% on our increased volumes.
We have established ourselves as the market leader in organisational carbon footprinting, and this has been an important factor in contract wins across public and private sector as organisations move from scope 1/2 (gas and electric bills) to scope 3 (the entire carbon footprint of the organisation).
Carbon Footprinting
We have a 97.5% market share in product carbon footprinting because our technology provides significantly more accurate product carbon footprints at a fraction of the cost of previous methods. This is another area of significantly increased proposals.
By cutting the cost of product carbon footprinting from GBP 20-100,000 per product to GBP 4 per product for a quicker more accurate process we now have a number of organisations with 10's of thousands of products seeking product carbon footprints for all their products for the first time.
This is a major global market, and we have data for 97 countries with a blended rate for the remaining 50 countries of the world.
Eprocurement (including eMarketplace and Purchase2Pay)
In April 2011, @UK won the GeM marketplace contract, to provide a card only ecommerce marketplace to all of the UK's higher and further educational establishments. This is a transformational project and underlines the uniqueness of @UK's technology platform, not only in the UK but globally. Although the timescale for deployment was very tight for a national system, the system went live on 1st August 2011 exactly on time and to budget. This is testament to the overall project team, which has been drawn from the higher education sector as well as from @UK.
As part of the GeM contract we are currently enabling the 800 suppliers who hold National or Regional contracts with @UK websites and merchant accounts to allow them to accept card payment. Once this supplier base is fully enabled they will offer a compelling proposition to other buying organisations, as it will be possible to implement full eprocurement programmes for organisations in the certainty that they will be entirely funded by banking rebates. At a local level this proposition is also being demonstrated by Huddersfield University which is rolling out the full marketplace across all of its buying, in association with its pCard provider Barclaycard.
Whilst GeM has been our headline project we have also continued to deliver to our other customers, including our ecommerce customers and Findel Group plc another first, having carbon foot-printed all 46,000 of the goods that they sell, and continue to make progress with our schools marketplace.
Public/Green ecommerce marketplace
We made significant improvements to our ecommerce marketplace during the year. The key change is that we now actively promote the public face of our marketplace in order to capture more of the 'uncontrolled' public sector spend (i.e. spend which is not directed through a public body's official procurement channel). Results from our Spend Analysis have identified that the majority (65%) of spend in public sector is currently still uncontrolled, and we expect this to be the case until such time there is widespread adoption of systems such as our ecommerce marketplace which make the implementation of 'controlled' procurement more easy to achieve. In the meantime there is a requirement for suppliers to maximise their sales into this uncontrolled spend, and we now offer that route via the public side of our marketplace, thereby enabling our suppliers to have access to both controlled and uncontrolled public sector spend.
An analysis of the organisations purchasing through our system showed that we already have over 5,000 public sector bodies purchasing via our system in an uncontrolled manner.
Since the year end we have created the 2012StartUp.com campaign and we expect this to help drive traffic to our suppliers and the movement down from the large buying organisations to SME group purchasing.
SiteGenerator ecommerce
We made significant progress with our ecommerce software, and had a number of major account wins including our first global roll out for a GeM Supplier.
We created a new content management platform as part of our new global supplier site, and enhanced our blogging, and social media functionality to help our customers promote and sell on their sites. Since the year end have started the process of moving our new sites to the platform commencing with the new 2012StartUp.com site.
Email (CloudEmail4Business)
We continued to put significant effort into our new Cloud Email 4 Business solution, which now has a number of largebusiness email features, and we expect to be able to cross sell these to our larger customers.
Start ups and Company Formations
This forms the basis of our bottom up pipeline
Start up > Domain name > email > ecommerce > purchasing group
We have a strong position in the company formation market, and we want to extend this into sole traders and other start-ups. In the past year, we have put a significant investment into our email services to make them fully cloud based, so that we can provide the same level of security and reliability on email as we do on ecommerce.
Our public ecommerce marketplace will help our startups to start selling more quickly and then we plan to provide them with group purchasing so that they can buy more effectively from the beginning.
The start up market was depressed by the European financial uncertainly in the second half of the year. We have responded with our 2012StartUp.com campaign which was announced last month.
2012 Start Up.com
Our 2012StartUp.com campaign has got strong support from the AIM Market of the London Stock Exchange, the Forum of Private Business and BASDA, the software industry association, in the pre launch period, and we expect to launch the campaign shortly. It will help tie all the elements of our business together with:
- Start ups creating ecommerce sites and spending their start up costs with our merchants
- Our merchants creating ecommerce sites to sell to the start ups and each other and
- Our growing export businesses creating ecommerce sites that we will promote as part of our global expansion into rapidly growing regions like Asia Pacific
- And all our customers large and small moving to use our system for their purchasing in a sustainable way.
Increased sales capacity
We have considerably strengthened our sales capacity over the past year.
Following the January 2011 share round, we brought in a new business development manager.
Towards the end of 2011, we hired our sales team leader, and started trial marketing of a new sales process. The new sales process was a mixture of a sales process that had been created by a major electronic directory provider as a result of 9 months research to create a 4 week training course, and a new product mix that resulted in a much higher and faster conversion rate for customers.
The new process was transformational so we raised a further GBP 550,000 and started to aggressively recruit a team to exploit this new sales process. The new process is working successfully across all parts of the public and private sectors including FTSE 100, NHS, Local Government; Universities, Housing Associations and Central Government.
