Interim Results
(RNS) 23 November 2009
Interim Results for the six months ended 30 September 2009
- Clarity Commerce Solutions plc
("Clarity", the "Company", or the "Group")
Clarity Commerce Solutions plc (AIM:CCS), a leading specialist in the delivery of mission critical transaction processing solutions for the Ticketing, Hospitality, Retail and Leisure sectors, is pleased to announce its interim results for the six months ended 30 September 2009.
Financial highlights
- Steady progress achieved during the period despite a challenging business environment
- Revenue for the period up 10% to £8.8m (2008: £8.0m) with profit before tax* doubling to £603,000 (2008: £300,000)
- Strong balance sheet underpinned by ongoing cost efficiencies & restructuring benefits
- Recent successful placing facilitates part settlement of MATRA earn-out and further strengthens balance sheet
- Well positioned for full year performance, which is traditionally second-half weighted
Operational highlights
- Strong performance across Retail Division both in Europe and the US with major new contract wins with Associated Food Stores, Coop Denmark and London Drugs amongst others
- Leisure Division continues to make good progress, both in supporting and enhancing existing customer systems
- Entertainment Division continues to build its customer base with another 120 automated ticketing machines (ATMs) and several further site openings across France and UK
- Hospitality Division achieves smooth roll out of 43 sites for Oxford Hotels and Inns - coupled with 17 new hotel and spa sites added as new customers
- Forward pipeline is robust with several significant pilots running
Strategy highlights
- Business refocused on business development and delivery - significant commercial success as demonstrated via significant contract wins
- Ongoing streamlining and operational efficiencies make Group exceptionally agile & competitive
- Brand and products have been re-defined under the banner of "ClarityLive" offering customers and prospects an integrated, cross-sector set of modules to provide a flexible but comprehensive solution
* before amortisation
Ken Smith, Clarity CEO commented:
“Although trading conditions, sector wide, continue to be challenging, the Group has adapted, restructured and refocused in order to secure its success over the long term. We have achieved a tremendous amount over the last two years and have revitalised the business both in terms of its profile and capabilities. As a result, we remain cautiously optimistic for the period ahead.”
Enquiries:
| Clarity Commerce Solutions plc | Ken Smith, CEO Chris Ford, CFO |
01256 365 150 |
| Arbuthnot Securities | Alasdair Younie/Ben Wells | 020 7012 2000 |
| Biddicks | Shane Dolan | 020 7448 1000 |
Chairman's statement
Overview
In this, my first statement as Chairman, I am delighted to report a further good set of results for the Clarity Group, for the six months to 30 September 2009.
Despite the difficult economic climate, both revenues and profit before tax each showed a marked improvement against the comparative period for 2008, whilst cash flow was maintained such that, once again, a positive net funds position was achieved.
These results reflect the efforts of a strong management team, under the leadership of Ken Smith, the Chief Executive. We believe that the Group is well placed to build its market position further over the coming months.
Financial highlights
Revenue increased from £8.0m to £8.8m, an increase of 10%, whilst profit before tax and amortisation doubled to £603,000. These results stand us in good stead for our full year performance, which is traditionally second-half weighted.
In conjunction with the strong profit performance, our cash has again been carefully managed. At 30 September 2009 the Group remained in a net surplus position, and following the half year this has been further improved by the receipt of funds in connection with our recent placing, which saw a number of prestigious investment institutions join our shareholder base.
Our first half financial results are summarised as follows:
| Six months ended 30/09/09 £'000 | Six months ended 30/09/08 £'000 | |
|---|---|---|
| Revenue | 8,842 | 8,051 |
| Gross profit | 7,052 | 6,586 |
| Operating costs | (6,423) | (6,167) |
| Operating profit before amortisation | 629 | 419 |
| Interest | (26) | (119) |
| Profit before tax and amortisation | 603 | 300 |
| Net cash/(debt) before deferred earnout | 384 | (1,177) |
In a difficult trading climate the increase in revenues was most satisfying; although their mix meant that the gross profit margin was a little lower than normal. A number of sales contracts involved the sale, inter alia, of hardware components where our margin is much lower, and hence the overall margin, in percentage terms, was slightly lower than planned. Offsetting this, however, was a sterling effort in cost containment, which gave rise to an improvement in operating profits.
