Sponsor, financial adviser, sole bookrunner and broker

202 Pages·2013·5.43 MB·English

Sponsor, financial adviser, sole bookrunner and broker
This document, which comprises a prospectus relating to ServelecGroup plc prepared in accordance with the Prospectus Rules LR 2.2.10(2)(a)
made under section 73A of FSMA, has been approved by theFCAand has been made available to the public in accordance with
paragraph 3.2 of the Prospectus Rules.
Applications have been made: (i) to the UK Listing Authority for all of the issued and to be issued Shares to be admitted to the premium listing LR 2.2.3
segment of the Official List and (ii) to the London Stock Exchange for such Shares to be admitted to trading on the London Stock Exchange’s LR 2.2.9(1)
main market for listed securities. Admission to trading on the London Stock Exchange’s main market for listed securities constitutes admission
PRAnn III, 4.1
to trading on a regulated market. No application has been, or is currently intended to be, made for the Shares to be admitted to listing or trading
on any other stock exchange. In theOffer, up to175,670New Shares are being offered by the Company for subscriptionunder the Employee PRAnn III, 6.1
Offer and the68,175,000Existing Shares are being offeredbyCSE Globalfor saleto certain institutionaland otherinvestors under the Institutional
PRAnn III, 5.2.4
Offer.It is expected that Admission will become effective, and thatdealings will commence in the Shares on the London Stock Exchange, at
8.00 a.m. on2December2013 (International Security Identification Number:GB00BFRBTP86).
The Company and its Directors (whose names appear on page31of this Prospectus) accept responsibility for the information contained in this PRAnn I, 1.1
Prospectus. To the best of the knowledge and belief of the Company and the Directors (each of whom hastaken all reasonable care to ensure PRAnn I, 1.2
that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the PRAnn III, 1.1
PRAnn III, 1.2
import of such information.
Prospective investors are advised to examine all the risks that might be relevant in connection with an investment in the Shares.
Prospective investors should read the entirety of this Prospectus, and in particular the section entitled Part1: “Risk Factors”, for
a discussion of certain risks and other factors that should be considered in connection with any investment in the Shares.
Prospective investors should be aware that an investment in the Company involves a degree of risk and that, if one or more of
the risks described in this Prospectus were to occur, investors may find that their investment is materially and adversely affected.
Accordingly, an investment in the Shares is only suitable for investors who are knowledgeable in investment matters and who
are able to bear the loss of the whole or part of their investment.
SERVELEC GROUP PLC
LR 2.2.1(1) and (2)
PRAnn I, 5.1.1
(Incorporated under the Companies Act 1985 and registered in England and Wales with registered number 03098411)
PRAnn I, 5.1.2
Prospectus
Institutional Offer of68,175,000Shares and Employee Offer of up to175,670Shares each PRAnn III, 5.1.2
PRAnn III, 5.3.1
at an Offer Price of179pence per Share
Admission of all such Shares to the premium listing segment of the Official List
and to trading on the London Stock Exchange
Sponsor, financial adviser, sole bookrunner and broker
Investec Bank plc
PRAnn III, 5.4.1
CSE Globalis offering68,175,000Existing Shares for sale under the Institutional Offer. The Company will not receive any of the proceeds of the
sale of the Existing Shares, all of which will be received byCSE Global(or as it directs). The Company is offering up to175,670New Shares
under the Employee Offer. The New Shares will, following Admission, rank pari passuin all respects with the Existing Shares and will carry the
right to receive all dividends and distributions declared, made or paid on or in respect of the issued Shares after Admission(other than the
Pre-Admission Dividend).
Expected issued share capital immediately following Admission
(assuming all of the New Shares are issued under the Employee Offer) PRAnnIII, 4.4
Number of Shares Aggregate nominal value of the Shares
68,350,670 £12,303,120.60
Investec has been appointed assponsor, financial adviser, sole bookrunnerand broker to the Company. Investec is authorised by the PRA and
regulated in the United Kingdom by the PRA and the FCA, and is acting exclusively for the Company and no one else in connection with the
Offer, and will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Offer and will not be
responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to the Offer
or any transaction or arrangement referred to in this Prospectus. Investec and its affiliates may have engaged in transactions with, and provided
various investment banking, financial advisory and other services for, the Company for which they would have received customary fees.