This recruitment started 2012 with the 2nd person joining on 20th January and the next 3 on the 20th of February with the last member of the team on 28th February so that we had the complete team of 6 in place for March.
In all we have identified up to/approximately 10,000 UK-based prospects for our analysis offerings at a cost of GBP10,000 each for either Spend Analysis or Green Analysis.
In the past 2 months our sales team has generated over GBP1m in proposals to 67 potential customers with another 12 proposals expected to be created shortly, so we are significantly ahead of our analysis in terms of average proposal value of GBP 16,000 giving us a market potential of GBP 160 million per annum, with only the first GBP 1 million addressed and a low drop out rate
Resources and Investors in People
We achieved Investors in People status at 3 weeks' notice to gain additional marks in a tender. It was a great validation of our culture and philosophy, which is to trust our people and allow them to get on with their work within a set of lightweight processes. The investors in people assessor concurred and said that we are a truly outstanding organisation.
There are very few organisations where the in house training and development results in PhD's and we congratulate Dr Paul Roberts and Dr Matthew Brown on their PhD's for @UK PLC research.
Our outstanding team is one of the reasons that we are able to deliver a large amount of change and work with a very limited amount of resources.
We increased our sales resource once it was clear that we had discovered a process that allowed us to repeatedly sell our services in a quick and effective manner, and we now need to take on some more marketing and development resources along with country managers to manage our international expansion.
International Expansion
Having products that can be quickly and easily sold means we are now in a position to be able to expand into the much larger international markets. We have now achieved this with our new sales team being able to book meetings that result in proposals after their first day's training. Every single team member has achieved a booked meeting within the first day after training.
Our Indian subsidiary is now registered and has made its first sale. It is expected to be self funding within a few months, and has been established at minimal (less than 10k) cost. This is because we took our time and carried out a detailed market survey along with training up our Indian team in our operations.
There is a significant difference in demand from G8 versus the remainder of the G20 countries and India gives a low cost centre where we can learn about the requirements of the emerging economies. The UK provides us with a leading set of products for the established economies.
Group Statement of Comprehensive Income
For the year ended 31 December 2011
2011 2010 Notes GBP GBP -------------------------------- ------ ---------------------- ------------ Revenue 4 2,353,378 2,051,037 Cost of sales (551,845) (673,847) -------------------------------- ------ ---------------------- ------------ Gross profit 1,801,533 1,377,190 Administrative expenses (1,961,247) (1,962,151) Share based payments 21 (16,520) (5,196) -------------------------------- ------ ---------------------- ------------ Operating loss 5 (176,234) (590,157) Finance costs 8 (1,370) (1,433) -------------------------------- ------ ---------------------- ------------ Loss on ordinary activities before taxation (177,604) (591,590) Income tax expense 9 89,070 39,726 -------------------------------- ------ ---------------------- ------------ Loss for the year attributable to equity shareholders of the parent (88,534) (551,864) -------------------------------- ------ ---------------------- ------------ Loss per share Basic and diluted 10 0.1p 0.9p -------------------------------- ------ ---------------------- ------------
Revenue and operating loss for the year all derive from continuing operations.
The Group had no other comprehensive income in 2010 or 2011 consequently the loss for the year is equal to the total comprehensive income for the year.
The loss attributable to the owners of the parent company is GBP88,534 (2010 - loss of GBP551,864). Total comprehensive income attributable to owners of the parent company is (GBP88,534) (2010 - (GBP551,864)).
Group Statement of Financial Position
31 December 2011
2011 2010 Notes GBP GBP ------------------------------- ------ ------------- ------------- Assets Non-current assets Goodwill 11 - - Other intangible assets 12 239,625 --- Property, plant and equipment 13 43,442 37,839 Investments 14 - - ------------------------------- ------ ------------- ------------- 283,067 37,839 ------------------------------- ------ ------------- ------------- Current assets Trade and other receivables 15 384,545 200,682 Taxes recoverable 55,197 30,000 Cash and cash equivalents 16 420,246 29,060 ------------------------------- ------ ------------- ------------- 859,988 259,742 ------------------------------- ------ ------------- ------------- Total assets 1,143,055 297,581 ------------------------------- ------ ------------- ------------- Liabilities Current liabilities Trade and other payables 17 (655,712) (490,975) Current tax liabilities - - Financial liabilities - borrowings 18 (12,500) (12,500) ------------------------------- ------ ------------- ------------- (668,212) (503,475) ------------------------------- ------ ------------- ------------- Non-current liabilities Financial liabilities - borrowings 18 (5,842) (18,342) ------------------------------- ------ ------------- ------------- (5,842) (18,342) ------------------------------- ------ ------------- ------------- Total liabilities (674,054) (521,817) ------------------------------- ------ ------------- ------------- Total net assets 469,001 (224,236) ------------------------------- ------ ------------- ------------- Shareholders' equity Called up share capital 19 747,675 649,170 Share premium account 19 10,823,634 10,156,888 Other reserve 630,030 630,030 Share-based payment reserve 76,720 60,200 Accumulated losses (11,809,058) (11,720,525) ------------------------------- ------ ------------- ------------- Total equity attributable to equity shareholders of the parent 469,001 (224,237) ------------------------------- ------ ------------- -------------
