IRVINE, Calif.--()--Kofax plc (LSE: KFX), the leading provider of document driven business process automation solutions, today announced its preliminary unaudited results for its financial year ended June 30, 2010.
“The Effects of Changes in Foreign Exchange Rates”
The Company’s results are consistent with the trading update issued on July 26, 2010. Kofax showed significant progress in its software business, with sales execution levels across all segments continuing to improve and again reflecting the early benefits of the strategic initiatives started in February of 2008. These more than offset disappointing results in its hardware business.
Financial Highlights:
- Software business revenues grew 27.4% to $215.8m (2009: $169.4m), driven by strong license and service sales
- Software business adjusted* earnings before interest, taxes and amortisation (EBITA) increased to $24.8m (2009: $13.8m) equating to an 11.5% margin (2009: 8.1%)
- Hardware business revenues declined by 1.7% to $126.6m (2009: $128.8m)
- Hardware business adjusted* EBITA decreased to $1.8m (2009: $8.8m) equating to a 1.4% margin (2009: 6.8%)
- Total revenues grew 14.8% to $342.4m (2009: $298.2m)
- Total adjusted* EBITA increased 17.7% to $26.6m (2009: $22.6m) equating to a 7.8% margin (2009: 7.6%)
- Adjusted** earnings per share (EPS) grew to $0.21 (2009: $0.20)
- Cash generated by operations increased to $33.9m (2009: $15.2m)
- Year end cash totalled $55.0m (2009: $48.1m)
Operating Highlights:
- 170 Systems, acquired during September of 2009, was successfully integrated ahead of schedule and its results were consistent with the Company’s expectations
- Harvey Spencer Associates, a leading analyst firm, reported that during 2009 Kofax increased its overall capture market share to 11% from 10% in 2008
- Over 1,900 new customers were added and the Company closed the two largest software business sales in its history
- Kofax received widespread recognition for its market position and software products
- Eight new software product releases were successfully launched
- The Company continued to transform its executive management team with the recent addition of new Chief Financial and Marketing Officers
Reynolds C. Bish, Chief Executive Officer, said:”Management and the Board are pleased with the progress in our software business, which is now responding well to the strategic initiatives started in February of 2008. We confidently believe we can build upon this positive momentum and strong foundation in our software business and improve results in our hardware business, and the current financial year has already started in a very positive manner. However, the global economic environment is fragile and the extent and continuation of any recovery is difficult to predict. As a result, during this current financial year management and the Board expect approximately 10% revenue growth in our overall software business – with a higher growth rate in software license revenues – and a low single digit percent decline in hardware business revenues in U.S. dollars on a constant currency basis.”
Webcast
There will be a webcast of Kofax’s analyst presentation available on the Company’s website (http://www.kofax.com) from 2:00 pm GMT today.
* For a definition of “adjusted” EBITA, please see the Chief Financial Officer’s Review attached.
** For a definition of “adjusted” EPS please see note 2.
About Kofax plc
Kofax plc (LSE: KFX) is the leading provider of document driven business process automation solutions. For more than 20 years, Kofax has provided award winning solutions that streamline the flow of information throughout an organisation by managing the capture, transformation and exchange of business critical information arising in paper, fax and electronic formats in a more accurate, timely and cost effective manner. Kofax solutions provide a rapid return on investment to thousands of customers in financial services, government, business process outsourcing, healthcare, supply chain and other markets. Kofax delivers these solutions through its own worldwide sales and service organisations, and a global network of more than 700 authorised partners in more than 60 countries throughout the Americas, EMEA and Asia Pacific.
Chief Executive Officer’s Review
Financial Performance
The year ended June 30, 2010 was successful for Kofax, with the Company’s financial results beginning to reflect the anticipated benefits of the strategic initiatives started in February of 2008.
Software Business
Our software business revenues grew 27.4% to $215.8m (2009: $169.4m). This was aided by the acquisition of 170 Systems, Inc. in September of 2009, but these revenues nonetheless grew by an impressive 14.4% on an organic, constant currency basis. This was driven by:
1. Continuing progress with our hybrid go-to-market strategy in the applications software and services area, which resulted in 46% (2009: 28%) of license revenues coming from direct engagements,
2. Improving sales execution across the Americas, EMEA and Asia Pacific in both our applications software and services area and OEM / POS product lines,
3. The acquisition of 170 Systems in September of 2009 and
4. A gradual although not pervasive recovery in the global economic environment.
This growth, coupled with the benefit of cost saving measures implemented in prior years and the ongoing prudent management of expenses, yielded an adjusted EBITA of $24.8m (2009: $13.8m) equating to an 11.5% margin (2009: 8.1%).
Hardware Business
As expected, our hardware business revenues declined by 1.7% to $126.6m (2009: $128.8m) as a result of the increasingly competitive nature of the products distribution portion of this business. More digital scanners of all types have progressively been sold by larger distributors of general purpose information technology products, and end users have recently started purchasing more front office, desktop scanners rather than back office, production level scanners. This latter trend has rapidly accelerated an erosion in both average selling prices and gross margins. All of these factors have resulted in us being less able to leverage our historically important “value added distribution” capabilities and lead to an adjusted EBITA of only $1.8m (2009: $8.8m) equating to a 1.4% margin (2009: 6.8%).
These developments led us in July of 2010 to announce an exceptional charge of $2.5m in the financial year ended June 30, 2010 to restructure the hardware business’ sales, service and administrative functions. These changes will allow us to better manage and realise operational efficiencies in those functions, and should result in annual savings of at least $1.5 million in the current and future financial years. This will in turn better position the business for improved operating results and value as we continue to evaluate the long term strategic value of this business unit.
Total Company
Total revenues grew 14.8% to $342.4m (2009: $298.2m) and our adjusted EBITA grew 17.7% to $26.6m (2009: $22.6m) or a 7.8% margin (2009: 7.6%).
As a result of good operating cash flow generation of $33.9m (2009: $15.2m), we ended the year with total cash of $55.0m (2009: $48.1m) taking into consideration the overdrafts after investing $20.0m on our acquisition of 170 Systems net of cash acquired and $5.3m on capital expenditures.
We are very pleased with the obvious progress in our software business, which more than offset the disappointing results in our hardware business. We look forward to building on the positive momentum and strong foundation in our software business and improving the results in our hardware business.
