17 September 2015

 

              Elecosoft plc

("Elecosoft", the "Group" or the "Company")

Building on Technology^®

 

Interim Results

For the six months ended 30 June 2015

 

Elecosoft plc, the AIM listed BIM construction and 3D visualisation software specialist, today announces its unaudited results for the six months to 30 June 2015.

 

Financial Highlights

 

·      Revenue £8.6m (H1 2014: £8.6m) of which 42% was from recurring maintenance and support revenue (H1 2014: 42%)

·      Operating profit £569,000 (H1 2014 restated: £563,000)

·      Profit before tax £502,000 (H1 2014: restated £423,000)

·      EBITDA £893,000 (H1 2014: restated £909,000)

·      Earnings per share - basic and diluted of 0.6p (H1 2014: restated 0.5p)

·      Net borrowings down 25%  to £1.5m (31 December 2014: £2.0m)

 

At constant exchange rates*

·      Revenue £9.5m, up 10%. (H1 2014: £8.6m)

·      Operating profit £599,000, up 6%. (H1 2014 restated £563,000)

·      Profit before tax £533,000, up 26% (H1 2014: restated £423,000)

·      EBITDA £938,000, up 3% (H1 2014: restated £909,000)

 

*2015 restated at 2014 average exchange rates

 

Operational Highlights

 

·      Core product releases including Arcon Evo, Bidcon BIM, Site Progress Mobile for web, Asta Powerproject BIM v2 and Asta Powerproject v13.

·      Investment in growth with the appointment of a Bidcon Sales Manager for the UK, a Staircon Sales Manager for Europe and Channel Managers for North America and Rest of World.

·      Won a significant order for Asta Powerproject in the US and established a new sales operation in that market.

 

Outlook

 

·      Continued investment in developing new markets through new reseller arrangements.

·      Management remain positive on the outlook for the full year supported by upcoming product releases and increased sales resource.

 

 

Executive Chairman, John Ketteley said:

 

"I am pleased to report an overall positive performance for the six months to 30 June 2015, despite the adverse impact of exchange rate movements. Elecosoft's transformation into a specialist international provider of software to the construction industry is beginning to bear fruit."

 

 

For further information please contact:
Elecosoft plc	http://www.elecosoft.com
John Ketteley, Executive Chairman Nick Caw, Chief Executive Officer Graham Spratling, Group Finance Director	Tel: 0207 422 0044
Finncap Ltd
Geoff Nash / Kate Bannatyne (Corporate Finance) Malar Velaigam (Corporate Broking)	Tel: 0207 220 0500
Redleaf Communications
Rebecca Sanders-Hewett / David Ison / Susie Hudson	Tel: 0207 7382 4730 elecosoft@redleafpr.com

About Elecosoft plc

 

Elecosoft plc provides software solutions which cover the core elements of a construction project - design and visualisation (3D), resource planning (4D) and cost estimation / tracking (5D). It also provides a range of engineering software tools.

 

The Group operates principally in Sweden, Germany and the UK.

 

Elecosoft plc is listed on the Alternative Investment Market in London (AIM:ELCO.L).

 

For more information please visit www.elecosoft.com

 

Chairman's Statement

 

I am pleased to report an improved performance for the six months to 30 June 2015, despite continuing adverse currency movements, and that Elecosoft's transformation into an integrated international specialist provider of market leading software and related services to the construction industry is beginning to bear fruit.

 

Group revenue and operating profit at constant exchange rates climbed 10 per cent and 6 per cent respectively in the period compared with the same period last year. At current exchange rates, group revenue and operating profit were only slightly higher as a consequence of adverse exchange rates in the period.

 

Profit before tax for the period was 19 per cent higher at £502,000 (2014: £423,000), due principally to significantly lower borrowing costs. On a constant currency basis, profit before tax increased significantly to £533,000. However basic and diluted earnings per share were restricted to 2.0 per cent before rounding, as a consequence of the placing of ordinary shares in mid-2014.

 

Group borrowings at 30 June 2015 were at £1.5m, more than 25 per cent lower than borrowings at 31 December 2014.