Statements of Cash Flows
For the year ended 31 December 2011
Group ---------------------- 2011 2010 Notes GBP GBP ------------------------------------- ------ ---------- ---------- Cash flows from operating activities Loss before taxation (177,604) (591,590) Adjustments for: Finance cost 1,370 1,433 Depreciation of property, plant & equipment 38,181 56,552 Amortisation of other intangible assets 26,484 1,751 Share based payments 16,520 5,196 Changes in working capital Trade and other receivables (183,863) 230,936 Trade and other payables 164,735 (56,421) Net cash used by operations (114,177) (352,143) Tax received 63,873 59,727 Net cash used in operating activities (50,304) (292,416) Cash flows from investing activities Interest paid (1,370) (1,433) Development expenditure (266,109) - capitalised Purchase of property, plant and equipment (43,782) (5,600) Net cash used in investing activities (311,261) (7,033) Cash flows from financing activities Issue of ordinary shares 765,251 115,879 Repayment of borrowings (12,500) (12,500) ------------------------------------- ------ ---------- ---------- Net cash generated from financing 752,751 103,379 ------------------------------------- ------ ---------- ---------- Net increase/(decrease) in cash and cash equivalents 391,186 (196,070) Cash and cash equivalents at beginning of period 29,060 225,130 ------------------------------------- ------ ---------- ---------- Cash and cash equivalents at end of period 16 420,246 29,060 ------------------------------------- ------ ---------- ----------
Statements Of Changes In Shareholders Equity
For the year ended 31 December 2011
Share Share Other Share Accumulated Shareholders' capital premium reserve based losses equity payments reserve Group GBP GBP GBP GBP GBP GBP ---------------- --------- ----------- --------- ---------- ------------- -------------- At 31 December 2009 577,798 10,112,381 630,030 55,004 (11,168,661) 206,552 Shares issued in the year 71,372 44,507 - - - 115,879 Share based payments - - - 5,196 - 5,196 Retained loss for the year - - - - (551,863) (551,863) ---------------- --------- ----------- --------- ---------- ------------- -------------- At 31 December 2010 649,170 10,156,888 630,030 60,200 (11,720,524) (224,236) Shares issued in the year 98,505 666,746 - - - 765,251 Share based payments - - - 16,520 - 16,520 Retained loss for the year - - - - (88,534) (88,534) ---------------- --------- ----------- --------- ---------- ------------- -------------- At 31 December 2011 747,675 10,823,634 630,030 76,720 (11,809,058) 469,001 ---------------- --------- ----------- --------- ---------- ------------- -------------- Company ---------------- --------- ----------- --------- ---------- ------------- -------------- At 31 December 2009 577,798 10,112,381 55,004 (10,543,513) 201,670 Shares issued in the year 71,372 44,507 - - 115,879 Share based payments - - 5,196 - 5,196 Retained loss for the year - - - (531,201) (531,201) --------- ----------- --------- ---------- ------------- -------------- At 31 December 2010 649,170 10,156,888 60,200 (11,074,714) (208,456) Shares issued in the year 98,505 666,746 - - 765,251 Share based payments - - 16,520 - 16,520 Retained loss for the year - - - (96,100) (96,100) ---------------- --------- ----------- --------- ---------- ------------- -------------- At 31 December 2011 747,675 10,823,634 76,720 (11,170,814) 477,215 ---------------- --------- ----------- --------- ---------- ------------- --------------
The other reserve arises because shares issued on the acquisition of subsidiaries have been recorded at par value and no share premium recognised.
Extracts from the notes to the Financial Statements
1.General information
@UK PLC ("the Company") and its subsidiaries (together "the Group)" provides an integrated software platform for eProcurement and eCommerce the trading of goods and services between purchasers such as public sector bodies and their suppliers, along with the analysis and coding of spend and product data. The Group also provides services to new businesses, including incorporation, company secretary services and filing annual returns, using its software platform. The Company is a public limited company which is listed on the Alternative Investment Market of the London Stock Exchange and is incorporated and operates in the UK. The address of the registered office is 5 Jupiter House, Calleva Park, Aldermaston, Berkshire RG7 8NN.
2.Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.
2.1.Basis of accounting
These financial statements have been prepared in accordance with IFRS as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in note 3.
As permitted under Section 408 of the Companies Act 2006 a separate statement of comprehensive income for the parent company has not been presented .
2.2.Going concern
The Group had a loss attributable to shareholders for the year of GBP88,534. The directors have taken steps to take the group to profitability, and more importantly to reduce cash consumption given the remaining cash levels available to the group.
The directors of the Group have prepared detailed projections and cash flow forecasts through to 31 December 2013. In considering these cash flow forecasts, the directors have carefully considered the assumptions and sensitivities and have concluded that the Group can remain within the level of available finance. However, in arriving at this view, the directors are cognisant of the fact that given the nature of the Group's business and in the current economic climate there are inherent risks surrounding the achievability of the Group's forecast sales and margins and the timing of cash flows, including, inter alia, when projected sales will occur and the timing of receipts relating thereto.
These uncertainties are reduced because the group has a dependable forward income stream based on renewable income from public sector buyers and suppliers, and that this income is counter cyclical since it is driven by the requirement for both sides to improve efficiency and cut costs. The income from company formations is cyclical, however since it is paid by credit card, it is reasonably reliable and does not attract credit risk.