Furthermore, strong cash management, and the general easing in borrowing rates, reduced our interest charges to a nominal level for the period, with a resultant doubling of profits before tax and amortisation.
On 16 October 2009, the Company raised approximately £2.7m through the issue of 6,812,500 new ordinary shares at a price of 40p per share to certain new and existing institutional and individual investors, including £100,000 from Directors. Approximately £1.5m of the funds raised was used to settle part of the deferred earn out due to the vendors of MATRA Systems Holdings Ltd, and the remainder, net of costs, has been retained in the business to strengthen the balance sheet.
Board Changes
In April 2009, we were delighted to welcome Chris Ford as our Chief Financial Officer, initially on a part time basis. Having moved to a full time role from August, Chris has already stamped his mark on our Group and introduced a number of positive changes.
In August 2009 John O'Hara who, for over two years, had proved an outstanding non-executive Chairman, initially under difficult circumstances, stepped down from the Board. While John made frequent visits to the UK, living in New Zealand was far from optimal, either for him or the Company. Although his was a difficult act to follow, I was pleased to be offered the Clarity Chairmanship and relish the opportunity to further advance the excellent progress made over the past two years.
Operating Review
During the last year, Clarity implemented a timely cost-reduction programme which left the business in good shape to cope with what was to be a very difficult time for the technology sector. Despite the market difficulties our divisions have responded well.
Our Retail business, in Europe and in the US, has seen a further strong surge in business. The US market saw the smooth roll out of initial sites for the largest operator of membership warehouse clubs in Central America and the Caribbean, with the remainder due to go live over the coming months. This challenging contract, involving multiple countries, currencies and languages, posed many problems within a tight timescale, but we worked closely with our customer to ensure a smooth, successful result, which has already led to further business.
Elsewhere in the US, our Universal Studios footprint has been extended with the roll out of our point of sale solution to their Jimmy Buffett's Margaritaville site. Our IBM 4690 business in Raleigh continues to perform extremely well, with recent new business from a major US grocery chain, which we cannot name for commercial reasons, further business from a major US bedding and specialty store, as well as several other prestigious customers.
In Europe, in addition to a substantial amount of ongoing upgrade and enhancement work for customers such as Schuitema and Flytoget, the Company has recently secured a key order from Coop Denmark for a webstore application which, inter alia, adds a new dimension to the core product set by offering a seamless multiple channel integration solution.
Our major project with Dienst Binnenwaterbeheer Amsterdam, the operator of Amsterdam Harbour, is all but complete and is scheduled to go live later this month.
Our Leisure business continues to make good progress, both in supporting and enhancing existing customer systems, and paving the way for future growth. A recent initiative, involving Aspire Sports & Cultural Trust, provides a cost-efficient, convenient means for members of the public to enrol in the Government's "Swim for Life" programme. This initiative, involving Clarity's on-line e-joining solution, has yielded outstanding participation rates and, to date, over 9,000 people have enrolled using our software, representing over 37% of nationwide enrolments to date. With a phased product launch planned over the coming months, further Leisure news will follow in due course.
Clarity's Entertainment business, in the UK and France, continues to build on its solid customer base, with innovative new technologies and features. Another 120 automated ticketing machines (ATMs) and several further site openings have been rolled out to EuroPalaces and other customers in France and England.
The Resorts and Hotels business, part of our Hospitality unit, has had an excellent first half, achieving its budgeted revenues. The roll out of 43 sites for Oxford Hotels and Inns went off smoothly, and a healthy number of new hotel and spa sites were added to our expanding list of hotel customers.
The remaining Hospitality business performed satisfactorily, with further business from existing customers, and an exciting new prospect, details of which remain confidential at this stage for commercial reasons.
Structural changes
Last year we refocused the Company on business development and business delivery. This efficient operation afforded roll outs to customers such as the initial sites in the US mentioned above, and Oxford Hotels and Inns in the UK which, otherwise, would most probably have been fragmented.