Unless required to do so by law or regulation, the Company does not envisage publishing any supplementary prospectus oran updatestatement,
as the case may be, until announcement of the final number of New Shares to be issued under the Employee Offer. A statement confirming the
number of New Shares that are the subject of the Employee Offer and containing any other outstanding information (the “Update Statement”)
is expected to be published on oraround26November2013.
Recipients of this Prospectus are authorised solely to use this Prospectus for the purpose of considering an acquisition or subscription of the
Shares, and may not reproduce or distribute this Prospectus, in whole or in part, and may not disclose any of the contents of this Prospectus
or use any information in it for any purpose other than considering an investment in the Shares. Such recipients of this Prospectus agree to the
foregoing by accepting delivery of this Prospectus.
This Prospectus does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to
purchase or subscribe for, any securities other than the securities to which it relates or any offer or invitation to sell or issue, or
any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances in which such offer
or solicitation is unlawful and, in particular, is not for distribution in Australia, Canada, Japan or the United States. The Shares
have not been, and will not be, registered under the Securities Act,or with anysecurities regulatory authority of any state or
jurisdictionof the United States or under applicable securities laws in Australia, Canada or Japan. The Shares offered by this
Prospectus may not be offered or solddirectly or indirectlyin the United States, or to, or for the account or benefit of any persons
within the United States,except under an exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act. Shares are being offered and sold outside the United States in transactions exempt from the registration
requirements of the Securities Actin reliance on Regulation S under the Securities Act.
The Shares offered by this Prospectus have not been approved or disapproved by the SEC, any State securities commission in
the United States or any other United States regulatory authority, nor have any such authorities passed upon, or endorsed the
merits of, the Offer or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in
the United States.
Apart from the responsibilities and liabilities, if any, that may be imposed on Investec byFSMA or the regulatory regime established under it, or
under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or
unenforceable, Investec accepts no responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents
of this Prospectus or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Shares
or the Offer and nothing in this Prospectus will be relied upon as a promise or representation in this respect, whether or not to the past or future.
Investec accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above),
which it might otherwise have in respect of this Prospectus or any such statement.
Prior to making any decision as to whether to invest in the Shares, prospective investors should read this Prospectus in its entirety. In making
an investment decision, each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Offer,
including the merits and risks involved. The investors also acknowledge that: (i) they have not relied on Investec or any person affiliated with
Investec in connection with any investigation of the accuracy of any information contained in this Prospectus or their investment decision; and
(ii) they have relied only on the information contained in this Prospectus.
No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given
or made, such information or representations must not be relied on as having been so authorised. Neither the delivery of this Prospectus nor
any subscription, sale or purchase made under it shall, under any circumstances, create any implication that there has been no change in the
business affairs of the Company or the Group since the date of this Prospectus or that the information in this Prospectus is correct as of any
time subsequent to its date.
None of the Company, Investec or any of their respective representatives is making any representation to any prospective investor in the Shares
regarding the legality of an investment in the Shares by such prospective investor under the laws applicable to such prospective investor. The
contents of this Prospectus should not be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its
own legal, financial or tax adviser for legal, financial or tax advice.
NOTICE TO CERTAIN INVESTORS
The Shares are subject to selling and transfer restrictions in certain jurisdictions. Prospective investors should read the restrictions described
under paragraph9of Part15: “Details of the Offer”. Each investor in the Shares will be deemed to have made the relevant representations
described inthatparagraph.