The directors of the Group have concluded that the combination of these circumstances does mean the Group is able to continue trading within its current working capital position. Having considered these uncertainties, and given the potential to raise additional finance and or make additional cost savings, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of 12 months from the date the accounts were signed and as such have prepared the accounts on the going concern basis.
2.3.Consolidation
Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies so as to obtain benefit from their activities. Subsidiaries are fully consolidated from the date on which control is transferred until the date control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The investment in subsidiaries in the Company's statement of financial position are shown at cost less provision for diminution in value.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.
2.4.Goodwill
Goodwill arising on acquisitions represents the excess of the consideration given plus any associated costs for investments in subsidiary undertakings over the fair value of the identifiable assets and liabilities acquired. Adjustments are made to fair values to bring the accounting policies of acquired businesses into alignment with those of the Group. Provision is made for any impairment in the value of goodwill. The costs of integrating and reorganising acquired businesses are charged to the post acquisition statement of comprehensive income.
In accordance with IFRS1, the Group has applied the exemption from retrospectively recalculating goodwill which arose on acquisitions prior to 1 January 2006. This goodwill is included at its deemed cost, being the amount recorded under UK GAAP as at 1 January 2006. Goodwill is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. Each of these cash generating units represents the group's investment in each country of operation by primary reporting segment. Goodwill is tested for impairment annually. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2.5.Other intangible assets
Other intangible assets are shown at historical cost less accumulated amortisation and impairment losses.
The costs directly associated with the development of identifiable and unique software products controlled by the Group and that will probably generate economic benefits exceeding costs beyond one year are recognised as intangible assets and amortised over their estimated useful lives. Other research and development expenditure is written-off to the statement of comprehensive income in the year in which it is incurred.
Amortisation is charged to administrative expense in the statement of comprehensive income on a straight-line basis over the estimated useful lives of the intangible asset unless such lives are indefinite. Intangible assets with an indefinite useful life are tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The useful lives are as follows:
- Software - 3 years
- Development expenditure - 3 years
Amortisation periods and methods are reviewed annually and adjusted if appropriate.
2.6.Property, plant and equipment
All are stated at cost less accumulated depreciation.
Depreciation of property, plant and equipment is provided to write each asset down to its estimated residual value on a straight-line basis over its estimated useful life, as follows:
- Computer equipment 3 years
- Fixtures, fittings and equipment 3 to 5 years
Residual values, remaining useful lives and depreciation methods are reviewed annually and adjusted if appropriate.
Gains or losses on disposal are included in the statement of comprehensive income.
2.7.Impairment of assets
The Group assess at each statement of financial position date whether there is any indication that any of its assets have been impaired. If such indication exists, the asset's recoverable amount is estimated and compared to its carrying value.
For goodwill and intangible assets that have an indefinite life and intangible assets not yet available for use, the recoverable amount is estimated at each statement of financial position date and whenever there is an indication of impairment.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive income.
2.8.Financial instruments
Financial assets and financial liabilities are recognised on the group's statement of financial position when the group has become a party to the contractual provisions of the instrument.
2.8.1Trade receivables
Trade receivables are initially recognised at fair value and then subsequently measured at amortised cost using the effective interest rate method. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.
2.8.2.Trade payables
Trade payables are initially recognised at fair value and then subsequently measured at amortised cost using the effective interest rate method. Trade payables are not interest bearing and are stated at their nominal value.
2.8.3.Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of comprehensive income over the period of the borrowings on an effective interest rate basis.
2.8.4.Equity Instruments
Equity instruments are recorded at the proceeds received, net of direct issue costs.
2.9.Share based payments
The group has applied the requirements of IFRS 2: Share-based Payments.
The group issues equity-settled share-based payments to its employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of 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.
Fair value is measured by use of a Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
2.10.Pensions
All pension schemes operated by the Group are defined contribution schemes. The costs are charged to the statement of comprehensive income in the year in which they are incurred.
2.11.Revenue
Revenue is measured at fair value of consideration received or receivable for goods sold and services provided to customers outside the Group, net of Value Added Tax and any discounts. Where invoices are raised in advance of the income being earned through the performance of the service, the unearned portion is included in the accounts as deferred income, and released to the Profit and Loss Account as earned.
2.12.Leases
Rentals payable under operating leases are charged against income on a straight line basis over the lease term. The Group does not hold any assets under hire purchase contracts or finance leases and has not received any benefits as an incentive to sign a lease of whatever type.
2.13.Current and deferred taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of comprehensive income 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 by using tax rates that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount 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 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 which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in jointly controlled entities, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates (and tax laws) that have been enacted or substantively enacted by the statement of financial position date. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
2.14.Provisions
Provisions are recognised in the statement of financial position when there is a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.