During this period, we have re-defined our brand, and shaped the future direction of our product set, under the banner of "ClarityLive". The ClarityLive suite offers customers and prospects an integrated, cross-sector set of modules, thereby providing solutions from the simplest hospitality or retail requirement right through to comprehensive, integrated global multi-sector organisations. Few, if any, companies can offer such a comprehensive solution, coupled with unsurpassed post-sale service and support.
In order to fully retain its cutting edge in its chosen sectors the Group will continue to streamline its operations to ensure it can retain its chosen position, being more agile and innovative that the lumbering industry giants, yet more robust and credible than smaller competitors. This strategy has yielded good results over the past two years and provides a good platform for continued growth.
The Resorts and Hotels business has seen a transformation in its business model, with a new management structure, complemented by additional sales and operations staff providing vigour and drive in its markets. Recent contract activity underpins this strategy, and the pipeline is strong.
The US, too, has seen change in its organisation which needed to adapt to an increasingly-demanding market place. Amusement park customers and retailers alike demand ever-improving products and services and our organisation has been streamlined to achieve this as part of an ongoing programme.
Research and Development
At the heart of our product development programme is the convergence of the best elements of our product portfolio into the new ClarityLive architecture. This makes our extensive range of functionality, from loyalty, promotions and membership through to bookings and event management available to every market that we sell to and gives us excellent opportunities to deliver more to existing customers and to capture additional market share.
In the Retail world this functionality needs to be made available seamlessly across the different channels, both in store (eg mobile Point of Sale, self checkout, kiosks and the like) and out of store (eg eCommerce, call centres etc). The ClarityLive Retail suite is being extended to increase our capability in this area - particularly in the eCommerce and mobile phone arena which are growing in importance.
In the Leisure industry, Clarity's product suite offers comprehensive solutions for local authority and commercial sports venues. With a strong market position, Clarity's challenge has been to upgrade its LeisureFlex product to cater for a changed environment. The ClarityLive Leisure suite is currently at an advanced stage in its redevelopment into a state of the art solution which, we believe, will leapfrog the competition. Whilst retaining the rich features of the legacy solution which remains in use by many local authorities, the ClarityLive Leisure suite offers new features including a flexible architecture, an exciting, customer-specific user interface and advanced capability in areas such as loyalty, CRM, cashless solutions and membership. Our strategy of implementing the new solution module by module has proved very successful, allowing us to migrate our customers in a low risk manner whilst delivering real value to them from day one although a number of clients have already ordered the full upgrade.
In our Entertainment business we have spent much of this year upgrading and extending our legacy TIMS product, again using state of the art technology. The new ClarityLive Entertainment suite retains the functionality and speed of the legacy solution whilst offering existing customers greatly enhanced flexibility and features. This gives us an excellent platform from which to launch into new prospects both in existing territories and new ones. Recent technical enhancements include an exciting new cinema messaging and signage solution for use in the cinema foyer, the launch of multi-site ATMs, a central management and authorisation centre designed to handle CRM and customer loyalty applications across the estate and a performance scheduling module, all using leading edge architecture and user interface technology.
Our Hotels and Resorts business has similarly been working hard on technical innovation. Increasingly hotels rely on internet bookings to fill their available room portfolio and the ClarityLive Hospitality suite has been enhanced to offer a fully integrated Channel Management solution. The Golf and Spa functionality is undergoing a major upgrade too, intended to retain Clarity's position as the leading Golf and Spa solution provider. The first module to be launched is our online Spa bookings module which we believe to be the first such product available in the UK.
Contract wins
In common with most other vendors of technology solutions, we have experienced a general slow-down in the sales cycle. The majority of customers and prospects are rightly deliberating more carefully on capital projects, and competition is, in many cases, striving to compete by cutting their margins. Nevertheless, despite these pressures, we have continued to deliver a growing, increasingly-profitable result and our pipeline remains strong, if slow to convert.