 

Business overview

We continue to add to and enhance our core software product range. During the period under review, we announced the following new software programs and enhancements of existing programs: (i) the new Arcon Evo 3D architectural visualisation program; (ii) an international version of Bidcon BIM, our new BIM estimating software program; (iii) an enhanced web version of our successful Site Progress Mobile App; (iv) Version 13 enhancement of Asta Powerproject; and finally (v) our new Asta Powerproject BIM 5D project management software program.

 

We also made several key appointments during the period, to support our sales teams in the sale and marketing of these significant product releases. These included the appointment of a dedicated Bidcon Sales Manager for the UK market, and Channel Managers to support our sales and marketing efforts in both North America and Rest of World.  We also held successful partner conferences in Europe and the United States. 

 

Asta Powerproject, Elecosoft's market leading project management software program used within the UK construction market, is now increasingly being marketed in overseas markets; in particular in Sweden, the Netherlands, Germany and the USA. I am also pleased to report that in the period under review, we succeeded in completing the Group's largest single order for the installation of Asta Powerproject software for a very substantial US customer.

 

Our Swedish colleagues released our new multi-discipline Bidcon estimation program, became a Microsoft Gold Partner and completed their largest combined order to date of our Bidcon, Sitecon and Powerproject software to a single customer in Sweden.

 

ESIGN, our interior visualisation and marketing operation, also demonstrated promising progress in the period signing a significant order with a large US floor manufacturer to scan its products and provide marketing and visualisation solutions.

 

Financial overview

Revenue for the first half of 2015 was £8.6m (H1 2014: £8.6m) of which £6.2m (H1 2014: £6.5m) was generated from overseas operations. Currency exchange rates for the Swedish Krona and the Euro have changed materially in the last year with the average rate for both currencies weakening against the pound by 17 per cent and 12 per cent respectively. Consequently, currency headwinds also adversely impacted the Group's revenue performance in the period under review. At constant exchange rates revenue would have been £9.5m, up by 10 per cent compared with last year.

 

Software licence sales grew 17 per cent compared with the same period last year, principally due to gaining a significant new customer in the US. Recurring revenue for the period was £3.6m (£4.0m at constant exchange rates) compared with £3.7m last year. Recurring revenue represents 42 per cent of total sales which is unchanged from last year.

 

Operating profit was £569,000 compared with £563,000 last year after product development expenses of £909,000 (H1 2014: £1.1m) and non-recurring staff costs of £161,000 (H1 2014: £nil). The adverse currency impact on the Group's revenue was partly offset by the favourable impact on the Group's operating costs, of which 75 per cent were incurred overseas (2014 H1: 80 per cent). The operating margin was unchanged at 7 per cent (H1 2014: 7 per cent).

 

Total software development expenditure amounted to £1.2m (2014 H1: £1.4m) of which £293,000 (2014 H1: £313,000) was capitalised in the period. The total spend represents 14 per cent of sales (H1 2014: 16 per cent) and is in line with the Group's commitment to ensuring that its product offerings are expanding, well maintained and leading in their segments.

 

The Group generated cash from operations of £1.2m compared to £1.1m in the first half of 2014. This positive performance helped to further reduce the Group's net debt from £2.0m at 1 January 2015 to £1.5m at 30 June 2015. Investing activities in the period were largely internal capitalised development and intangible asset purchases £50,000 (2014 H1: £78,000).

 

Profit before tax was £502,000, up 19 per cent compared to the same period last year. At constant exchange rates profit before tax would have been £533,000, an increase of some 26 per cent. Basic earnings per share were 0.6p, up 0.1p compared with the same period last year with diluted earnings per share also at 0.6p. (2014 H1: 0.5p).

 

New director

Graham Spratling joined Elecosoft in 2007 as Group Financial Controller and was actively involved in the Group's difficult transition from a Building Products and Software Group to a Specialist International Software Group. The Board was therefore delighted that he accepted the invitation to become Group Finance Director and we look forward to working with him in the continued transformation of Elecosoft.