The distribution of this Prospectus and the offer of the Shares in certain jurisdictions may be restricted by law. Other than in the United Kingdom,
no action has been or will be taken by the Company,CSE Globalor Investec to permit a public offering of the Shares or to permit the possession
or distribution of this Prospectus (or any other offering or publicity materials or application forms relating to the Shares). In particular, no actions
have been taken to allow for a public offering of the Shares under the applicable securities laws of Australia, Canada, Japan or the United
States. Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction
except under circumstances that will result in compliance with all applicable laws and regulations. Persons into whose possession this Prospectus
comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation
of the securities laws of any such jurisdiction.
INTERPRETATION
Certain terms used in thisProspectus are defined in Part19: “Definitions” and certain technical and other items are defined and explained in
Part20: “Glossary”.
All references to time in thisProspectus are to London time, unless otherwise stated.
2
TABLE OF CONTENTS
Part Page
Summary information 4
Part1– Risk Factors 17
Part2– Presentation of Financial and Other Information 27
Part3– Directors, Secretary, Registered and Head Office and Advisers 31
Part4– Expected Timetable of Principal Events and Offer Statistics 32
Part5– Information on the Company and the Group 34
Part6– Acquisitions ofSemaphoreand Tynemarch 56
Part7– The Group’s Corporate Structure 59
Part8– Directors, Senior Management and Corporate Governance 61
Part9– Reasons for the Offer, Use of Proceeds, Dividends and Dividend Policy 66
Part10– Selected Financial Information 67
Part11– Operating and Financial Review 70
Part12– Capitalisation and Indebtedness Statement 97
Part13– Historical Financial Information 99
Part14– Unaudited Pro Forma Financial Information 140
Part15– Details of the Offer 144
Part16– Terms and Conditions of the Employee Offer 151
Part17– Taxation 158
Part18– Additional Information 161
Part19– Definitions 192
Part20– Glossary 197
3
SUMMARY INFORMATION
Prospectus summaries are made up of disclosure requirements known as “Elements”. These Elements are PRAnn XXII, 1
PRAnn XXII, 2
numbered in Sections A to E (A.1 to E.7). PRAnn XXII, 3
PRAnn XXII, 5
This summary contains all the Elements required to be included in a summary for this type of securities and
issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering
sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities PRAnn XXII, 4
and issuer, it is possible that no relevant information can be given regarding that Element. In this case, a
short description of the Element is included in the summary with the mention of “not applicable”underthe
heading“Disclosure requirement”.
Section A Introduction and warnings
Element Disclosure requirement
A.1 Warning PRAnn XXII, (I) A1
PRAnn XXII, (III) A1
This summary should be read as an introduction to this prospectus (this “Prospectus”).
Any decision to invest in ordinary shares in the Company (the “Shares”) should be based on
consideration of thisProspectus as a whole by the investor.
Where a claim relating to the information contained in thisProspectus is brought before a court,
the claimant investor might, under the national legislation of the Member States of the European
Economic Area, have to bear the costs of translating thisProspectus before legal proceedings
are initiated.
Civil liability attaches only to those persons who have tabled the summary, including any
translation of it, but only if the summary is misleading, inaccurate or inconsistent when read
together with the other parts of thisProspectus or it does not provide, when read together with
the other parts of this Prospectus, key information in order to aid investors when considering
whether to invest in the Shares.
A.2 Subsequent resale of securities or final placement of securities through financial PRAnn XXII, (I) A2
intermediaries
Not applicable. The Company is not engaging any financial intermediaries for any resale of
securities or final placement of securities after publication of this Prospectus.
Section B Issuer and any guarantor
Element Disclosure requirement
B.1 Legal and commercial name PRAnn XXII, (I) B1
Servelec Group plc (the “Company”).
B.2 Domicile, legal form, legislation and country of incorporation PRAnn XXII, (I) B2
The Company is incorporated in England and Wales as a public company limited by shares
and is domiciled in the United Kingdom. The Company operates under the Companies Act
2006.