During the six months to 30 September 2009, most of our new contracts have come from existing customers, although recent monthly activity has seen some acceleration in prospecting activity. Currently we have pilots in several exciting, potentially very large prospects and bid activity remains very high. Recent notable contracts have been received from the following:
- Schuitema - Clarity software enhancements
- Coop Denmark - new Webstore solution
- Flytoget - PCI solution
- EuroPalaces - ATMs and additional site openings
- Associated Food Stores - software licences and support
- Major US grocery chain - IBM 4690 enhancements and support
- London Drugs - implementation of Euro/Mastercard/Visa solution
- Major US amusement park operator - POS enhancements
Outlook
We remain in challenging times but Clarity has again demonstrated its adaptability and commitment to achieve its goals. Customers and prospects rightly continue to tread carefully before committing to capital projects and we aim to work in partnership with them, being ready to move quickly and efficiently when they choose to drive ahead.
In these circumstances we remain cautiously optimistic, believing that we have the right product set, people and prospects to grow the Clarity Group. It has been my pleasure to oversee an exceptional set of people deliver these results and, as a Board, we believe that this trend will continue.
Sir Colin Chandler
Group Chairman
23 November 2009
Condensed Consolidated Income Statement for the six months ended 30 September 2009
| Notes | Six months ended 30/09/09 Unaudited £'000 | Six months ended 30/09/08 Unaudited £'000 | Twelve months ended 31/03/09 Audited £'000 | |
|---|---|---|---|---|
| Continuing operations: | ||||
| Revenue | 6 | 8,842 | 8,051 | 17,683 |
| Cost of sales | (1,790) | (1,465) | (3,136) | |
| Gross profit | 7,052 | 6,586 | 14,547 | |
| Operating costs: | ||||
| Operating expenses | (6,423) | (6,167) | (13,249) | |
| Amortisation and impairment of acquired intangible assets | (203) | (325) | (646) | |
| Total operating costs | (6,626) | (6,492) | (13,895) | |
| Operating profit from continuing operations | 426 | 94 | 652 | |
| Operating profit from continuing operations is analysed between: | ||||
| Operating profit from continuing operations | 629 | 419 | 1,298 | |
| Amortisation of acquired intangible assets | (203) | (325) | (646) | |
| 426 | 94 | 652 | ||
| Finance income | 49 | 377 | 617 | |
| Finance costs | (75) | (496) | (804) | |
| Profit/(loss) before taxation from continuing operations | 400 | (25) | 465 | |
| Taxation credit/(expense) | (59) | (64) | 6 | |
| Profit/(loss) for the year from continuing operations | 341 | (89) | 471 | |
| Loss for the period from discontinued operations | 7 | - | (94) | (586) |
| Profit on disposal of discontinued operations | 8 | - | 269 | 333 |
| Profit for the year attributable to the equity shareholders of the parent company | 341 | 86 | 218 | |
| Earnings/(loss) per share: | 5 | |||
| Basic and diluted - continuing operations | 1.06p | (0.28)p | 1.47p | |
| Basic and diluted - discontinued operations | - | 0.55p | (0.79)p | |
| 1.06p | 0.27p | 0.68p |
| Notes | Six months ended 30/09/09 Unaudited £'000 | Six months ended 30/09/08 Unaudited £'000 | Twelve months ended 31/03/09 Audited £'000 | |
|---|---|---|---|---|
| Profit/(loss) for the period from continuing operations | 341 | (89) | 471 | |