 

Name change 

The Company completed its name change from Eleco plc to Elecosoft plc during the period. The name change is part of a planned wider, ongoing rebranding and consolidation exercise which will facilitate the promotion of Elecosoft as a specialist integrated international software group. The re-branding exercise has been well received by our customers and the market.

 

Balance sheet reconstruction

The proposed balance sheet reconstruction was duly approved by the High Court and completed successfully on 1 July 2015. As a consequence, the Group is now permitted to resume the payment of dividends when the Board considers it appropriate and prudent to do so. The Board has decided not to resume the payment of dividends at the present time but will review the policy as the growth in the business accelerates and the gearing level declines further.

 

Outlook

We continue to build on the foundations that were put in place following the successful refinancing exercise in 2014. Elecosoft is profitable and cash generative and is beginning to benefit from the market's response to the technical excellence of the software products created by the skill and flair of our development teams.  We remain positive on the outlook for the full year and beyond and look forward to making the best of the opportunities that present themselves in the second half of 2015.

 

 

John Ketteley

Executive Chairman

17 September 2015

 

 

 

Condensed Consolidated Income Statement

for the financial period ended 30 June 2015

					six months to 30 June
							2014		Year Ended
					2015		(unaudited-		31 December
					(unaudited)		restated)		2014
				Notes	£'000		£'000		£'000
	Revenue			3	8,628		8,617		16,484
	Cost of sales				(1,297)		(1,356)		(2,715)
	Gross profit				7,331		7,261		13,769
	Selling and administrative expenses				(6,496)		(6,340)		(12,329)
	Operating profit before amortisation of intangible assets and exceptional items				835		921		1,440
	Amortisation of intangible assets				(236)		(245)		(397)
	Exceptional items			5	(30)		(113)		(138)
	Operating profit			4,6	569		563		905
	Finance income			7	-		2		3
	Finance cost			7	(67)		(142)		(224)
	Profit before tax				502		423		684
	Tax				(87)		(97)		(173)
	Profit for the financial period from continuing operations				415		326		511
	Profit for the financial period from discontinued operations				-		5,911		5,556
	Profit for the financial period				415		6,237		6,067
	Attributable to:
	Equity holders of the parent				415		6,237		6,067
	Earnings per share - basic
	Continuing operations			8	0.6	p	0.5	p	0.8	p
	Discontinued operations			8	0.0	p	10.2	p	8.3	p
	Total operations				0.6	p	10.7	p	9.1	p
	Earnings per share - diluted
	Continuing operations			8	0.6	p	0.5	p	0.8	p
	Discontinued operations			8	0.0	p	10.2	p	8.3	p
	Total operations				0.6	p	10.7	p	9.1	p

 

 

 

 

Condensed Consolidated Statement of Comprehensive Income

for the financial period ended 30 June 2015

						six months to 30 June
								2014		Year  Ended
						2015		(unaudited -		31 December
						(unaudited)		restated)		2014
						£'000		£'000		£'000
	Profit for the period					415		6,237		6,067
	Other comprehensive income:
	Items that will be reclassified subsequently to profit or loss:
	Translation differences on foreign operations					(118)		39		60
	Other comprehensive income net of tax					(118)		39		60
	Total comprehensive income for the period					297		6,276		6,127
	Attributable to:
	Equity holders of the parent					297		6,276		6,127

 

 

 