Operating Highlights and Progress
One of the most notable events during this last financial year was our acquisition of 170 Systems in September of 2009. 170 Systems was a U.S. based company and leading provider of financial process automation software. The company's flagship product, the MarkView® Financial Suite, is a proven workflow solution for invoice processing and accounts payable functions that is fully integrated and certified for use in both SAP and Oracle enterprise resource planning (ERP) environments. This is complemented by 170 MarkView Advisor, the industry's first real time financial process performance management and cash flow optimisation software, and SupplierExpress, a software application that streamlines supplier interaction and enables more timely, accurate payments. As long time business partners, the 170 Systems and Kofax software products had been successfully integrated prior to the acquisition and deployed at numerous customer sites.
This acquisition was consistent with our stated acquisition strategy and positioned the Company for leadership in the important and rapidly growing invoice processing market. The combination of the 170 Systems and Kofax Capture, Transformation Modules and e-Transactions software now allows us to provide the complete invoice processing solution end users desire, incorporating paper as well as electronic invoice capture and accounts payable workflow capabilities. Our integration of 170 Systems was substantially completed by December 31, 2009 and its results have been consistent with our original expectations.
In August of 2010, Harvey Spencer Associates, the leading independent capture software and services market analyst firm, published its annual report, which notes that:
1. The overall market is expected to expand from $2 billion in 2009 to over $3 billion in 2013 at a compound annual growth rate of almost 11%,
2. Kofax increased its overall market share to 11% during 2009 from 10% in 2008,
3. We maintained our dominant leadership position in the “Image Capture” segment, which is defined as the scanning, indexing and exporting of document images and data for archive purposes with a 25% share and
4. We, for the first time, achieved a leadership position in the “Transaction Capture” segment, which is defined as the scanning, classifying, extracting critical business data and exporting of document images and data to downstream business processes with a 13% share.
It’s clear that we’re pursuing a large and growing market opportunity, and, in a significant reversal of past years, we’ve started to once again increase our overall market share. In addition, we now have a solid leadership position in both segments that comprise the “enterprise” portion of the market, which accounts for more than 64% of the total.
During this last financial year we successfully added over 1,900 new customers, not including those arising as a result of our acquisition of 170 Systems, and closed significantly more six and seven figure software business sales. For example, we closed 17 sales greater than $0.5m (2009: 10), representing a 70% increase, and nine greater than $1.0m (2009: 5), an 80% increase. These included the two largest such sales in the history of Kofax – one for $5.9m to a leading global freight transport and services company and another for $4.4m to a major North American financial services firm. All of these achievements were the direct result of the progress we’ve had in implementing our hybrid go-to-market strategy.
During the year we were also pleased to receive widespread recognition for our market position and products. This included:
- The Company being named as the highest performing vendor in the automated accounts payable market by Aberdeen Group in its annual e-Payables AXIS report
- Kofax e-Transactions being named a 2009 KMWorld magazine Awards Finalist
- A “Best Channel Product” award for our Kofax Capture software from Business Solutions magazine
- The Company being named number 164 on Software Magazine’s 27th Annual “Software 500” ranking of the world’s largest software and service providers
- The Company being ranked number 19 on the “Truffle 100” list of Europe’s largest software vendors
- As outlined above, Kofax again being recognized as a global leader in the capture market by Harvey Spencer Associates
In this last financial year we also successfully launched eight new software product releases:
- Kofax Capture 9.0, to better enable enterprise wide deployments
- Kofax Transformation Modules 4.5 and 5.0, to enhance our support for enterprise wide deployments, let customers more easily leverage large, distributed workforces and provide improved invoice processing capabilities
- Front Office Server 2.7 and 3.0, which rebranded our Document Exchange Server product, implemented more collaborative functions such as scan-to-email, scan-to-fax and a thin client desktop scanner application for office automation needs and offers better integration with Kofax Capture and Transformation Modules
- Kofax Express 2.0, to enhance the ease of use and functionality of this all-in-one scan-to-archive product
- Kofax Desktop 2.0, to add full text optical character recognition (OCR) capabilities and internationalize this entry level desktop scanning product that makes scanning as easy as printing by seamlessly embedding these capabilities within Microsoft Office 2007 applications
- MarkView Financial Suite 6.5, to more seamlessly integrate 170 Systems’ flagship product with Kofax Capture, Transformation Modules and e-Transactions and extend its international language support
Corporate Mission and Strategies
Our software business is now responding very well to the strategic initiatives started in February of 2008. As a result, our mission remains the same – to be the leading provider of document driven business process automation solutions. We will pursue this mission by automating manual, paper based document processes, ingesting electronic documents and automating related, synergistic business processes. In essence, by providing the more complete and compelling solutions our customers desire and need to realise an acceptable return-on-investment. Over time this will significantly expand our vision beyond the capture market to encompass additional growth opportunities.
We intend to accomplish our mission by:
1. Delivering organic software business revenue growth that meets or exceeds capture market growth rates while attempting to maintain our hardware business revenues,
2. Continuing to transform both our software and hardware business models to improve their adjusted EBITA margins,
3. Controlling costs to meet or exceed our adjusted EBITA objectives and
4. Augmenting our organic revenue growth and adjusted EBITA with strategic acquisitions of complementary software companies and products.
Specific revenue growth strategies in our software business include:
1. Continuing to improve our overall market reach, sales execution and productivity via our hybrid go-to-market strategy,
2. Reinvigorating and carefully adding new channel partners,
3. Better selling our higher value proposition, transaction capture products,
4. Migrating our larger, existing end users from tactical to enterprise wide deployments and
5. Expanding the channel for our OEM / POS product lines.
We will also look to exploit potential growth opportunities in our hardware business by adding to our existing product offerings.
We made a great deal of progress in many of these areas during this last financial year and created a solid foundation for more aggressively pursuing our mission and strategies during the current and future financial years.
Dividend Matters
After careful consideration of the Company’s future opportunities, the Board intends to maintain its policy of not paying a regular dividend in order to invest in better growing the Company’s software business. As a result, no dividends were declared or paid during the year ended June 30, 2010.
Board and Management Changes
We continued to transform our executive management team with seasoned professionals possessing extensive enterprise software experience. This included the addition of Jamie Arnold as our Chief Financial Officer and an Executive Director during June of 2010, and Martyn Christian as our Chief Marketing Officer during July 2010. Both individuals possess many years of directly relevant experience and have already started contributing to our success.
In conjunction with Jamie Arnold’s appointment as our Chief Financial Officer and an Executive Director, Stefan Gaiser resigned from those positions. No other Board changes occurred during the year ended June 30, 2010.
Outlook
Kofax’s last financial year ended positively with substantial progress in our software business, which is now responding very well to the strategic initiatives started in February of 2008. While we confidently believe we can build upon this positive momentum and strong foundation in our software business and improve the results in our hardware business, the global economic environment is fragile and the extent and continuation of any recovery difficult to predict.