2.15.Standards and interpretations not applied
At that date of authorisation of these Financial Statements, the following Standards and Interpretations (International Financial Reporting Interpretation Committee - IFRIC), which have not been applied in these Financial Statements, were in issue but not yet effective:
IFRS 1 First-time Adoption of International Financial Reporting Standards (effective 1 July 2011) IFRS 7 Financial Instruments: Disclosures (effective 1 July 2011) IFRS 9 Classification and Measurement of Financial Instruments (effective 1 January 2013) IFRS 10 Consolidated Financial Statements (effective 1 January 2013) IFRS 11 Joint Arrangements (effective 1 January 2013) IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013) IFRS 13 Fair Value Measurement (effective 1 January 2013) Amendments Presentations of Financial Statements to IAS (effective 1 July 2012) 1 Amendments Income Taxes (effective 1 January 2012) to IAS 12 Amendments Employee Benefits (effective 1 January to IAS 2013) 19 IAS 27 Consolidated and Separate Financial Statements (1 January 2013) IAS 28 Investments in Associates (effective 1 January 2013)
The Directors have considered the above new standards, interpretations and amendments to published standards that are not yet effective and concluded that they are either not relevant to the Group or that they would not have a material impact on the Group's financial statements.
3.Accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
3.1.Critical accounting estimates and judgments
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
- Goodwill has been tested for impairment by comparing the amount of goodwill against future forecast results including cash flows expected to be generated in the future by the appropriate asset, cash-generating unit, or business segment.
- The fair value of share-based payments is measured using a binomial model which inherently makes use of significant estimates and assumptions concerning the future applied by the directors.
4.Revenue - Segmental analysis
The Groups operating segments under IFRS have been determined with reference to the information presented in the management accounts reviewed by the Board of Directors. The Group's main reportable segments are Company Formation and web and eCommerce services. These are managed from one operating platform and cannot be readily separated, so all management decisions in connection with these segments are taken to ensure the relevant skill sets are in place to maximise the return from these resources.
The Chief Operating Decision Maker, which is taken to be the Board of Directors, evaluates the performance and resource requirements of these segments in unison to ensure maximum efficiencies within the business. Resources are shared; in particular technical support and research and development advances are shared between the two in the form of improvements and refinements being made to the underlying platform that hosts them.
The Directors consider the most beneficial method of splitting these segments to provide useful information to users of the accounts is to provide details down to the Gross Profit level only. From then on any further detail would necessitate arbitrary cost allocation that they do not use in managing the business and is not considered meaningful in terms of how resources are actually utilised. Similarly, any split of the statement of financial position assets would involve arbitrary allocation.
Coding International is the Company's 100% trading subsidiary and so these results are extracted from that company's own accounts that are published separately and consolidated into these results in accordance with statutory requirements. Details of the statement of financial position for Coding International Limited can be obtained from those accounts.
The revenue recognised and Gross profit attributable between reportable segments is shown below:
2011 2010 Web Company and Coding Company Web and Coding Formation eCommerce International Formation eCommerce International Services services Limited Total Services services Limited Total GBP GBP GBP GBP GBP GBP GBP GBP Revenue 1,021,698 1,105,648 226,032 2,353,378 1,208,878 669,049 173,110 2,051,037 Cost of Sales (444,969) (104,376) (2,500) (551,845) (577,456) (96,391) - (673,847) Gross Profit 576,729 1,001,272 223,532 1,801,533 631,422 572,658 173,110 1,377,190 ========== =========== ============== ========== =========== =========== ============== ==========
All of the revenue derives from services provided in the United Kingdom. During 2011 one customer for web and ecommerce services was responsible for revenue of GBP297,500, otherwise no single customer was responsible for greater than 10% of the Group's revenues .
Operating loss
2011 2010 GBP GBP ------------------------------------- ---------- ---------- This is stated after the following: Staff costs (see note 7) 1,189,656 1,071,612 Depreciation of property, plant and equipment (see note 13) 38,182 56,552 Amortisation of other intangible assets (see note 12) 26,484 1,751 Research and development costs 307,022 189,450
Auditors remuneration
Amounts payable to Menzies LLP in respect of audit and non-audit services
2011 2010 GBP GBP ----------------------------------- ------- ------- Audit of Company and consolidated accounts 24,820 20,900 Audit of subsidiaries 1,400 1,600 Other services relating to: Taxation 3,650 1,650 Consultancy 4,050 - ----------------------------------- ------- -------
Employees
2011 2010 GBP GBP --------------------------------- ---------- ---------- Staff costs including directors comprised: Wages and salaries 1,059,274 967,053 Social security costs 113,862 99,363 Share based payments 16,520 5,196 --------------------------------- ---------- ---------- 1,189,656 1,071,612 --------------------------------- ---------- ---------- 2011 2010 No. No. --------------------------------------- ----- ----- The average monthly number of persons (including Directors) employed by the Group during the year was: Management and administration 10 11 Technical and delivery 22 19 Sales and marketing 2 2 --------------------------------------- ----- ----- 34 32 --------------------------------------- ----- -----
Directors remuneration
2011 2010 Emoluments for qualifying GBP GBP services: --------------------------- -------- -------- RJ Duncan 78,000 67,625 HL Duncan 78,000 101,375 DJ Holloway - - 31 December 2011 156,000 169,000 --------------------------- -------- --------
All of the payments above relate to salary or fees. None of the Directors receives any benefits or is accruing benefits under a Company pension scheme nor exercised share options in the year.