Condensed Consolidated Statement of Changes in Equity

for the financial period ended 30 June 2015

		Share capital	Share premium	Merger reserve	Translation reserve	Other reserve	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	At 1 January 2015	7,487	7,923	4,086	(161)	(358)	(12,255)	6,722
	Share based payments	-	-	-	-	-	13	13
	Transactions with owners	-	-	-	-	-	13	13
	Profit for the period	-	-	-	-	-	415	415
	Other comprehensive income:
	Exchange differences on translation of net investments in foreign operations	-	-	-	(118)	-	-	(118)
	Total comprehensive income for the period	-	-	-	(118)	-	415	297
	At 30 June 2015 (unaudited)	7,487	7,923	4,086	(279)	(358)	(11,827)	7,032
		Share capital	Share premium	Merger reserve	Translation reserve	Other reserve	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	At 1 January 2014	6,066	6,396	4,086	(221)	(358)	(18,322)	(2,353)
	Issue of share capital	303	325	-	-	-	-	628
	Transactions with owners	303	325	-	-	-	-	628
	Profit for the period	-	-	-	-	-	6,237	6,237
	Other comprehensive income:
	Exchange differences on translation of net investments in foreign operations	-	-	-	39	-	-	39
	Total comprehensive income for the period	-	-	-	39	-	6,237	6,276
	At 30 June 2014 (unaudited)	6,369	6,721	4,086	(182)	(358)	(12,085)	4,551
		Share capital	Share premium	Merger reserve	Translation reserve	Other reserve	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	At 1 January 2014	6,066	6,396	4,086	(221)	(358)	(18,322)	(2,353)
	Issue of share capital	1,421	1,527	-	-	-	-	2,948
	Transactions with owners	1,421	1,527	-	-	-	-	2,948
	Profit for the period	-	-	-	-	-	6,067	6,067
	Other comprehensive income:
	Exchange differences on translation of net investments in foreign operations	-	-	-	60	-	-	60
	Total comprehensive income for the period	-	-	-	60	-	6,067	6,127
	At 31 December 2014	7,487	7,923	4,086	(161)	(358)	(12,255)	6,722

 

 

 

 

Condensed Consolidated Balance Sheet

at 30 June 2015

						30 June
						2015		2014		31 December
						(unaudited)		(unaudited)		2014
					Notes	£'000		£'000		£'000
	Non-current assets
	Goodwill				9	10,514		10,620		10,571
	Other intangible assets				9	1,771		1,601		1,683
	Property, plant and equipment					571		617		575
	Total non-current assets					12,856		12,838		12,829
	Current assets
	Inventories					10		23		8
	Trade and other receivables					2,328		2,592		3,110
	Current tax assets					189		116		148
	Cash and cash equivalents					1,686		1,127		1,198
	Assets of disposal group					-		764		-
	Total current assets					4,213		4,622		4,464
	Total assets					17,069		17,460		17,293
	Current liabilities
	Bank overdraft				10	(355)		(3,329)		-
	Borrowings				10	(750)		(1,125)		(750)
	Obligations under finance leases					(164)		(222)		(141)
	Trade and other payables					(1,193)		(2,034)		(1,586)
	Provisions					(142)		(302)		(142)
	Current tax liabilities					-		(5)		-
	Accruals and deferred income				11	(5,025)		(5,157)		(5,189)
	Total current liabilities					(7,629)		(12,174)		(7,808)
	Non-current liabilities
	Borrowings				10	(1,688)		-		(2,063)
	Obligations under finance leases					(262)		(265)		(279)
	Deferred tax liabilities					(203)		(192)		(162)
	Non-current provisions					(220)		(177)		(220)
	Other non-current liabilities					(35)		(101)		(39)
	Total non-current liabilities					(2,408)		(735)		(2,763)
	Total liabilities					(10,037)		(12,909)	-	(10,571)
	Net assets					7,032		4,551		6,722
	Equity
	Share capital					7,487		6,369		7,487
	Share premium account					7,923		6,721		7,923
	Merger reserve					4,086		4,086		4,086
	Translation reserve					(279)		(182)		(161)
	Other reserve					(358)		(358)		(358)
	Retained earnings					(11,827)		(12,085)		(12,255)
	Equity attributable to shareholders of the parent					7,032		4,551		6,722

 