As a result, during this current financial year management and the Board expect approximately 10% revenue growth in the Company's overall software business – with a higher growth rate in software license revenues – and a low single digit percent decline in its hardware business revenues in U.S. dollars on a constant currency basis.
Thank You
Our performance is the direct result of the dedication and hard work of our valued employees, channel partners and suppliers, and the continued support of our customers and shareholders. I would like to use this opportunity to sincerely thank all of these stakeholders for their ongoing contributions to our success.
| Reynolds C. Bish |
| Chief Executive Officer |
| September 6, 2010 |
Chief Financial Officer’s Review
Overview
Against a backdrop of improving but still challenging market conditions, 2010 was a tale of two businesses. Our software business overachieved for both the second half and the full year because our software solutions provide a very quick return on investment and our switch to a more direct sales model has proven effective. However, competitive challenges, including pricing pressures, resulted in our hardware business underachieving against anticipated revenues and operating results. As management continues to drive for increased profitability in both businesses and directly as a result of some of the inherent challenges seen in the 2010 results for the hardware business, we initiated a modest restructuring of that business in June 2010 which more effectively aligns our cost with expected revenues.
As previously discussed, we changed our presentational currency into US Dollars. Details on this change are reflected in Note 1.
In 2010, total revenues grew 14.8% or $44.2m, to $342.4m. The software business grew 27.4% during the period with 14.4% organic constant currency growth. While achieving this significant organic and acquisitive revenue growth, we substantially completed our transformation of the sales organisation to our hybrid go-to-market strategy as evidenced by substantially increasing revenues from direct sales where in the second half of the year we achieved 48% direct sales compared to 42% in first half and 28% in the second half of 2009. The hardware business declined by 1.7% for the year (a 3.3% decline in organic constant currency). Total gross margin was 54.3% up from 52.3% in 2009.
Adjusted EBITA (also known as adjusted operating profit) increased 17.7% or $4.0m, to $26.6m resulting from a nominal increase in adjusted operating margin. We continued to invest in sales personnel and marketing programs with those expenses rising from 22.3% of revenue to 26.1%. R&D was down as percentage of sales as we began to realise the benefits of cost saving measures previously announced and benefits from our ability to leverage our lower cost offshore engineering facilities. G&A was down both in nominal dollars and as a percentage of revenue as we also began to realise the benefits of cost saving measures previously announced and reap the benefits from our recently upgraded corporate infrastructure. These changes create a much stronger and more scalable foundation to support the Company’s future growth.
With our enhanced focus on cash we reduced days sales outstanding in accounts receivable to 67 days from 82 and increased our cash flow from operations before restructuring from $15.2m to $33.9 million.
Trading Results
For the year, revenues grew by 14.8% to $342.4m (2009: $298.2m). In organic constant currency terms, total revenues grew by 6.8%. The software business grew by 27.4% (14.4% in organic constant currency) with application software revenues increasing 29.6% and the OEM / POS software business rebounded with an increase of 12.5%. Our total software business revenues now amount to $215.8m and represent 63.0% of total revenues. The remaining revenue is derived from our hardware distribution and maintenance business which declined 1.7% (a 3.3% decrease in constant currency terms) to $126.6m.
Adjusted operating profit increased 17.7% from $22.6m to $26.6m. Cost of sales increased to $156.3m from $142.1m due largely to cost of sales associated with revenue from 170 Systems products. Total operating expenses increased from $133.5m to $159.5m, up 19.5% due to increased personnel expenses largely due to the acquisition of 170 Systems and additional investments in sales and marketing across the Company. Amortisation of acquired intangible assets, included under operating expenses, increased to $4.6m from $4.4m. Share based payment charges increased to $4.4m compared to $1.3m in the previous year as the prior year charge was comparably low due to forfeitures of share-based incentives. In addition, we incurred an exceptional charge of $2.5m in the second half of the year ended June 30, 2010 related to restructuring the hardware organisation. The restructuring affected our hardware sales, services and administrative functions and was substantially completed in June.
In the first half of this past financial year, adjusted operating profit was $10.0m, a margin of 6.0% on total revenues of $168.3m. In the second half adjusted operating profit was $16.6m, with a margin of 9.5% on total revenues of $174.1m. This split reflects our seasonal sales pattern with a slow first quarter followed by significantly stronger subsequent quarters.
Adjusted earnings per share (EPS) increased to $0.208 (2009: $0.202). A reconciliation of adjusted profit is provided in the table below.
|
Reconciliation of Adjusted Profit |
2010 |
2010 |
2009 |
2009 |
||||||||
|
Year Ended 30 June |
EPS in $ |
$’000 |
EPS in $ |
$’000 |
||||||||
| Profit for the period attributable to the equity holders of the parent | 0.093 | 7,616 | 0.10 | 8,244 | ||||||||
| Amortisation of acquired intangible assets | 0.056 | 4,628 | 0.053 | 4,408 | ||||||||
| Restructuring costs | 0.031 | 2,538 | 0.066 | 5,455 | ||||||||
| Share-based payment charge | 0.054 | 4,415 | 0.016 | 1,318 | ||||||||
| Financial income and expense & other | (0.015 | ) | (1,255 | ) | (0.007 | ) | (597 | ) | ||||
| Tax effect of above | (0.011 | ) | (907 | ) | (0.025 | ) | (2,086 | ) | ||||
| Adjusted profit for the period attributable | ||||||||||||
| To the equity holders of the parent | 0.208 | 17,035 | 0.203 | 16,742 | ||||||||
| Basic earnings per share decreased to $0.093 (2009: $0.100). | ||||||||||||
| Diluted earnings per share decreased to $0.090 (2009: $0.100). | ||||||||||||
|
Software Business Revenue Breakdown |
||||||||||||
|
Software Business Revenue |
2010 |
2009 |
% change organic constant |
|||||||||
|
Year Ended 30 June |
$m |
$m |
YoY |
currency |
||||||||
| Applications Software Licences | 87.1 | 71.4 | 22.0 | % | 15.4 | % | ||||||
| Applications Software Services | 104.1 | 76.1 | 36.8 | % | 14.0 | % | ||||||
| Total Applications Software | 191.2 | 147.5 | 29.6 | % | 14.7 | % | ||||||
| OEM / POS Software Licences | 24.6 | 21.9 | 12.3 | % | 12.8 | % | ||||||
| Total Software Business | 215.8 | 169.4 | 27.4 | % | 14.4 | % | ||||||
Total applications software revenues grew 29.6% for the year, with the increase mainly due to strong performance in application services in the Americas as well as revenue from our acquisition of 170 Systems. Our application software licence revenues increased 22.0% due to growth in our core business and contributions from the 170 Systems acquisition. Applications software services revenue increased 36.8% with 14.0% growth from our core business, on the heels of a 26.1% increase the prior year, enhanced by the contribution from our acquisition of 170 Systems. The growth in our core services was largely driven by an increase in software maintenance revenues.