| Loss for the period from discontinued operations | - | (94) | (586) | |
| Profit for the period from the sale of discontinued operations | - | 269 | 333 | |
| Other comprehensive income: | ||||
| Exchange differences on translation of foreign operations recognised directly in equity | (77) | (163) | (39) | |
| Total comprehensive income for the period attributable to the equity shareholders of the parent company | 264 | (77) | 179 |
Condensed Consolidated Balance Sheet as at 30 September 2009
| Notes | As at 30/09/09 Unaudited £'000 | As at 30/09/08 Unaudited £'000 | As at 31/03/09 Audited £'000 | |
|---|---|---|---|---|
| Assets: | ||||
| Non current assets: | ||||
| Property, plant and equipment | 236 | 341 | 248 | |
| Goodwill | 8,890 | 8,826 | 8,890 | |
| Other intangible assets | 609 | 1,133 | 812 | |
| Total non current assets | 9,735 | 10,300 | 9,950 | |
| Current assets: | ||||
| Inventories | 78 | 408 | 260 | |
| Trade and other receivables | 4,330 | 5,052 | 4,370 | |
| Cash and cash equivalents | 1,669 | - | 1,951 | |
| Total current assets | 6,077 | 5,460 | 6,581 | |
| Total assets | 15,812 | 15,760 | 16,531 | |
| Liabilities: | ||||
| Non current liabilities: | ||||
| Bank loans | 885 | 305 | 1,085 | |
| Deferred consideration | 2,936 | 3,586 | 3,136 | |
| Obligations under finance leases | 10 | 40 | 14 | |
| Total non current liabilities | 3,831 | 3,931 | 4,235 | |
| Current liabilities: | ||||
| Trade payables | 1,426 | 1,461 | 2,264 | |
| Other payables | 2,740 | 2,891 | 2,797 | |
| Income tax | 470 | 412 | 184 | |
| Bank loans and overdrafts | 400 | 872 | 400 | |
| Loan notes | 129 | - | 129 | |
| Obligations under finance leases | 8 | 25 | 8 | |
| Deferred consideration | 600 | 480 | 570 | |
| Total current liabilities | 5,773 | 6,141 | 6,352 | |
| Total liabilities | 9,604 | 10,072 | 10,587 | |
| Net assets | 6,208 | 5,688 | 5,944 | |
| Equity: | ||||
| Shareholders' equity: | ||||
| Share capital | 8,007 | 8,007 | 8,007 | |
| Share premium | 7,576 | 7,576 | 7,576 | |
| Retained earnings | (10,698) | (11,171) | (11,039) | |
| Translation reserve | (373) | (420) | (296) | |
| Other reserve | 1,696 | 1,696 | 1,696 | |
| Total equity attributable to the equity shareholders of the parent company | 6,208 | 5,688 | 5,944 |
Condensed Consolidated Statement of Changes in Equity as at 30 September 2009
| Share Capital £'000 | Share Premium Account £'000 | Retained Earnings £'000 | Other Reserve £'000 | Translation Reserve £'000 | Total £'000 | |
|---|---|---|---|---|---|---|
| At 31 March 2008 and 1 April 2008 | 8.007 | 7,576 | (11,257) | 1,696 | (257) | 5,765 |
| Consolidated profit for the period | - | - | 86 | - | - | 86 |
| Exchange differences on translation of foreign operations | - | - | - | - | (163) | (163) |
| At 30 September 2008 and 1 October 2008 | 8,007 | 7,576 | (11,171) | 1,696 | (420) | 5,688 |
| Consolidated profit for the period | - | - | 132 | - | - | 132 |
| Exchange differences on translation of foreign operations | - | - | - | - | 124 | 124 |
| At 31 March 2009 and 1 April 2009 | 8,007 | 7,576 | (11,039) | 1,696 | (296) | 5,944 |
| Consolidated profit for the period | - | - | 341 | - | - | 341 |
| Exchange differences on translation of foreign operations | - | - | - | - | (77) | (77) |
| At 30 September 2009 | 8,007 | 7,576 | (10,698) | 1,696 | (373) | 6,208 |
Other reserve results from the application of merger relief in the Company's own accounts.