B.3 Current operations and principal activities and markets PRAnn XXII, (I) B3
The origins of the Company’s and its subsidiaries’ (the “Group”) business were in the design
and manufacture of control systems for the Sheffield steel industry. Since then,the Grouphas
grown both organically and by acquisition and now operates two divisions: ServelecHealthcare
and ServelecAutomation(which itself operates ServelecControlsand ServelecTechnologies).
4
Servelec Healthcare specialises in the design, development and implementation of Electronic
Patient Record (“EPR”) software within secondary care settings and is a market leader in the
Mental Health and Community Health sectors inEngland.
Servelec Automation provides complex, mission-critical control systems to large, blue-chip
companies mainly in the UK oil & gas, water, power, utilities and broadcast sectors. Servelec
Automation provides services from consultancy, through to design, implementation, delivery,
installation and on-going customer support and maintenance.
B.4 (a) Significant recent trends PRAnn XXII, (I) B4
Servelec Healthcare
The National Programme for IT in England (“NPfIT”), which sought to make the NHSmore efficient
and improve the quality of information and patient care, ostensibly through the creation of an
electronicSummaryCareRecordforevery NHS patient in England which could be accessed by all
relevant care providers, is now in the process of being wound down. The UK Government has
demonstrateda commitment toconverged care,putting the patient at the centre of care delivery
irrespective of the care setting –whether Acute Health, Mental Health or Community Health. The
allocation of certain funding streams is also moving in line with a more holistic approach to care
and now incorporates social care. This is a reflection of a population that is living longer with
longer-term care needs that cross the traditional boundaries of health and social care.
Mental Health and Community Health in the London and Southern clusters
ServelecHealthcare’s existing customersin the London and Southern clusters(secured through
the BT Local Service Provider (“LSP”) contract which was awarded as part of the NPfIT) will
cease to be supported bythe end of October2015as the NPfIT is wound down. Thisimpending
situation led to a framework agreement for procurement being established in April 2013. This
framework (known as the ‘London Refresh’) gives the NHS trusts (“Trusts”) using RiO via the
BT LSP contractaroute to procurement and transition arrangements from an NPfIT delivery to
a direct relationship with their supplier. The framework includes three lots – Lot 1: application
provision, Lot 2: hosting and Lot 3: ancillary applications and services. Servelec Healthcare
successfully competed for inclusion in the London Refresh Lots 1, 2and 3. Ithas subsequently
been selected as preferred supplier for the deployment ofCommunityHealthEPRsoftware by
the first Trust to selectitspreferred supplier for this softwareunder Lot 1.
The market opportunity arising from the expiry of the BT LSP contract extends to 35 Trusts
which will transition out (approximately 30 of which are expected to use the framework
agreement) and the directors of the Company (the “Directors”) estimate that these Trusts, in
aggregate,present a market opportunity of approximately £50 million over a fiveyear period.
Community Health in the North East, the East & East Midlands and the North West & West
Midlandsclusters
The LSP contract for the North East, the East & East Midlands and the North West & West
Midlands clusters held by Computer Sciences Corporation (“CSC”) has an end date in 2016.
The Directors expect that the Trusts using CSC’s systems will start to prepare for transition in
2014on a similar framework to the London Refresh.TheCommunityHealth systems in these
clusters havebeen provided byThe Phoenix Partnership (Leeds) Limited (“TPP”), via its contract
with CSC, delivering its SystmOne solution. The Directors estimate that the 22 Community
Healthcare Providers in those clusters, in aggregate, present a market opportunity of
approximately £30millionover a five year period.
In addition, there are 12 Mental Health Trusts and six Community Health Providers that did not
receive a modern solution as part of the NPfIT which the Directors believe are likely to tender for
a modern solution and which the Directors estimate present an additional market opportunity
of, in aggregate, approximately £25 million over a five year period.
Acute Trusts
The NPfIT experienced a well-publicised lack of delivery of modern solutions to Acute Trusts.
The remaining LSP contracts expire in 2015 and 2016.The Directors believe that many Acute
Trustsare already starting to review options around direct supplyand the Directors expectthat
procurementofAcute Care systems willstart to acceleratein2014.