Our OEM / POS software business rebounded in 2010 with an increase of 12.3% after declining 15.5% in 2009. The increase is attributable to two factors: the overall market for capital expenditures has improved slightly from the prior year, thus increasing scanner sales being shipped with VRS on an OEM basis and increased traction with Kofax Express.
|
Hardware Business Revenue Breakdown |
||||||||||||
|
Hardware Business Revenue |
2010 |
2009 |
organic constant |
|||||||||
|
Year Ended 30 June |
$m |
$m |
% |
currency |
||||||||
| Hardware Products | 90.8 | 92.6 | (1.9 | %) | (3.4 | %) | ||||||
| Hardware Services | 35.8 | 36.2 | (1.1 | %) | (2.8 | %) | ||||||
| Total Hardware Business | 126.6 | 128.8 | (1.7 | %) | (3.3 | %) | ||||||
Hardware revenues in total decreased 1.7%. Hardware product revenues decreased 1.9% and hardware service revenues decreased 1.1%. The performance of the hardware business was negatively affected by increased pricing competition as broadline distributors continued to expand into our traditionally strong space. However, based on data available we believe we have nonetheless increased our market share with key suppliers and therefore have strengthened our market position. Our maintenance revenues increased but were offset by lower installation and other services.
|
Revenue by Geographic Segments |
|||||||||||||||||||||||||||||||
| Geographic Segments |
Americas |
EMEA | Asia-Pacific | Total | |||||||||||||||||||||||||||
| Year Ended 30 June | $m | YoY % | $m | YOY % | $m | YOY % | $m | YOY % | |||||||||||||||||||||||
| Applications Software Licences | 36.8 | 22.1 | % | 42.0 | 17.0 | % | 8.3 | 56.0 | % | 87.1 | 22.0 | % | |||||||||||||||||||
| Applications Software Services | 52.9 | 79.5 | % | 44.0 | 6.7 | % | 7.2 | 35.8 | % | 104.1 | 36.8 | % | |||||||||||||||||||
| Total Applications Software | 89.7 | 50.5 | % | 86.0 | 11.5 | % | 15.5 | 46.0 | % | 191.2 | 29.6 | % | |||||||||||||||||||
| OEM / POS Software Licenses | 21.2 | 19.2 | % | 3.3 | (16.5 | %) | 0.1 | (14.9 | %) | 24.6 | 12.3 | % | |||||||||||||||||||
|
Total Software Business |
110.9 |
43.3 |
% |
89.3 |
10.1 |
% |
15.6 |
45.1 |
% |
215.8 |
27.4 |
% |
|||||||||||||||||||
| Hardware Products | - | - | 90.8 | (1.8 | %) | - | - | 90.8 | (1.9 | %) | |||||||||||||||||||||
| Hardware Services | - | - | 35.7 | (0.5 | %) | 0.1 | - | 35.8 | (1.1 | %) | |||||||||||||||||||||
|
Total Hardware Business |
- |
- |
126.5 |
(1.4 |
%) |
0.1 |
- |
126.6 |
(1.7 |
%) |
|||||||||||||||||||||
|
Total Revenues 2010 |
110.9 |
43.3 |
% |
215.8 |
3.0 |
% |
15.7 |
39.7 |
% |
342.4 |
14.8 |
% |
|||||||||||||||||||
| Total Revenues 2009 | 78.0 | - | 209.1 | - | 11.1 | - | 298.2 | - | |||||||||||||||||||||||
Revenue in the Americas increased overall by 43.3%. Applications software revenues grew 50.5%, driven principally because of continued success with direct sales for enterprise accounts and revenues from the 170 Systems acquisition. The growth in our services revenues is primarily attributable to increased maintenance revenue in our core business driven by greater emphasis on the value of this offering and our efforts to ensure renewals. The growth in OEM / POS revenues, most of which are included in this region, amounted to 19.2%.
Total revenue in EMEA grew by 3.0% with a 11.5% growth in applications software revenues and a 1.4% decrease in hardware revenues. For our software business, we offset declines in channel revenue with the increased productivity of the direct sales force. As noted above the hardware business struggled in the face of increased pricing pressure from broadline distributors and a reduced need for installation and other professional services.
Applications software revenues in Asia Pacific increased by 46.0% (an increase of 30.4% in constant currency), driven almost equally by increases in license and service revenues. As we rebuild our Asia Pacific operations, our new sales leadership achieved increasingly strong results, especially in the second half of the financial year.
Research and Development Expenditures
We continued to invest in our market leading software products through research and development at 9.7% of revenue but have taken steps to reduce our expenditures in line with other cost reductions made in the business. For the period, research and development costs totalled $33.0m (2009: $29.1m) which represents a 13.4% increase (2009: 4.0%). This increase is largely due to personnel added with the 170 Systems acquisition. We plan to further reduce these expenses as a percent of total software revenues during the new financial year.
Taxation
The tax charge for the year ended June 30, 2010 of $8.6m reflects a tax rate on profit before tax of 53.2% (2009: 31.3%). This increase is largely due to increase in share based payments charges and a change in mix of where profits are earned and benefits taken. The amortisation of intangible assets, and the share based payment expense are, for the most part, not deductible for tax purposes. The effective tax rate on adjusted profit before tax is reported at 35.9% (2009: 25.8%) and we anticipate this remaining in this range after considering the earnings mix and ability to utilise prior year tax losses. Adjusted profit before tax is defined as profit before tax adding back the amortisation of acquired intangible assets, restructuring charges, share based payment charges and financial income and other income and expenses, as provided net in the table below.
|
Reconciliation of Adjusted Profit Before Tax |
2010 |
2009 |
||||
|
Year Ended 30 June |
$’000 |
$’000 |
||||
| Profit on ordinary activities before taxation | 16,264 | 11,992 | ||||
| Amortisation of acquired intangible assets | 4,628 | 4,408 | ||||
| Restructuring costs | 2,538 | 5,455 | ||||
| Share based payment charges | 4,415 | 1,318 | ||||
| Net financial income and expense and other income and expenses |
(1,255 |
) |
(597 |
) |
||
| Adjusted operating profit before tax | 26,590 | 22,576 | ||||
| Tax expense | 8,648 | 3,748 | ||||
| Tax effect of above | 907 | 2,086 | ||||
| Adjusted tax expense | 9,555 | 5,834 | ||||
| Adjusted effective tax rate | 36 | % | 26 | % |
Balance Sheet
The consolidated balance sheet remained strong with shareholders equity reported at $179.3m (2009: $175.1m). The net funds position was $41.5m (2009: $46.8m), with cash and cash-equivalents of $55.5m (2009: $49.3m) held at year end.