Finance costs
2011 2010 GBP GBP ------------------------ ------ ------ Interest on borrowings 1,370 1,433 ------------------------ ------ ------
Taxation
2011 2010 GBP GBP ------------------------------------ ---------- ---------- R&D tax credit 55,197 30,000 Adjustment in respect of prior years 33,873 9,726 ------------------------------------ ---------- ---------- Tax credit for the year 89,070 39,726 ------------------------------------ ---------- ---------- Factors affecting tax charge for the year Loss on ordinary activities before taxation (176,234) (591,590) ------------------------------------ ---------- ---------- Loss on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 26.5% (2010: 28%) (46,702) (165,645) ------------------------------------ ---------- ---------- Effects of: Expenses not deductible for tax purposes 530 560 Capital allowances less in excess of depreciation and amortisation (6,527) (1,093) R&D tax credit claim in respect of current year 4,506 4,286 R&D tax relief claim in respect of prior years (33,873) (9,726) Carry forward of tax losses (7,004) 131,892 ------------------------------------ ---------- ---------- (42,368) 125,919 ------------------------------------ ---------- ---------- Total tax credit (89,070) (39,726) ------------------------------------ ---------- ----------
The Group has estimated tax losses of GBP10,600,000 (2010: GBP10,600,000) available for carry forward against future trading profit. No deferred tax asset has been recognised in respect of the losses given the uncertainty regarding available future taxable profits.
Loss per share
The calculations for loss per share are based on the weighted average number of shares in issue during the year 70,172,119 (2010: 60,063,115) and the following losses:
2011 2010 GBP GBP -------------------------------- --------- ---------- Unadjusted earnings: Loss for the year attributable to equity shareholders of the parent (88,534) (551,864) Add back: Share-based payments 16,520 5,196 -------------------------------- --------- ---------- Adjusted earnings (72,014) (546,668) -------------------------------- --------- ----------
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The company has one category of dilutive potential ordinary shares: share options. The company has made a loss and the potential share options are therefore anti-dilutive.
The basic and diluted loss per share calculated on the adjusted earnings is 0.1p (2010: 0.9p).
Goodwill
Provision Cost for impairment Carrying value Group GBP GBP GBP -------------------- ------- ---------------- ---------- 1 January 2010, 31 December 2010 and 2011 96,274 (96,274) - -------------------- ------- ---------------- ----------
Other intangible assets
Computer Development Total software Expenditure Group and Company GBP GBP GBP ------------------------------- ---------- ------------- --------- Cost: 1 January 2010 90,237 90,237 Additions -- -- ------------------------------- ---------- ------------- --------- 1 January 2011 90,237 - 90,237 Additions -- 266,109 -266,109 ------------------------------- ---------- ------------- --------- 31 December 2011 90,237 266,109 356,346 ------------------------------- ---------- ------------- --------- Amortisation: 1 January 2010 88,486 88,486 Charge for the year 1,751 1,751 ------------------------------- ---------- ------------- --------- 1 January 2011 90,237 -- 90,237 Charge for the year - 26,484 26,484 ------------------------------- ---------- ------------- --------- 31 December 2011 90,237 26,484 116,721 ------------------------------- ---------- ------------- --------- Carrying value at 1 January 2010 1,751 - 1,751 ------------------------------- ---------- ------------- --------- Carrying value at 1 January -- - -- 2011 ------------------------------- ---------- ------------- --------- Carrying value at 31 December 2011 -- 239,625 -239,625 ------------------------------- ---------- ------------- ---------
The remaining amortisation period for development expenditure is up to 3 years.
Property, plant and equipment
Fixtures, fittings Computer and equipment equipment Total Group GBP GBP GBP ---------------------------------- --------------- ----------- -------- Cost: 1 January 2010 255,548 691,298 946,846 Additions - 5,600 5,600 ---------------------------------- --------------- ----------- -------- 1 January 2011 255,548 696,898 952,446 Additions - 43,782 43,782 31 December 2011 255,548 740,680 996,228 ---------------------------------- --------------- ----------- -------- Depreciation: 1 January 2010 191,221 666,831 858,052 Charge for the year 41,901 14,651 56,552 ---------------------------------- --------------- ----------- -------- 1 January 2011 233,122 681,482 914,604 Charge for the year 21,308 16,874 38,182 ---------------------------------- --------------- ----------- -------- 31 December 2011 254,430 698,356 952,786 ---------------------------------- --------------- ----------- -------- Carrying value at 1 January 2010 64,327 24,464 88,791 ---------------------------------- --------------- ----------- -------- Carrying value at 1 January 2011 22,426 15,413 37,839 ---------------------------------- --------------- ----------- -------- Carrying value at 31 December 2011 1,118 42,324 43,442 ---------------------------------- --------------- ----------- -------- 14. Property, plant and equipment (continued) Fixtures, fittings Computer and equipment equipment Total Company GBP GBP GBP ---------------------------------- --------------- ----------- -------- Cost: 1 January 2010 254,690 687,862 942,552 Additions - 5,600 5,600 ---------------------------------- --------------- ----------- -------- 1 January 2011 254,690 693,462 948,152 Additions - 43,149 43,149 31 December 2011 254,690 736,611 991,301 ---------------------------------- --------------- ----------- -------- Depreciation: 1 January 2010 190,363 663,398 853,761 Charge for the year 41,901 14,651 56,552 ---------------------------------- --------------- ----------- -------- 1 January 2011 232,264 678,049 910,313 Charge for the year 21,308 16,759 38,067 ---------------------------------- --------------- ----------- -------- 31 December 2011 253,572 694,808 948,380 ---------------------------------- --------------- ----------- -------- Carrying value at 1 January 2010 64,327 24,464 88,791 ---------------------------------- --------------- ----------- -------- Carrying value at 1 January 2011 22,426 15,413 37,839 ---------------------------------- --------------- ----------- -------- Carrying value at 31 December 2011 1,118 41,803 42,921 ---------------------------------- --------------- ----------- --------
Investments
Company GBP ------------------------------------ ------- Subsidiary undertakings (at cost): 1 January 2010 and 2011 and 31 December 2011 61,771 ------------------------------------ ------- Provision for impairment: 1 January 2010 and 2011 and 31 December 2011 30,394 ------------------------------------ ------- Carrying value at 1 January 2010 and 2011 and 31 December 2011 31,377 ------------------------------------ -------
The investments represent the Company's 100% holding in the ordinary shares of @Software PLC and its wholly owned subsidiary Software Limited (incorporated in the United Kingdom; non-trading) and Coding International Limited (incorporated in the United Kingdom; provides coding services for use in procurement). As Coding International Limited's balance sheet showed net liabilities provision was made for impairment in the value of the investment in 2008.