5
The Directorsestimatethat the market opportunityisapproximately 100 Acute Trustswhichdid
not receive a modern solution under the NPfITwithPatient Administration Systems (“PAS”) with
contract values estimated by the Directors to be worth approximately £2million per Trustover
a five year period and a full EPR contract are estimated by the Directors to be worth
approximately £10million per Trustover a five year period.
ServelecAutomation – ServelecControls
On-shore oil & gas, power and nuclear
The Directors believe that current market trends in the UK will move towards the construction
of new gas storage projects to provide greater resilience of national supply. Servelec Controls
will seek to takeadvantage of these trends by working with on-shore oil & gas companies.
In addition to theopportunities in the UK on-shore oil & gas sector, ServelecControls has moved
further into the UK power and nuclear markets. Current supply and demand pressures are
increasing the need to extend the operational life of existing coal fired and nuclear power plants
at a time when these plants are operating within a more regulated environment. The desire of
plant operators to extend the operational life of their plants is providing further brownfield
refurbishment opportunities for ServelecControls to replace and enhance ageingtechnology in
the power and nuclear sectors.
The Directors believe that Servelec Controls is well placed to take advantage of these
opportunities in the UKcontrol systems’market.
Off-shore oil & gas
ServelecControls also operates in the larger UK off-shore oil & gas market which the Directors
believe offers significant growth opportunities for Servelec Controls. These opportunities are
being driven by the desire of off-shore oil & gas rig operators to extend the working life of their
off-shore assets and infrastructure.
Off-shore oil & gas rig operators are finding thatnewdrilling technologies are allowing them to access
larger quantities of economically exploitable reservesof oil & gas. The Directors believe that these
operators are planning to use existing, but often refurbished, infrastructure to exploit these new
reserves as the cost of new infrastructure far outweighs the cost of refurbishment. Many oil&gas
platforms were deployed in the 1970s and are coming towards the end of their originally anticipated
operational life. Furthermore, the cost of decommissioning these platforms is very significant and
operators arenow more willing to extend the life of older assets. In addition, the UK Government’s
energy security policy, which has introduced tax incentives for platform operators who extend the
life of existing assets, is further incentivising operators to refurbish platforms.
In general, there are two main options available to operators to extend the usefullife of a platform:
l full refurbishment of the platform including all infrastructure and refurbished controls
systems; or
l de-manning and remote automation (which is typically often driven by the requirement to
remove top-side weight fromthe platform)to reduce weight on the platform and therefore
help to increase the useful life of the platform. This reduces the costs associated with
having a rig-based workforce,for example helicopter transportation costs.
The Directors believe that both of these options should provide opportunities for ServelecControls
as the refurbishment of the controls systemswill allow ServelecControls the opportunity to supply
its production control systems, emergency shutdown systems, fire & gas detection systemsand
real-time information systems. The Directors further believe that the on-going cost savings for a
rigoperator can be improved by instigating a de-manning and remote automation solution which,
although requiring a higher initial investment for top-side weight removal, will have a potentially
greater long-term benefitin cost savings,safetyand in extending the useful life of the platform.
A leading research and energy consultancy has recently forecast that over the next five years
more than£44 billion will be spent on new projects and extending the life of assets in the North
6
Sea. The industry trade body Oil & Gas UK has also predicted record investment in new and
existing assets in the North Sea, asoutlined in its February 2013 report.
The Directors believe that there are over300ageing platforms in the North Sea where field life
needs to be extended and refurbishment is required and that this represents a potential
£450million opportunityover the next10yearsfor ServelecControls.
ServelecAutomation – ServelecTechnologies
Water
The water sector has in recent years accounted for approximately 65 per cent. of Servelec
Technologies’ revenue. The Directors believe that a key driver for water companies making
further use of ServelecTechnologies’ products and services is the desire for improved efficiency
within their businesses, necessitating improved and enhanced data collection and reporting,
which isin line withOfwat’sregulatoryobjectives.