Cash Flow
Operating cash flow generation increased substantially. During the year ended June 30, 2010, Kofax generated $33.9m of operating cash flows before exceptionals (2009: $15.2m), turning 127% (2009: 67%) of adjusted operating profit into operating cash flow. As a result of the restructuring previously effected, the Company incurred a cash outflow of $3.5m (2009: $5.2). The remaining provision amounts to $2.3m, of which the majority will be settled in the 2011 financial year.
We made an initial payment of $20m for the acquisition of 170 Systems. In addition we invested $5.3m in property, plant, equipment and other capital items. As described earlier, the company deployed a standard global accounting and sales order entry system, which was a much needed improvement, and made other significant investments to upgrade its corporate infrastructure. These outflows were offset with interest received and the disposal of fixed assets, resulting in a net cash outflow from investing activities of $22.7m.
Cash inflow from financing activities amounted to $9.2m.
Treasury Management
The Company has continued to generate solid cash flows. Kofax’s policy has been to fund its operations internally through the use of retained earnings, equity and bank facilities. Material bank borrowing arrangements are negotiated by management and approved by the Board of Directors. Positive cash balances earn floating rate interest based on relevant national interbank rates.
During 2009, the Company signed a credit facility of £16m with a major European bank. The credit facility remains in place until September 2011 and is unsecured.
The Company has significant overseas subsidiaries, which operate principally in their local currencies. Where appropriate, intra group borrowings are arranged in local currencies to provide a natural hedge against exchange rate movement risks.
During 2009, Kofax discontinued the use of foreign currency swaps. The swaps did not qualify for hedge accounting and therefore gains or losses were recorded in the income statement, and shown along with the gains or losses arising on the translation of intercompany loans. No loss was recorded in the income statement in financial year ($0.5m in 2009).
Ordinary Share Matters
At the Annual General Meeting on 5 November 2009 the shareholders approved the Board’s authority to buy back up to ten percent of Kofax’s issued share capital for a period of one year or the next Annual General Meeting should it occur at an earlier date. During this past financial year the Company bought back none of its ordinary shares.
At the beginning of this financial year Kofax had 90.5m ordinary shares issued. During the year 0.8m shares were issued to satisfy the exercise of stock options. On 30 June 2010, the Company therefore had 91.3m ordinary shares issued, of which 5.1m were held in treasury and 3.6m were held in the Company’s employee benefit trust.
| J. R. Jamie Arnold, Jr |
| Chief Financial Officer |
| September 6, 2010 |
|
Unaudited Consolidated Income Statement |
||||||||||
|
$’000 |
Note |
Year to |
Year to |
|||||||
| Software Licenses | 87,165 | 71,413 | ||||||||
| Software Services | 104,069 | 76,115 | ||||||||
| OEM/POS | 24,604 | 21,863 | ||||||||
| Total Software Revenue | 215,838 | 169,391 | ||||||||
| Hardware Distribution | 90,826 | 92,613 | ||||||||
| Hardware Services | 35,758 | 36,191 | ||||||||
| Total Hardware Revenue | 126,584 | 128,804 | ||||||||
| Total Revenue | 4 | 342,422 | 298,195 | |||||||
| Cost of Sales | (156,327 | ) | (142,105 | ) | ||||||
| Gross Profit Software | 165,908 | 130,323 | ||||||||
| Gross Profit Hardware | 20,187 | 25,767 | ||||||||
| Total Gross Profit | 186,095 | 156,090 | ||||||||
| Research and Development | (33,038 | ) | (29,125 | ) | ||||||
| Sales and Marketing | (89,483 | ) | (66,355 | ) | ||||||
| General and Administrative | (36,984 | ) | (38,034 | ) | ||||||
| Expenses | (159,505 | ) | (133,514 | ) | ||||||
| Adjusted operating profit before* | 26,590 | 22,576 | ||||||||
| Amortisation of acquired intangible assets | (4,628 | ) | (4,408 | ) | ||||||
| Restructuring costs | (2,538 | ) | (5,455 | ) | ||||||
| Share-based payment expense | (4,415 | ) | (1,318 | ) | ||||||
| Other income and expenses | 90 | - | ||||||||
| Operating profit | 15,099 | 11,395 | ||||||||
|
Share of results and disposal of associated
undertakings |
(33 | ) | 173 | |||||||
| Finance income | 1,997 | 1,432 | ||||||||
| Finance expense | (799 | ) | (1,008 | ) | ||||||
| Profit before tax | 16,264 | 11,992 | ||||||||
| Tax expense | (8,648 | ) | (3,748 | ) | ||||||
| Profit for the year attributable to | 7,616 | 8,244 | ||||||||
| Equity holders of the parent | ||||||||||
| Earnings per share | 2 | |||||||||
| > basic | $ | 0.093 | $ | 0.100 | ||||||
| > diluted | $ | 0.090 | $ | 0.100 | ||||||
| > adjusted basic | $ | 0.208 | $ | 0.203 | ||||||
| > adjusted diluted | $ | 0.201 | $ | 0.202 | ||||||
| * Adjusted operating profit is a key performance indicator (“KPI”) used by the group to help in assessing the underlying trading results of the Group. | ||||||||||
|
1) June 2009 comparative numbers have been converted as a result of the change in presentation currency as outlined in Note 1. |
||||||||||
|
Unaudited Consolidated Statement of Comprehensive Income |
||||||||
| $’000 | Note |
Year to
|
Year to |
|||||
| Profit for the year | 7,616 | 8,244 | ||||||
| Other comprehensive income/losses | ||||||||
| Exchange losses arising on translation of foreign operations | (9,173 | ) | (10,558 | ) | ||||
| Actuarial losses on defined benefit pension plans | (676 | ) | (798 | ) | ||||
| Income tax effects on components of other comprehensive income | 1,082 | (201 | ) | |||||
| Other comprehensive losses for the period, net of tax | (8,767 | ) | (11,557 | ) | ||||
| Total comprehensive losses for the period, net of tax, attributable to Equity holders of the parent | (1,151 | ) | (3,313 | ) | ||||
|