Condensed Consolidated Statement of Cash Flows

for the financial period ended 30 June 2015

					six months to 30 June				Year Ended
					2015		2014		31 December
					(unaudited)		(unaudited)		2014
					£'000		£'000		£'000
	Cash flows from operating activities
	Profit before tax				502		306		7,788
	Net finance costs				67		146		228
	Depreciation charge				88		101		198
	Amortisation charge				236		245		397
	(Profit)/loss on sale of property, plant and equipment				(5)		3		(109)
	Share based payment charge				13		-		-
	Retirement benefit obligation - derecognition				-		-		(7,738)
	Decrease in provisions				-		(501)		(618)
	Cash generated in operations before working capital movements				901		300		146
	Decrease/(increase) in trade and other receivables				406		1,019		(155)
	(Increase)/decrease in inventories and work in progress				(4)		(8)		8
	Decrease in trade and other payables				(102)		(172)		(244)
	Net increase in discontinued operations working capital				-		(101)		(108)
	Cash generated/(used) in operations				1,201		1,038		(353)
	Interest paid				(87)		(174)		(240)
	Interest received				-		3		3
	Net income tax (paid)/received				(95)		57		(94)
	Net cash inflow/(outflow) from operating activities				1,019		924		(684)
	Net cash (used)/generated in investing activities
	Purchase of intangible assets				(343)		(391)		(637)
	Purchase of property, plant and equipment				(33)		(17)		(85)
	Acquisition of subsidiary undertakings net of cash acquired				-		-		(26)
	Proceeds from sale of property, plant, equipment  and intangible assets				70		15		1,114
	Sale of businesses net of expenses				-		-		474
	Net cash (outflow)/inflow from investing activities				(306)		(393)		840
	Net cash (used)/generated in financing activities
	Proceeds from new bank loan				-		-		3,000
	Repayment of bank loans				(375)		(200)		(1,513)
	Repayments of obligations under finance leases				(108)		(91)		(283)
	Issue of share capital				-		628		2,948
	Net cash (outflow)/inflow from financing activities				(483)		337		4,152
	Net increase in cash and cash equivalents				230		868		4,308
	Cash and cash equivalents at beginning of period				1,198		(3,013)		(3,013)
	Effects of changes in foreign exchange rates				(97)		(57)		(97)
	Cash and cash equivalents at end of period				1,331		(2,202)		1,198
	Cash and cash equivalents comprise:
	Cash and short term deposits				1,686		1,127		1,198
	Bank overdrafts				(355)		(3,329)		-
					1,331		(2,202)		1,198

 

 

 

 

Notes to the Condensed Consolidated Interim Financial Statements

 

 

1. General information

 

The company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 66 Clifton Street, London, EC2A 4HB.

 

The company is listed on the Alternative Investment Market ("AIM")

 

The condensed consolidated interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group's consolidated financial statements for the year ended 31 December 2014 have been filed and the audit report was not qualified and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.

 

 

2. Basis of preparation

 

The condensed consolidated interim financial statements for the six months to 30 June 2015 have been prepared in accordance with the accounting policies which will be applied in the twelve months financial statements to 31 December 2015. These accounting policies are drawn up in accordance with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and as adopted for use in the European Union that are effective at 30 June 2015.

 

The condensed consolidated interim financial statements are unaudited and have not been subject to review. They do not include all the information and disclosures required in the annual financial statements, and therefore should be read in conjunction with the Group's published financial statements as at 31 December 2014.

 

In accordance with IFRS 5, the prior year comparative figures for the six months to 30 June 2014 have been restated to reflect the reclassification of non-recurring bank fees and charges. Non recurring bank fees and charges of £113,000 were reported in discontinued operations in the Group's condensed consolidated financial statements for the six months to 30 June 2014. These costs were subsequently reclassified to exceptional items in the financial statements for the year to 31 December 2014.

 

The comparative figures for the year ended 31 December 2014 are not the Company's statutory accounts for that period but have been extracted from these accounts.

 

The Directors, having considered the Group's current financial resources, have concluded that they are adequate for the Group's present requirements. Thus the condensed consolidated interim financial information has been prepared on the going concern basis. 

 

 

New accounting standards and interpretations are effective for the first time in the current period but have had no impact on the results or financial position of the Group. Furthermore, new standards, new interpretations and amendments to standards and interpretations that have been issued but are not effective for the current period have not been adopted early.

 

Estimates

Application of the Group's accounting policies in preparing condensed consolidated interim financial statements requires management to make judgements and estimates that affect the reported amount of assets and liabilities, revenues and expenses.  Actual results may ultimately differ from these estimates.

 

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2014.