Of Ofwat’s objectives, the most relevant to ServelecTechnologies are:improved water quality,
reduced leakage of clean water and seepage of waste water; and improved customer
satisfaction in terms of the availability of water. The Directors believe that in order to satisfy these
objectives, water companies will need to invest in increased measurement, data collection, data
analytics and reporting systems. In addition, legislation is also requiring water companies to take
ownership of water assets, which have historically been owned by other organisations, such as
factories, housing associations and house builders. The Directors estimate that there are
approximately 25,000 sites which are required to be adopted and Servelec Technologies has
developed a new remote telemetry unit to take advantage of this opportunity.
The Directors believe that the water companies’ desire for improved efficiency, coupled with the
water industry’s regulatory regime, will drive an increased demand for Servelec Technologies’
products and services. Since the acquisition of Tynemarch Holdings Limited (now known as
CSE-Tynemarch Holdings Limited) in Februarythis year, ServelecTechnologies has been able to
provide an enhanced product suite to water companies comprising a full ‘end-to-end service’
covering data collection, data management and business optimisation.The Directors believe that
there are currently approximately 50,000 remote telemetry units of which approximately 7 to
10 per cent. will need refreshing annually to implement the water companies’ drive to improve
the efficiency of their networks.
Due toa reduced level of investmentin water infrastructure over the past five yearsduring AMP5,
the Directors believe thereare furtheropportunitiesfor ServelecTechnologies in the replacement
of ageing remote telemetry unitsover and above the usual replacement cycle, which is typically
10to 15years,in addition to helping water companiesoptimise maintenance schedules and invest
in their infrastructure, through ServelecTechnologies’ PIONEERsoftware product.
Other industries
Both SCOPE-X and Seprol RTUshave applications in, and are used across, a number of other
industry verticals. Servelec Technologies has seen an increased demand for its products and
servicesin the broadcast and power monitoringsectors as thetrack record of its products for
resilience and availabilityhas been demonstrated over time, particularly in the water industry.
B.5 Group description PRAnn XXII, (I) B5
As at the date of this Prospectus, the Company is currently a wholly-owned subsidiary of CSE
Global Limited (“CSE Global”), a company whose shares are traded on the main board of the
Singapore Stock Exchange. The significant subsidiaries of the Company are CSE-Healthcare
Systems Limited, CSE-Servelec Limited, CSE-Tynemarch Systems Limited and CSE-Controls
Limited as well as CSE-Semaphore Belgium SA and CSE-Semaphore Australia Pty Limited
(which joined the Groupon18October 2013).Immediately following Admission, the Company
will be the parent company of the Group.
Each of the Company’s subsidiariesis, directly or indirectly, wholly owned by the Company.
7
B.6 Major Shareholders PRAnn XXII, (I) B6
As at the date of this Prospectus,CSE Globalowns 100 per cent. of the issued ordinary share
capital of the Company. Immediately following Admission, CSE Globalwill not hold anyshares
in the capital of the Company.