Condensed Consolidated Statement of Cash Flows for the six months ended 30 September 2009
| Six months ended 30/09/09 Unaudited £'000 | Six months ended 30/09/08 Unaudited £'000 | Twelve months ended 31/03/09 Audited £'000 | |
|---|---|---|---|
| Operating activities: | |||
| Profit before tax and finance costs | 426 | 269 | 399 |
| Depreciation | 41 | 58 | 107 |
| Amortisation: | |||
| Intellectual property rights | 203 | 321 | 640 |
| Software | - | 4 | 6 |
| Goodwill | - | - | - |
| Interest paid | (75) | (469) | (705) |
| Taxation | 228 | (78) | (267) |
| Operating cash flows before movements in working capital | 823 | 105 | 180 |
| Decrease in inventories | 182 | 218 | 366 |
| Decrease/(increase) in trade and other receivables | 40 | (147) | 433 |
| (Decrease)/increase in trade and other payables | (894) | (633) | 450 |
| Cash generated from/(used in) operating activities | 151 | (457) | 1,429 |
| Investing activities: | |||
| Proceeds on disposal of property, plant and equipment | - | 897 | 31 |
| Proceeds on disposal of businesses (net of expenses) | - | - | 748 |
| Purchase of property, plant and equipment | (30) | (47) | (61) |
| Interest received | 49 | 377 | 524 |
| Payment of deferred consideration | - | - | - |
| Purchase of subsidiary undertakings net of cash acquired | - | (20) | (19) |
| Cash from investing activities | 19 | 1,207 | 1,223 |
| Financing activities: | |||
| Repayment of loan notes | (170) | (129) | (386) |
| New bank loans | - | - | 1,485 |
| Repayment of bank loans | (200) | (743) | (1,576) |
| Capital element of finance leases | (4) | (10) | (53) |
| Interest element of finance leases | (1) | (3) | (8) |
| Cash (absorbed) from financing activities | (375) | (885) | (538) |
| Net (decrease)/increase in cash and cash equivalents | (205) | (135) | 2,114 |
| Cash and cash equivalents at the beginning of the period | 1,951 | (89) | (89) |
| Foreign exchange rate adjustments | (77) | (163) | (74) |
| Cash and cash equivalents at the end of the period | 1,669 | (387) | 1,951 |
Notes to the Condensed Consolidated Interim Financial Statements
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Reporting entity
Clarity Commerce Solutions plc is a public limited company incorporated and domiciled in England and Wales (registration number 3914814). The Company's registered address is Paterson House, Hatch Warren Farm, Hatch Warren Lane, Hatch Warren, Basingstoke, Hampshire RG22 4RA.
The Company's ordinary shares are traded on the AIM market of the London Stock Exchange plc. The condensed interim financial statements of the Group for the year ended 30 September 2009 comprise the Company and its subsidiaries.
Across the period the Group was primarily involved in the provision of software solutions for entertainment, leisure, hospitality and retail sectors with offices in the United Kingdom, United States, France and New Zealand.
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Going concern
The Directors have reviewed the projections for the forthcoming 12 month period from the date of approval of the financial information and based on the level of existing cash, projected income and expenditure, the Directors are satisfied that the Company and Group have adequate resources to continue in business for the foreseeable future. Accordingly the going concern basis has been used in preparing the Financial Statements.
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Basis of preparation
The Condensed Interim Financial Statements in this document does not constitute statutory financial statements for the purposes of s434 of the Companies Act 2006. The Statutory Financial Statements for the year ended 31 March 2009 ("Report and Accounts 2009") have been filed with the Registrar of Companies. The auditor's report on those Financial Statements, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), was unqualified and did not contain statements under s237(2) or s237(3) of the Companies Act 1985.
The Condensed Interim Financial Statements is the unaudited interim consolidated statements (the "Condensed Interim Financial Statements") of Clarity Commerce Solutions plc, a company incorporated in Great Britain and registered in England and Wales, and its subsidiaries (together referred to as the "Group") for the six month period ending 30 September 2009 (the "interim period"). The Condensed Consolidated Interim Financial Statements are unaudited.
The Condensed Consolidated Interim Financial Statements have been prepared on the basis of the accounting policies set out in the Report and Accounts 2009 except as noted below. The presentation of the Condensed Consolidated Interim Financial Statements is consistent with the Report and Accounts 2009. Where necessary comparative information has been reclassified or expanded from the previously report Condensed Consolidated Interim Financial Statements to take into account any presentational changes made in the Report and Accounts 2009. The comparative information from the 2008 Condensed Consolidated Interim Financial Statements has been amended to reclassify the Income Statement for the closure of the Clarity Commerce Solutions Inc business (Note 7).
The comparative included this business within continuing operations as the closure occurred in the second half of the year but was reported correctly in the Report and Accounts 2009.
The Condensed Consolidated Interim Financial Statements were approved by the Board and authorised for issue on 23 November 2009.
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2009.
IAS 1 (revised), 'Presentation of financial statements'. The revised standard prohibits the presentation of items of income and expenses (that is 'non owner changes in equity') in the statement of changes in equity, requiring 'non owner changes in equity' to be presented separately from owner changes in equity. All 'non owner changes in equity' are to be shown in a performance statement.
Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income).
The Group has elected to present two statements: an income statement and a statement of comprehensive income. The Condensed Consolidated Interim Financial Statements have been prepared under the revised disclosure requirements.
IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. This has not resulted in a change in the number of reportable segments presented.
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Critical judgements and estimation uncertainty
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. If in the future such estimates and assumptions, which are based on management's best judgement at the date of preparation of the financial statements, deviate from actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which circumstances change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into account presentational changes.
Impairment of goodwill, intangible assets and investments
Where there is an indication that the carrying value of items in goodwill, intangible assets and investments may have been impaired through events or changes in circumstances a review will be undertaken of the recoverable amount of those assets based on a value in use calculation which will involve estimates and assumptions to be made by management.
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Earnings/(loss) per share
The calculations of earnings/(loss) per share are based on the profit/(loss) after tax for the financial period and the following numbers of shares:
Six months ended 30/09/09 Unaudited Number Six months ended 30/09/08 Unaudited Number Twelve months ended 31/03/09 Audited Number Weighted average number of shares: For basic profit/(loss) per share 32,029,305 32,029,305 32,029,305 For diluted profit/(loss) per share 32,029,305 32,029,305 32,029,305 Six months ended 30/09/09 Unaudited £'000 Six months ended 30/09/08 Unaudited £'000 Twelve months ended 31/03/09 Audited £'000 Earnings/(loss) for the period from continuing operations 341 (89) 471 Loss for the period from discontinued operations - (94) (253) Profit on disposal of discontinued operations - 269 - Earnings/(loss) for the period attributable to shareholders of the parent company 341 86 218 Earnings/(loss) per share: Basic and diluted - continuing operations 1.06p (0.28)p 1.47p Basic and diluted - discontinued operations - 0.55p (0.79)p 1.06p 0.27p 0.68p The share options are non dilutive due to the exercise price being significantly higher than the current share price.
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Geographic segments
Below is an analysis of revenue geographic location.
Six months ended 30/09/09 Unaudited £'000 Six months ended 30/09/08 Unaudited £'000 Twelve months ended 31/03/09 Audited £'000 United Kingdom 3,969 4,127 9,792 Europe (excluding United Kingdom) 2,038 1,809 2,566 United States of America 2,670 1,872 5,083 Rest of World 165 243 242 8,842 8,051 17,683 -
Discontinued operations
The discontinued operations reported within the comparative figures were for the sale of Cyntergy Services Limited (disposed May 2008), the sale of the business of Romulus Enterprises Limited (disposed July 2008) and for the closure of Clarity Commerce Solutions Inc (closed in December 2008). None of the conditions have changed since the last disclosure.
The results of the discontinued operations, which were included in the comparative condensed consolidated interim income statement and previous financial years consolidated income statement, are as follows:
Six months ended 30/09/09 Unaudited £'000 Six months ended 30/09/08 Unaudited £'000 Twelve months ended 31/03/09 Audited £'000 Revenue - 846 881 Expenses - (940) (1,249) Balance sheet write off - - (218) Impairment of goodwill - - - Loss before taxation - (94) (586) Attributable tax expense - - - Total loss for the period - (94) (586) -
Profit on disposal of discontinued operations
Six months ended 30/09/09 Unaudited £'000 Six months ended 30/09/08 Unaudited £'000 Twelve months ended 31/03/09 Audited £'000 Consideration received - 997 997 Less net assets at dates of completion - (516) (515) Less transaction costs and other increases in provisions - (212) (149) Gain on sale before taxation - 269 333 Attributable tax expense - - - Gain on sale - 269 333 Consideration: Satisfied in cash - 897 897 Deferred payment to be satisfied in cash - 100 100 Consideration at dates of completion - 997 997 Net assets at completion: Goodwill - 500 500 Property, plant and equipment - 16 15 Net assets at date of completion - 516 515 -
Post balance sheet event
In October 2009, the Company raised £2.725m before expenses through a successful placing of 6,812,500 new ordinary shares of 25p each at 40p per share.