1) June 2009 comparative numbers have been converted as a result of the change in presentation currency as outlined in Note 1. |
||||||||
|
Unaudited Consolidated Statement of Financial Position |
||||||||
| $’000 |
Note |
At |
At |
|||||
|
|
||||||||
| Non-current assets | ||||||||
| Intangible assets | 164,089 | 135,218 | ||||||
| Property, plant and equipment | 7,879 | 9,808 | ||||||
| Deferred tax assets | 6,110 | 8,441 | ||||||
| Investments | - | 2,252 | ||||||
| Other non-current assets | 4,176 | - | ||||||
| Total non-current assets | 182,254 | 155,719 | ||||||
| Current assets | ||||||||
| Inventories | 16,380 | 15,902 | ||||||
| Trade and other receivables | 83,769 | 95,623 | ||||||
| Investments-current | 311 | 348 | ||||||
| Current tax assets | 10,075 | 2,173 | ||||||
| Cash and cash-equivalents | 6 | 55,451 | 49,294 | |||||
| Total current assets | 165,986 | 163,340 | ||||||
| Total assets | 348,240 | 319,059 | ||||||
| Current liabilities | ||||||||
| Trade and other payables | 63,999 | 62,281 | ||||||
| Deferred income - current | 58,216 | 47,049 | ||||||
| Other financial liabilities | 7,802 | 2,531 | ||||||
| Current tax liabilities | 9,386 | 2,156 | ||||||
| Provisions – current | 2,645 | 5,531 | ||||||
| Total current liabilities | 142,048 | 119,548 | ||||||
| Non-current liabilities | ||||||||
| Other payables | 1,403 | 3 | ||||||
| Employee Benefits | 3,769 | 3,048 | ||||||
| Deferred income – non current | 10,238 | 10,127 | ||||||
| Deferred tax liabilities | 10,866 | 10,488 | ||||||
| Provision – non current | 646 | 717 | ||||||
| Total non-current liabilities | 26,922 | 24,383 | ||||||
| Total liabilities | 168,970 | 143,931 | ||||||
| Net assets | 179,270 | 175,128 | ||||||
| Capital and reserves | ||||||||
| Share capital | 3 | 4,152 | 4,121 | |||||
| Share premium account | 5,519 | 3,880 | ||||||
| ESOP shares | (14,518 | ) | (14,478 | ) | ||||
| Treasury shares | (15,980 | ) | (15,980 | ) | ||||
| Merger Reserve | 2,835 | 2,835 | ||||||
| Retained earnings | 180,853 | 170,146 | ||||||
| Currency translation adjustment | 16,409 | 24,604 | ||||||
| Shareholder’s equity | 179,270 | 175,128 | ||||||
| Total equity | 179,270 | 175,128 | ||||||
|
1) June 2009 comparative numbers have been converted as a result of the change in presentation currency as outlined in Note 1. |
||||||||
|
Unaudited Consolidated Statement of Changes in Equity |
|||||||||||||||||||||
| $’000 |
Share |
Share |
ESOP |
Treasury |
Merger |
Retained |
Currency |
Total |
|||||||||||||
| Group at 1 July 2008 | 4,093 | 2,661 | (14,630 | ) | (7,878 | ) | 2,835 | 163,998 | 35,282 | 186,361 | |||||||||||
| Profit for the period | - | - | - | - | - | 8,244 | 8,244 | ||||||||||||||
| Other comprehensive income, net of tax | - | - | - | - | - | (879 | ) | (10,870 | ) | (11,749 | ) | ||||||||||
| CTA recycling | - | - | - | - | - | - | 192 | 192 | |||||||||||||
| Dividends paid | - | - | - | - | - | (2,004 | ) | - | (2,004 | ) | |||||||||||
| Share-based payment charge | - | - | - | - | - | 787 | - | 787 | |||||||||||||
| Share buy back | - | - | - | (8,102 | ) | - | - | - | (8,102 | ) | |||||||||||
| Changes in ESOP shares | - | - | 152 | - | - | - | - | 152 | |||||||||||||
| New share capital issued | 28 | 1,219 | - | - | - | - | - | 1,247 | |||||||||||||
| Group at 30 June 2009 | 4,121 | 3,880 | (14,478 | ) | (15,980 | ) | 2,835 | 170,146 | 24,604 | 175,128 | |||||||||||
| Group at 1 July 2009 | 4,121 | 3,880 | (14,478 | ) | (15,980 | ) | 2,835 | 170,146 | 24,604 | 175,128 | |||||||||||
| Change in accounting policy of 170 Systems1) | - | - | - | - | - | (752 | ) | - | (752 | ) | |||||||||||
| Group at 1 July 2009 (restated) | 4,121 | 3,880 | (14,478 | ) | (15,980 | ) | 2,835 | 169,394 | 24,604 | 174,376 | |||||||||||
| Profit for the period | - | - | - | - | - | 7,616 | - | 7,616 | |||||||||||||
| Other comprehensive income, net of tax before foreign exchange recycling | - | - | - | - | - | (572 | ) | (8,260 | ) | (8,832 | ) | ||||||||||
| CTA recycling | - | - | - | - | - | - | 65 | 65 | |||||||||||||
| Share-based payment charge | - | - | - | - | - | 4,415 | - | 4,415 | |||||||||||||
| Changes in ESOP shares | - | - | (40 | ) | - | - | - | - | (40 | ) | |||||||||||
| New share capital issued | 31 | 1,639 | - | - | - | - | - | 1,670 | |||||||||||||
| Group at 30 June 2010 | 4,152 | 5,519 | (14,518 | ) | (15,980 | ) | 2,835 | 180,853 | 16,409 | 179,270 | |||||||||||
|
1) Following the adoption of International Financial Reporting Standards (“IFRS”) 3R “Business Combinations,” the transaction costs in 2009 amounting to $0.8m have been adjusted against retained earnings. There is no impact on the opening balance sheet at 1 July 2008 therefore, a third balance sheet was not presented. |
|||||||||||||||||||||
|
Unaudited Consolidated Statement of Cash Flows |
||||||
| In $'000 | Note |
Year to 30 |
Year to 30 |
|||
|
|
||||||
| Translated1) | ||||||
| Cash flows from operating activities | ||||||
| Profit before tax | 16,264 | 11,992 | ||||
| Share results of associated undertakings | (145 | ) | (173 | ) | ||
| Finance income | (1,997 | ) | (1,432 | ) | ||
| Finance expense | 799 | 1,008 | ||||
| Depreciation and amortisation | 11,065 | 8,702 | ||||
| Share-based payment expense | 4,415 | 889 | ||||
| Movement in provisions | 1,000 | 5,211 | ||||
| Loss on disposal of property, plant and equipment | 116 | 43 | ||||
| Movement in working capital | 2,350 | (11,062 | ) | |||
| Cash generated from/used in operations before restructuring | 33,867 | 15,178 | ||||
| Payments under restructuring | (3,504 | ) | (5,214 | ) | ||
| Cash generated from/used in operations | 30,363 | 9,964 | ||||
| Income tax paid | (7,021 | ) | (1,926 | ) | ||
| Net cash inflow/(outflow) from operating activities | 23,342 |
8,038 |
||||
| Cash flows from investing activities | ||||||
| Purchase of property, plant and equipment, licences and similar rights | (5,315 | ) |
(12,508 |
) |
||