 

Risks and uncertainties

A summary of the Group's principal risks and uncertainties was set out on page 17 of the 2014 annual report and accounts. The Board considers these risks and uncertainties are still relevant to the current financial year and the impact of changes in the UK economy is reviewed in the Chairman's statement contained in this report.

 

 

3. Revenue

Revenue disclosed in the income statement is analysed as follows:

 

								Year ended
				six months to 30 June				31 December
				2015		2014		2014
				£'000		£'000		£'000
	Licence sales			2,636		2,246		4,008
	Recurring maintenance and support revenue			3,642		3,657		7,351
	Services income			2,350		2,714		5,125
				8,628		8,617		16,484

 

 

4. Segmental information

 

Operating segments

The Group comprises of software business activity only and as such the information is presented in line with management information, as one segment.

 

							Year ended
			six months to 30 June				31 December
			2015		2014		2014
			£'000		£'000		£'000
	Revenue		8,628		8,617		16,484
	Adjusted operating profit		1,744		2,001		3,464
	Product development		(909)		(1,080)		(2,024)
	Operating profit before amortisation of intangible assets and exceptional items		835		921		1,440
	Amortisation of intangible assets		(236)		(245)		(397)
	Exceptional items		(30)		(113)		(138)
	Segment result		569		563		905
	Net finance cost		(67)		(140)		(221)
	Segment profit before tax		502		423		684
	Tax		(87)		(97)		(173)
	Segment profit after tax		415		326		511
	Development costs capitalised		(293)		(313)		(553)
	Total development costs		(1,202)		(1,393)		(2,577)
	Segment result		569		563		905
	Amortisation of intangible assets		236		245		397
	Depreciation charge		88		101		198
	EBITDA		893		909		1,500

 

Adjusted operating profit represents operating profit before expensed product development costs, intangible asset amortisation and exceptional items. Development project costs are expensed as incurred unless they meet the accounting policy requirements for capitalisation. The accounting policy requirements are set out on page 43 of the 2014 annual report and accounts.

 

Geographical and sales channel information

Revenue by geographical segment represents revenue from external customers based upon the geographical location of the customer.

 

								Year ended
				six months to 30 June				31 December
				2015		2014		2014
				£'000		£'000		£'000
	UK			2,391		2,124		4,291
	Scandinavia			3,855		4,350		7,917
	Germany			1,201		1,111		2,447
	Rest of Europe			604		829		1,404
	Rest of World			577		203		425
				8,628		8,617		16,484

 

The Group utilises Business Partners to access certain markets as resellers. Revenue by sales channel represents revenue from external customers through direct sales and resellers.

 

								Year ended
				six months to 30 June				31 December
				2015		2014		2014
				£'000		£'000		£'000
	Direct			7,929		8,210		15,774
	Reseller			699		407		710
				8,628		8,617		16,484

 

 

5. Exceptional items

Exceptional items represent income and costs considered necessary to be separately disclosed by virtue of their size or nature.

 

								Year ended
				six months to 30 June				31 December
				2015		2014		2014
				£'000		£'000		£'000
	Restructuring costs			-		(113)		(113)
	Capital reduction expenses			(30)		-		(25)
				(30)		(113)		(138)

 

Legal fees associated with the balance sheet reconstruction that completed on 1 July 2015 are reported under exceptional items.

 

 

6. Operating profit

Operating profit for the period is after charging the following items:

 

								Year ended
				six months to 30 June				31 December
				2015		2014		2014
				£'000		£'000		£'000
	Non-recurring staff costs			161		-		102
	Foreign exchange losses			31		15		58
				192		15		160

 

Non-recurring staff costs principally relates to the reduction in head office personnel that are not expected to be replaced and changes to a Directors' employment contract during the period.

 

 

7. Net finance (cost)/income

Finance income and costs disclosed in the income statement is set out below:

 

							Year ended
			six months to 30 June				31 December
			2015		2014		2014
			£'000		£'000		£'000
	Finance income
	Bank and other interest receivable		-		2		3
	Finance costs
	Bank overdraft and loan interest		(60)		(134)		(209)
	Finance leases and hire purchase contracts		(7)		(8)		(15)
	Total net finance cost		(67)		(140)		(221)

 

 

8. Earnings per share

The calculations of the basic and diluted earnings per share are based on profit after tax attributable to the ordinary equity shareholders of the Company and the weighted average number of basic and diluted shares in issue for the reporting period.