Trade and other receivables
Group ------------------ 2011 2010 GBP GBP ------------------------- -------- -------- Prepayments and accrued income 144,664 55,584 Amounts owed by related - -- undertakings Other receivables 28,861 8,224 Trade receivables 211,020 136,874 384,545 200,682 ------------------------- -------- --------
The Group's financial assets are fairly short term in nature. The directors consider that the carrying value of trade and other receivables approximates to the fair value.
A provision of GBP96,733 was made in 2008 against amounts due from Coding International Limited included within amounts owed by related undertakings above.
Included in the Group's trade and other receivables balances are debtors with a carrying value of GBP7,651 which have been due for a period greater than three months against which a provision of GBP3,290 has been made. The balance and all other balances have been due for less than three months and are considered to be recoverable.
Notes to the cash flow statement
Analysis of changes in net funds/debt
Group ------------------------ 31 December 1 January 2011 2010 -------------------------- ------------ ---------- Cash at bank and in hand 420,246 29,060 420,246 29,060 -------------------------- ------------ ----------
Cash and cash equivalents (which are presented as a single class of asset on the face of the statement of financial position) comprise cash at bank and other short term highly liquid investments with a maturity of three months or less.
Trade and other payables
Group ------------------ 2011 2010 GBP GBP ----------------------- -------- -------- Trade creditors 181,263 167,929 Other taxation and social security 100,030 93,166 Other creditors 44,706 1,250 Accruals and deferred income 329,713 228,630 ----------------------- -------- -------- 655,712 490,975 ----------------------- -------- --------
The Group's financial liabilities are fairly short term in nature and due for payment in a period of less than 6 months. In the opinion of the directors the book values equate to their fair value.
Borrowings
Group ---------------- 2011 2010 GBP GBP ------------------------ ------- ------- Non current: Bank loan 5,842 18,342 Amounts owed to Group - - undertakings ------------------------ ------- ------- 5,842 18,342 ------------------------ ------- ------- Current: Bank loan 12,500 12,500 12,500 12,500 ------------------------ ------- ------- Analysis of maturity of bank loan Amounts payable within one year 12,500 12,500 Amounts payable within one to two years 5,842 12,500 Amounts payable within two to five years - 5,842 Amounts payable after - - five years ------------------------ ------- ------- 18,342 30,842 ------------------------ ------- -------
The bank loan is repayable by instalments until 2013 and bears interest at a rate of 2.5% over the banks base rate. The bank loan is secured by a fixed and floating charge over the Company's assets. The amount owed to Group undertakings has no fixed repayment schedule.
Share capital and share premium
Number Ordinary Share of shares shares premium GBP GBP ---------------------------------- ----------- --------- ----------- At 1 January 2010 57,779,822 577,798 10,112,381 Shares issued in connection with fund-raising 7,137,175 71,372 44,507 ---------------------------------- ----------- --------- ----------- At 31 December 2010 64,916,997 649,170 10,156,888 Shares issued in connection with fund-raising 9,850,455 98,505 666,746 ---------------------------------- ----------- --------- ----------- At 31 December 2011 74,767,452 747,675 10,823,634 ---------------------------------- ----------- --------- -----------
The total authorised number of ordinary shares is 250 million (2010: 250 million) with a par value of 1p each.
On 12 January 2011 5,305,000 ordinary shares in the Company were issued in a placing at 5p per share. On 21 December 2011 a further 4,545,455 shares were issued at 11p per share. The £765,250 in total was raised to provide additional working capital.
Subscribers to the share issues in August 2009 were granted warrants to subscribe for a total of 10 million new ordinary shares at 2p per share. The warrants are exercisable up to five years after issue.