| Disposal of property, plant and equipment, licences and similar rights | 17 |
153 |
||||
| Acquisition of a subsidiary, net of cash acquired | (19,998 | ) | (2,681 | ) | ||
| Disposal of associates | 2,282 | - | ||||
| Interest received | 294 | 944 | ||||
| Net cash (outflow)/inflow from investing activities | (22,720 | ) |
(14,092 |
) |
||
| Cash flows from financing activities | ||||||
| Issue of share capital | 1,670 | 1, 247 | ||||
| (Decrease)/Increase in short term borrowings | (1,312 | ) | 859 | |||
| Increase in long term borrowings | 9,000 | - | ||||
| Share buy back | - | (7,023 | ) | |||
| Dividends paid to shareholders | - | (2,004 | ) | |||
| Currency swap | - | 1,621 | ||||
| Interest paid | (168 | ) | (305 | ) | ||
| Net cash inflow/(outflow) from financing activities | 9,190 |
(5,605 |
) |
|||
| Net increase/(decrease) in cash and cash-equivalents in the period | 9,812 | (11,659 | ) | |||
| Cash and cash-equivalents at start of the period | 48,067 | 70,033 | ||||
| Exchange rate effects | (2,861 | ) | (10,307 | ) | ||
| Cash and cash-equivalents at the end of the period | 55,018 |
48,067 |
||||
| Cash and cash-equivalents consists of: | ||||||
| Cash and cash-equivalents | 55,451 | 49,294 | ||||
| Overdrafts | (433 | ) | (1,227 | ) | ||
| 55,018 | 48,067 | |||||
|
1) June 2009 comparative numbers have been converted as a result of the change in presentation currency as outlined in Note 1. |
||||||
Announcement of Preliminary Results
Notes to the unaudited financial statements
1 Basis of preparation
The preliminary financial information set out in this announcement does not constitute statutory financial statements as defined by s435 of the Companies Act 2006 and are unaudited.The 2009 results are extracted from the audited accounts of Kofax plc, on which the auditors have issued an unqualified opinion which did not contain a statement under s498(2) or (3) Companies Act 2006.
The financial statements for the year ended 30 June 2010 have yet to be signed by the auditors.
The audited financial statements for the year ended 30 June 2009 have been delivered to the Registrar of Companies. The Annual Report for the year ended 30 June 2010 will be mailed to shareholders in October 2010 and will be delivered to the Registrar of Companies following the Annual General Meeting which will be held on 4 November 2010 at the offices of Dechert LLP located at 160 Queen Victoria Street, London, EC4V 4QQ. Copies will be available to the public from the Company’s registered office at 1 Cedarwood, Chineham Business Park, Basingstoke, Hampshire RG24 8WD, United Kingdom.
The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”). The accounting policies have been consistently applied to all periods presented.
Comparatives
The Group changed its presentation currency from Pound Sterling to US Dollars with effect from 1 July 2009 as a significant portion of the Group’s principal assets and operations are based in the US and a significant part of its operations are conducted in US Dollars. The change in presentation currency to US Dollars will more closely align the Group’s external financial reporting with the profile of the Group as well as with current internal management reporting. Comparative figures for 2009 have been represented in USDollars.
The change of the Group’s presentation currency has been accounted for in accordance with IAS 21, “The Effects of Changes in Foreign Exchange Rates”.
The Group expanded the presentation of the revenue, cost of sales and expense in the Consolidated Income Statement in order to improve transparency of the statement and comparability to companies within the industry. Comparative periods have been represented accordingly and in line with IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”. There is no impact on the opening balance at 1 July 2008 and therefore, no third balance sheet is presented.
The Parent changed its financial statements information accordingly to US Dollars which is different from its functional currency being Pound Sterling.
2 Earnings per share
Basic earnings per share of $0.093 (2009: $0.100) for the year to 30 June 2010 have been calculated based on the profit attributable to shareholders of $7,616,000 (2009: $8,244,000) using the weighted average number of ordinary shares in issue totalling 82.0m (2009: 82.4m) during the period.
Basic adjusted earnings per share of $0.208 (2009: $0.202) for the year to 30 June 2010 are based on profit of $17,035,000 (2009: $16,742,000), being adjusted for the expenses as stated below using the weighted average number of ordinary shares in issue totalling 82.0m (2009: 82.4m) during the period. The Board considers that basic adjusted EPS better reflects the underlying performance of the Group.
| Reconciliation of adjusted profit | Group | Group | Group | Group | ||||||||||
| 2010 | 2010 | 2009 | 2009 | |||||||||||
| EPS in $ | $ | '000 | EPS in $ | $ | '000 | |||||||||
|
Profit for the period attributable to the |
0.093 | 7,616 | 0.100 | 8,244 | ||||||||||
| Amortisation of acquired intangible assets | 0.056 | 4,628 | 0.053 | 4,408 | ||||||||||
| Restructuring costs | 0.031 | 2,538 | 0.066 | 5,455 | ||||||||||
| Share Based payment expense | 0.054 | 4,415 | 0.016 | 1,318 | ||||||||||
| Net Financial Income and Expense and Other | (0.015 | ) | (1,255 | ) | (0.007 | ) | (597 | ) | ||||||
| Tax effect of above | (0.011 | ) | (907 | ) | (0.025 | ) | (2,086 | ) | ||||||
|
Adjusted profit for the period attributable |
0.208 |
17,035 |
0.203 |
16,742 |
||||||||||
Diluted earnings per share of $0.090 (2009 $0.100) for the year to 30 June 2010 have been calculated based on the profit after tax attributable to equity holders of the parent of $7,616,000 (2009: $8,244,000) using 84.7m (2009: 82.8m) ordinary shares, the difference to the basic calculation representing the additional shares that would be issued on the conversion of all the dilutive potential ordinary shares.