 

							Year ended
			six months to 30 June				31 December
			2015		2014		2014
	Continuing operations		£415,000		£326,000		£511,000
	Discontinued operations before exceptionals		£0		£(117,000)		£(634,000)
	Discontinued operations exceptionals		£0		£6,190,000		£6,190,000
	Discontinued operations		£0		£6,073,000		£5,556,000
	Total operations profit after taxation		£415,000		£6,399,000		£6,067,000
	Basic weighted average number of shares		73,970,534		59,812,119		66,610,703
	Dilutive effect of share options		675,000		-		-
	Diluted weighted average number of shares		74,645,534		59,812,119		66,610,703
	Earnings/(loss) per share - basic
	Continuing operations		0.6	p	0.5	p	0.8	p
	Discontinued operations before exceptionals		-	p	(0.2)	p	(1.0)	p
	Discontinued operations exceptionals		-	p	10.4	p	9.3	p
	Discontinued operations		-	p	10.2	p	8.3	p
	Total operations		0.6	p	10.7	p	9.1	p
	Earnings/(loss) per share - diluted
	Continuing operations		0.6	p	0.5	p	0.8	p
	Discontinued operations before exceptionals		-	p	(0.2)	p	(1.0)	p
	Discontinued operations exceptionals		-	p	10.4	p	9.3	p
	Discontinued operations		-	p	10.2	p	8.3	p
	Total operations		0.6	p	10.7	p	9.1	p

 

Shares held by the Employee Share Ownership Trust are excluded from the weighted average number of shares in the period.

 

 

9. Goodwill and other intangible assets

The decrease in goodwill since 31 December 2014 of £57,000 relates to exchange losses on the revaluation of goodwill denominated in foreign currencies. Other intangible assets comprise capitalised development costs, acquired customer relationships and purchased intangible assets.

 

 

10. Borrowings

The bank loans and overdrafts are repayable as follows:

 

						at 30 June	at 30 June	at 31 December
						2015	2014	2014
						£'000	£'000	£'000
	In one year or less					1,105	4,454	750
	Between one and two years					750	-	750
	Between two and five years					938	-	1,313
	More than five years					-	-	-
						2,793	4,454	2,813

 

 

11. Accruals and deferred income

 

						at 30 June	at 30 June	at 31 December
						2015	2014	2014
						£'000	£'000	£'000
	Accruals					1,497	1,813	1,743
	Deferred income					3,528	3,344	3,446
						5,025	5,157	5,189

 

Deferred income represents income from software maintenance and support contracts and is taken to revenue in the income statement on a straight line basis in line with the service and obligations over the term of the contract.

 

 

12. Related Party Disclosures

Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

 

The Directors of the Company had no material transactions with the Company during the six months to 30 June 2015, other than a result of service agreements. An amount of £18,000 (2014: £18,000) was paid to JHB Ketteley &Co Limited under a lease for occupation by the Group of 66 Clifton Street, London, EC2A 4HB and £3,000 (2014: £3,000) for a contribution to the office costs at Burnham-on-Crouch. An amount of £20,000 was paid to The Boardroom Partnership for recruitment services during the period of which J Cohen (resigned 8 June 2015) is a Director.

 

 

13. Post Balance Sheet Events

On 1 July 2015 the High Court issued an order confirming the capital reduction of Elecosoft plc. As a consequence of the Capital Reduction, the Company's share premium account and share capital reduction shares issued pursuant to the capitalisation of the Company's merger reserve and share based payment reserve have been cancelled, and the nominal share capital of each Ordinary Share has reduced from 10 pence to 1 pence each. Application has been made for the new Ordinary Shares of 1 pence each to be admitted to AIM and admission of the 74,867,127 new Ordinary Shares was effective on 2 July 2015.