B.7 Selected historical key financial information PRAnn XXII, (I) B7
The tables below, which have been extracted without material adjustment from Part 13:
“Historical Financial Information”, set out summary financial information of the Group for the
years ended 31 December 2010, 2011 and 2012 and the six months ended 30 June 2012
(unaudited) and 30 June 2013:
Group Income Statement
–––––––Y–ea–r–s –e–nd–e–d– 3–1– D–e–c–e–m–b–e–r–––––– ––S–ix– m–o–n–th–s– e–n–d–ed––3–0 –J–un–e––
2010 2011 2012 2012 (unaudited) 2013
£’000 £’000 £’000 £’000 £’000
Revenue 41,003 42,545 39,361 18,690 19,344
Cost of sales (23,336) (25,386) (22,400) (10,999) (11,807)
––––––– ––––––– ––––––– ––––––– –––––––
Gross profit 17,667 17,159 16,961 7,691 7,537
Selling and distributionexpenses (822) (1,004) (1,192) (565) (726)
Administration and otherexpenses (6,708) (6,603) (4,932) (2,316) (2,481)
––––––– ––––––– ––––––– ––––––– –––––––
Operating profit fromcontinuing operations 10,137 9,552 10,837 4,810 4,330
Finance costs (280) (2) – – –
Finance Income 21 35 48 25 39
––––––– ––––––– ––––––– ––––––– –––––––
Profit before taxation from
continuing operations 9,878 9,585 10,885 4,835 4,369
Income tax expense (2,722) (2,308) (2,436) (1,207) (994)
––––––– ––––––– ––––––– ––––––– –––––––
Profit/(loss) for the financialperiod
from continuingoperations 7,156 7,277 8,449 3,628 3,375
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Discontinued operations
Profit/(loss) after tax for theperiod from
discontinuedoperations 65 (65) 7 (4) 103
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Profit for the financial period 7,221 7,212 8,456 3,624 3,478
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Other comprehensive incometo be
reclassified through theIncome Statement
Exchange differences on
translation of foreign operations (46) (21) (21) 2 47
––––––– ––––––– ––––––– ––––––– –––––––
Total comprehensive incomefor the
financial period, netof tax 7,175 7,191 8,435 3,626 3,525
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Group Statement of Financial Position
31 December 30 June
–––––––––––––––––––––––––––––– ––––––––––––––––––––––––––
2010 2011 2012 2012(unaudited) 2013
£'000 £'000 £'000 £'000 £’000
ASSETS
Non-current assets
Property, plant and equipment 1,175 1,102 1,188 1,168 1,148
Intangible assets 12,955 12,874 12,829 12,794 14,369
Deferred tax asset 30 111 221 153 302
––––––– ––––––– ––––––– ––––––– –––––––
Total non-current assets 14,160 14,087 14,238 14,115 15,819
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Current assets
Inventories 128 91 86 91 134
Trade and other receivables 19,100 17,759 20,240 22,411 20,825
Interest bearing loan – 1,500 – – –
Cash and cash equivalents 4,992 3,570 8,549 3,940 4,870
––––––– ––––––– ––––––– ––––––– –––––––
Total current assets 24,220 22,920 28,875 26,442 25,829
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Assets classified as held for sale – – – – 1,434
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
TOTAL ASSETS 38,380 37,007 43,113 40,557 43,082
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
EQUITY AND LIABILITIES
Share capital 4,578 4,578 4,578 4,578 4,578
Share premium 501 501 501 501 501
Currency translation reserve (46) (67) (88) (65) (41)
Retained earnings 17,281 22,993 29,449 24,617 27,927
––––––– ––––––– ––––––– ––––––– –––––––
Total equity shareholders funds 22,314 28,005 34,440 29,631 32,965
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
TOTAL EQUITY
Non-current liabilities
Deferred tax liabilities 488 410 341 375 481
––––––– ––––––– ––––––– ––––––– –––––––
Total non-current liabilities 488 410 341 375 481
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Current liabilities
Trade and other payables 13,730 7,565 7,237 9,274 8,093
Current corporation tax 1,848 1,027 1,095 1,277 1,197
––––––– ––––––– ––––––– ––––––– –––––––
Total current liabilities 15,578 8,592 8,332 10,551 9,290
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
Liabilities directly associatedwith the
assets classified asheld for sale – – – – 346