Adjusted, diluted earnings per share of $0.201 (2009: $0.202) for the year to 30 June 2010 have been calculated based on profit of $17,035,000 (2009: $16,742,000), being adjusted for the operating expenses as stated above using 84.7m (2009: 82.8m) ordinary shares.
| Reconciliation of the denominator for EPS | Group | Group | |
| millions of shares | 2010 | 2009 | |
| Basic Weighted average number of ordinary shares (excluding ESOP and Treasury shares) | 82.0 | 82.4 | |
| Dilutive impact of share options | 1.6 | 0.4 | |
| Dilutive impact of LTIPs | 1.1 | - | |
| Diluted weighted average number of shares | 84.7 | 82.8 |
3 Reconciliation of movements in shareholders’ equity
| Year to | Year to | ||||||
| 30 June 2010 | 30 June 2009 | ||||||
| $’000 | $'000 | ||||||
| Opening Shareholders’ equity | 175,128 | 186,361 | |||||
| Change in accounting policy 170 Systems | (752 | ) | - | ||||
| Net profit for the period excluding minority interests | 7,616 | 8,244 | |||||
| Dividends | - | (2,004 | ) | ||||
| Exchange differences arising on retranslation of foreign operations | (9,173 | ) | (10,558 | ) | |||
| Actuarial losses on defined benefit pension plans | (676 | ) | (798 | ) | |||
| Net proceeds from issue of share capital | 1,670 | 1,247 | |||||
| Share-based payment expense | 4,415 | 787 | |||||
| Tax on items taken directly to equity | 1,082 | (201 | ) | ||||
| Treasury shares acquired | - | (8,102 | ) | ||||
| Change in ESOP shares | (40 | ) | 152 | ||||
| Shareholders’ equity at end of the year | 179,270 | 175,128 | |||||
4 Operating Segments
The two distinct operating and reportable segments are:
- Software Business: Capture and exchange software automates business processes and improves business performance by capturing and transforming documents into digital format and delivering them into business applications and archives.
- Hardware: The Group resells scanning and storage products to resellers. This business is only conducted in EMEA. The hardware segment includes revenue from the resale of hardware products and hardware related maintenance services.
The Group manages its two segments separately because their current or future sources of income derive from distinct markets and customers which require different manufacturing, distribution and marketing strategies.
The Group manages its business based on the key measures for resource allocation like revenue generation and adjusted operating profit. Gross Profit is not a key measure according to IFRS 8, but disclosed for additional information.
Segment assets consist only of inventories. Other balance sheet items do not meet the criteria, according to IFRS 8, for inclusion under one of the two reporting segments.
| $’000 | Software | Hardware | Total | |||
| Year to 30 June 2010 | ||||||
| Revenue external1) | 215,838 | 126,584 | 342,422 | |||
|
Segment revenue2) |
215,838 | 126,584 | 342,422 | |||
| Gross profit | 165,908 | 20,187 | 186,095 | |||
| Depreciation and amortisation | (5,407 | ) | (1,030 | ) | (6,437 | ) |
| Adjusted operating profit3) | 24,764 | 1,826 | 26,590 | |||
| Amortisation of acquired intangible assets | (4,628 | ) | ||||
| Restructuring costs | (2,538 | ) | ||||
| Share-based payment expense | (4,415 | ) | ||||
| Other income and expenses | 90 | |||||
| Share of results and disposal of associated undertakings |
(33 |
) |
||||
| Finance income | 1,997 | |||||
| Finance expense | (799 | ) | ||||
| Profit before tax | 16,264 | |||||
| $’000 | Software | Hardware | Total | |||
| Year to 30 June 2009 | ||||||
| Revenue external1) | 169,391 | 128,804 | 298,195 | |||
|
Segment revenue2) |
169,391 | 128,804 | 298,195 | |||
| Gross profit | 130,323 | 25,767 | 156,090 | |||
| Depreciation and amortisation | (3,435 | ) | (859 | ) | (4,294 | ) |
| Adjusted operating profit3) | 13,783 | 8,793 | 22,576 | |||
| Amortisation of acquired intangible assets | (4,408 | ) | ||||
| Restructuring costs | (5,455 | ) | ||||
| Share-based payment expense | (1,318 | ) | ||||
| Share of results of associated undertakings |
173 |
|||||
| Finance income | 1,432 | |||||
| Finance expense | (1,008 | ) | ||||
| Profit before tax | 11,992 | |||||
|
1) Please refer to the Consolidated Income Statement reflecting the revenue stream breakdown. |
||||||
|
2) There were no intersegment revenues in the current and prior year. |
||||||
|
3)Adjusted operating profit is stated before adding back amortisation of acquired intangibles, restructuring costs, the share- based payment expense and net financial income/expense and other income and expenses. It is used by the Group as a KPI to help in assessing the underlying trading. |
||||||
| $’000 | Software | Hardware | Total | |||
| 30 June 2010 | ||||||
| Inventories | 1,338 | 15,042 | 16,380 | |||
| All other assets as per balance sheet |
331,860 |
|||||
| Total assets | 348,240 | |||||
| $’000 | Software | Hardware | Total | |||
| 30 June 2009 | ||||||
| Inventories | 2,283 | 13,619 | 15,902 | |||
| All other assets as per balance sheet |
|
|
303,157 |
|||
| Total assets | 319,059 |
Entity-wide Disclosures
| $’000 | America | UK | Germany | Rest of EMEA | Asia-Pacific | Total | |||||
| Year to 30 June 2010 | |||||||||||
| Revenue external | 110,953 | 33,987 | 46,219 | 135,563 | 15,700 | 342,422 | |||||
| Non-current assets | 103,103 | 5,872 | 11,390 | 50,164 | 5,615 | 176,144 |
The revenue information is based on the location of the customer.
Non-current assets for this purpose consist of property, plant and equipment, investment in associates, other non-current assets and intangible assets.
| $’000 | America | UK | Germany | Rest of EMEA | Asia-Pacific | Total | |||||
| Year to 30 June 2009 | |||||||||||
| Revenue external | 77,955 | 28,155 | 45,703 | 135,232 | 11,150 | 298,195 | |||||
| Non-current assets | 64,630 | 1,055 | 13,418 | 62,356 | 5,819 | 147,278 |
5 Taxes
Tax charged to the income statement
| $’000 |
Group
2010 |
Group
2009 |
|||
| Current tax expense | |||||
| Income tax on profits for the year | 9,479 | 4,730 | |||
| Adjustment for over provision in prior periods | (130 | ) | 291 | ||
| Total | 9,349 | 5,021 | |||
| Deferred tax expense | |||||
| Origination and reversal of temporary differences | (42 | ) | (1,283 | ) | |
| Adjustment for under provision in prior periods | (659 | ) | 10 | ||
| Total | (701 | ) | |||