During 2011 the number of options granted under the @UK PLC Share Option Scheme to subscribe for ordinary shares in the Company changed as follows:
2011 2010 Number Weighted Number Weighted average average exercise exercise price price ------------------------- ---------- ---------- ---------- ---------- At 1 January 6,151,540 8.2p 3,083,255 12.8p Options granted during the year - -- 3,150,000 3.5p Options lapsed during the year 50,000 3.5p 81,715 1.75p ------------------------- ---------- ---------- ---------- ---------- At 31 December 6,101,540 8.2p 6,151,540 8.2p ------------------------- ---------- ---------- ---------- ---------- Exercisable at the year end 702,460 50.2p 500,000 45p ------------------------- ---------- ---------- ---------- ----------
The options at 31 December 2011 are as follows:
Number of options under grant Subscription price per share Exercise period
500,000 45p December 2008 to December 2015
202,460 63p January 2009 to January 2016
2,299,080 1.75p August 2012 to August 2019
3,100,000 3.5p October 2013 to October 2020
19. Share capital and share premium (continued)
Share based payments
The Group has a share option scheme under which the Remuneration Committee can grant options over shares in the Company to employees of the Group. Options are granted with a fixed option price equal to the market price of the shares under option at the date of grant. The contractual life of an option is 10 years. The scheme allows for performance criteria or market conditions to be attached to the options, but this has not generally been done. Options are valued using the Black Scholes option pricing model. The fair value of options granted and the assumptions used in the calculations are as follows:
Grant Date 31 Jan 28 Aug 24 Oct 2006 2009 2010 ------------------------- -------- ------------------- ------------------- Share price at grant date 63p 1.6p 3.5p Exercise price 63p 1.75p 3.5p Number of employees 31 37 31 Shares originally under option 644,121 2,930,795 3,150,000 Vesting period (years) 3 3 3 Expected volatility 31% 90% 90% Expected life (years) 4 4 4 Risk free rate 4.30% 2.45% 1.75% Rate ceasing employment before vesting (total) 57% 25% 25% Fair value per option GBP0.15 GBP0.003 GBP0.003
No dividends were assumed. The expected volatility is based on the historical volatility of the Company's shares to the extent information was available and of the shares of similar entities. In addition to the grant above on 8 December 2005, options over 500,000 shares were also granted to former directors of the Company at an exercise price of 45p per share. As part of the terms of their compensation for loss of office in 2006 they were allowed to retain those options. These were valued at the date on which the directors ceased to be employees and the value written off as it was in respect of past services.
Financial instruments
2011 2010 GBP GBP --------------------------------------- -------- ------- Financial assets Floating rate interest bearing - cash 420,246 29,060 --------------------------------------- -------- -------
Cash is held in current or short term deposit account. All other finance assets are non-interest bearing.
Financial liabilities
Floating rate interest bearing - bank loan (see note 17) 18,342 30,842 --------------------------------------- ------- -------
There is no material difference between the book value of financial assets and liabilities noted above, and the fair value.
The main objective of the Groups treasury policy is to protect post-tax cash flows of the business from the adverse effects of financial risks.
The Groups financial assets and liabilities comprise cash and liquid resources, and various items, such as trade receivables and trade payables that arise directly from its operations. The Group has no undrawn borrowing facilities. The Group is not exposed to significant foreign exchange risk.
The Group does not enter into instruments for speculative purposes. The Group is exposed to credit risk predominantly from trade receivables and cash and cash equivalents held with banks. The group's exposure to bad debts is reduced as its major customers tend to be public sector bodies.
The Group finances its operations through funds raised from share issues.
Sensitivity analysis has not been performed as any impact is considered immaterial.
Financial commitments
2011 2010 Present value of future commitments GBP GBP under non-cancellable operating leases: ------------------------------------ -------- ----- Group Land and buildings, falling due - within 1 year 22,318 - - within 2 to 5 years 70,745 - - over 5 years 45,629 -- ------------------------------------ -------- ----- 138,692 - ------------------------------------ -------- ----- Company Land and buildings, falling due - within 1 year 10,909 - - within 2 to 5 years 34,580 - 45,489 - ------------------------------------ -------- -----
Related party transactions
Mr RJ Duncan and Mrs HL Duncan are the landlords of a property which is occupied by the Group. The annual rent is currently GBP24,000. Isabella M Deas Limited, a company owned by Mr Duncan's parents and in which he has a minority interest, is the landlord of a second property which is occupied by the Group. The annual rent is currently £24,000.
At the end of the year Mr RJ Duncan owed GBPNil (2010: £4,838) in respect of services provided by the Company. The opening balance, which represented principal, was also the maximum balance outstanding.
The Company acts as guarantor under the lease for the property occupied by its subsidiary Coding International Limited. The annual rent under the lease which runs for 15 years from March 2011 is £12,550. During the year Coding International Limited charged the Company £50,000 for work performed (2010: GBPnil).
There is no party which has Ultimate control of the Group.
Key management compensation
2011 2010 GBP GBP --------------------- -------- -------- Short term employee benefits 260,000 275,000 Share based payment remuneration 4,311 717 264,311 275,717 --------------------- -------- --------
Share based payment remuneration represents the value of options granted to key management valued as described in note 19.
Post balance sheet event
Since the year end, on 27 February 2012, the Company announced that it had placed 2,781,818 new ordinary shares in the Company at an issue price of 11p per share, raising £0.3million to provide additional working capital.
NOTE TO THE ANNOUNCEMENT
The 2011 Annual Report and Accounts will be sent to shareholders shortly and will be available from the company's website www.uk-plc.net/invest along with the latest research.
The extracts set out above do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2010 which contained an unqualified audit report and which did not make any statements under Section 498 of the Companies Act 2006 have been, and accounts for the year ended 31 December 2011 will be, delivered to the Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
© Copyright
'@UK PLC' is a registered trademark of @UK PLC