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
TOTAL LIABILITIES 16,066 9,002 8,673 10,926 10,117
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
TOTAL EQUITY ANDLIABILITIES 38,380 37,007 43,113 40,557 43,082
–––––––––––––– –––––––––––––– –––––––––––––– –––––––––––––– ––––––––––––––
8
Cash Flow Statement
–––––––Y–ea–r–s –e–nd–e–d– 3–1– D–e–c–e–m–b–e–r–––––– ––S–ix– m–o–n–th–s– e–n–d–ed– –3–0 –J–un–e––
2010 2011 2012 2012 (unaudited) 2013
£’000 £’000 £’000 £’000 £’000
Profit/(loss) before tax
Continuing operations 9,878 9,585 10,885 4,835 4,369
Discontinued operations 91 (76) 7 (6) 134
Operating activities
Profit/(loss) before tax 9,969 9,509 10,892 4,829 4,503
Adjustments to reconcile profit before tax to
net cash flows:
Depreciation and impairment of property, plant
and equipment 216 185 181 81 134
Amortisation and impairment of intangible assets 725 152 163 80 151
Gain/(loss) on disposal of property, plant
and equipment 4 13 8 – –
Finance income (21) (35) (48) (25) (39)
Finance costs 280 2 – – –
Working capital adjustments
(Increase) / decrease in trade and otherreceivables
and prepayments 3,571 1,341 (2,481) (4,652) (719)
(Increase) / decrease in inventories 59 37 5 – (50)
Increase / (decrease) in trade and other payables (241) (6,165) (328) 1,709 107
––––––– ––––––– ––––––– ––––––– –––––––
Cash flows from operating activities 14,562 5,039 8,392 2,022 4,087
Interest received 21 35 48 25 39
Interest paid (280) (2) – – –
Income tax paid (1,933) (3,269) (2,547) (1,033) (1,004)
––––––– ––––––– ––––––– ––––––– –––––––
Net cash flows from operating activities 12,370 1,803 5,893 1,014 3,122
––––––– ––––––– ––––––– ––––––– –––––––
Investing activities
Purchase of property, plant and equipment (226) (199) (384) (147) (116)
Acquisition of subsidiary
undertaking net of cash acquired (8,618) – – – (1,380)
––––––– ––––––– ––––––– ––––––– –––––––
Net cash flows from investing activities (8,844) (199) (384) (147) (1,496)
––––––– ––––––– ––––––– ––––––– –––––––
Financing activities
Repayment of borrowings – (1,500) 1,500 1,500 –
Dividends paid (3,650) (1,500) (2,000) (2,000) (5,000)
––––––– ––––––– ––––––– ––––––– –––––––
Net cash flows from financing activities (3,650) (3,000) (500) (500) (5,000)
––––––– ––––––– ––––––– ––––––– –––––––
Net increase in cash and cash equivalents (124) (1,396) 5,009 367 (3,374)
––––––– ––––––– ––––––– ––––––– –––––––
Net foreign exchange difference (64) (26) (30) 3 44
Cash held in discontinued operations – – – – (349)
––––––– ––––––– ––––––– ––––––– –––––––
Cash and cash equivalents at start of period 5,180 4,992 3,570 3,570 8,549
––––––– ––––––– ––––––– ––––––– –––––––
Cash and cash equivalents at end of period 4,992 3,570 8,549 3,940 4,870
––––––– ––––––– ––––––– ––––––– –––––––
Since 30 June 2013: (i) a dividend of€840,000was received by the Company from CSE-Controls,
s.r.o.; (ii) the Group acquired from CSE Global (a) the Semaphore Group (being Servelec
Technologies Limited, CSE-Semaphore Belgium SA, CSE-Semaphore Australia Pty Limited and
CSE Semaphore Inc.) in consideration for the issue of 7,093,000 ordinary shares of £1 each in
the capital of the Company to CSE Globaland (b)certain intellectual property rights in relation to
the Semaphore Group's Kingfisher products in consideration for the issue of 600,000 ordinary
shares of £1each in the capital of the Company to CSE Global; (iii) the Group acquired from CSE
Global, conditional on Admission, certain intellectual property rights in relation to the RiO and
Oceano software in consideration for the payment by the Company to CSE Globalof £815,000;
and (iv)the Company has declared, conditional on Admission, a dividend of £1,500,000to CSE
Global, payable on the date of Admission(the “Pre-Admission Dividend”).
Save as described in the paragraph immediately above, there has been no significant change
in the financial or trading position of the Groupsince 30 June 2013, being the date to which the
latest audited interim financial information for the Group in Part 13: “Historical Financial
Information” was prepared.
9