Ideagen plcAnnual Report and AccountsYear Ended 30 April 2015Registration number: 02805019 Contents
Welcome to Ideagen
Officers and advisors
Financial and Operational Highlights
Strategic Report
Directors’ Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statements of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statements of Changes in Equity
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
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Welcome to Ideagen
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Ideagen is a UK company quoted on the AIM market of the London Stock Exchange (Ticker: IDEA.L) and is a leading
supplier of information management software to highly regulated industries
The Group has established a global business supplying Governance, Risk and Compliance (GRC) solutions
predominantly to the Healthcare, Transport, Aerospace & Defence, Manufacturing and Financial Services Sectors.
Ideagen has operations in the UK, the USA and the Middle East and a network of partners servicing Asia Pacific, Europe
and South America
Ideagen is able to provide complete content lifecycle solutions that enable organisations to meet their Regulatory and
Compliance standards, helping them to reduce corporate risks and deliver operational excellence
The Group has over 1500 customers including 7 of the top 10 UK accounting firms, over 80% of NHS Trusts and the
top 7 global Aerospace and Defence companies
The Group has grown both organically and through a number of strategic acquisitions and this year’s results represent
the sixth consecutive year of growth in revenue, adjusted EBITDA and adjusted earnings per share.
*Before share-based payments, costs of acquiring businesses and other exceptional items
**Before share-based payments, amortisation of acquisition intangibles, costs of acquiring businesses and other exceptional items
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Ideagen plc
Officers and advisors
Directors
Jonathan Wearing - Non-Executive Chairman
Jonathan was formerly a director in the London corporate finance department of Citicorp Investment Bank Limited and previ-
ously worked in the corporate banking group of Citibank in London. He has run corporate advisory and consultancy businesses
in the City for the last 20 years and has worked on training and lecturing assignments with a wide variety of institutions in many
parts of the world. He is an early stage investor in technology companies and holds a number of directorships. Jonathan has an
MA in Economics from Cambridge University.
David Hornsby - Chief Executive Officer
David has been the Chief Executive of Ideagen Plc since June 2009 and has over 20 years’ experience in the technology sector.
David has held a number of senior management positions in both UK and US based software companies including Smart Work-
force Manangement Plc, Parametric Technology Corporation and Profund Systems Limited.
Graeme Spenceley - Chief Financial Officer & Company Secretary
Graeme has been a chartered accountant for over 25 years. He spent 18 years with KPMG, initially specialising in audit where he
managed a number of public company clients and later as an associate director in Transaction Services which specialised in the
provision of due diligence and reporting accountant services to corporates, private equity companies and banks. Graeme was
appointed to the Board of Ideagen in March 2010.
Alan Carroll - Independent Non-Executive Director
Alan has 25 years’ experience in the information systems industry during which he has worked in a senior capacity in the
development of the Ministry of Defence’s Information System Strategy. He has also been a senior sales manager and advisor
to a number of major companies including Unisys where he was head of sales for defence with responsibility for £55 million of
new sales. More recently he has founded a number of systems and software consultancies and been an early stage investor in
technology start-ups. He is currently managing director of Ultris Limited and Ultris Information Services Limited which are both
primarily focused on the UK confidential government market. Alan has an MSc in Design of Information Systems from Cranfield
Institute of Technology. Alan was appointed to the Board in June 2012.
Advisors
Nomad & Broker
finncap
60 New Broad Street
London
EC2M 1JJ
Auditor
Baker Tilly UK Audit LLP
Suite A, 7th Floor, City Gate East
Tollhouse Hill
Nottingham
NG1 5FS
Registered office
Lime Tree Business Park
Lime Tree Road
Matlock
Derbyshire, DE4 3EJ
Solicitors
Howard Kennedy
No.1 London Bridge
London
SE1 9BG
Spring Law
65 Chandos Place
London
WC2N 4HG
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Ideagen plc
Financial and Operational Highlights
Financial Highlights
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Revenue up 60% to £14.4m (2014: £9.0m)
Pro-forma organic revenue growth of 5.3%***
Annualised recurring revenues of £10.6m at year end
Adjusted EBITDA* up 43% to £4.0m (2014: £2.8m)
Adjusted diluted EPS** up by 26% to 2.11 pence (2014: 1.67 pence)
Profit before tax of £0.61m (2014: £1.07m)
Cash generated by operations of £2.25m (2014: £1.69m)
Net cash at year end of £5.3m (2014: £4.0m)
Proposed final dividend increased by 10% to 0.11 pence per share
- making a total of 0.165 pence (2014: 0.15 pence) per share
Operational Highlights
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Transformational acquisition and integration of Gael helping scale the business whilst supporting the
Group’s GRC and Healthcare strategy
Acquisition and integration of EIBS strengthening the Group’s position in the UK Healthcare sector
and providing the Group with leading portal and mobile technology
Appointment of Ashley Marron as Group COO and Ben Dorks as Group Sales and Marketing Director
Launch of dart/Portal, a Patient Information Portal based on EIBS technology
Largest single NHS contract win to date at Doncaster and Bassetlaw NHS Trust worth £1million over 5
years
Strong account management and customer retention resulting in support and maintenance contract
renewal rate of 96%
* Before share-based payments, costs of acquiring businesses and other exceptional items
** Before share-based payments, amortisation of acquisition intangibles, costs of acquiring businesses
and other exceptional items
*** based on a comparison of revenue in the year under review with pro-forma revenue for the comparative
period adjusted for acquisitions and excluding revenue from the VA Prism contract which ended in 2013
Page 4
Ideagen plc
Strategic Report for the year ended 30 April 2015
Chairman’s Statement
This has been a productive and transformational year for the business. The Group has continued to perform strongly during the
period and the integration of our most recent acquisition, Gael, is progressing as planned. The addition of Gael has allowed the
Group to significantly broaden the customer base, strengthen the solution set, and gain further scale in our core Governance,
Risk and Compliance (GRC) markets.
In the year to 30 April 2015 we have successfully delivered on ambitious targets, delivering strong growth in revenue and profit
through both organic and acquisitive growth. Adjusted EPS, an important financial metric for the Group, increased by 26% to
2.11p, representing our sixth consecutive period of earnings growth. At the same time, we have invested in our infrastructure
and product set to ensure we continue to anticipate our customer needs and remain at the forefront of market trends.
The vertical markets in which we operate, namely healthcare, complex manufacturing, aviation and banking and finance,
are characterised by a global customer profile, high consequences of controls failure and are governed by industry specific
standards. As such, the demand from organisations operating in these industries for specialist software solutions to address
these requirements and ensure adherence to exacting regulations is robust and growing, particularly as compliance becomes
more ‘’risk based’’. Furthermore, the highly fragmented market environment means that to date we have only realised a small
proportion of the opportunity available to us, and we are therefore confident of further growth through increased market share
and the expansion of our footprint within our existing customer base.
In line with our progressive dividend policy and reflecting the strength of the balance sheet, the Board is pleased to propose a
final dividend of 0.11p making a total dividend of 0.165p for the year.
I would like to take this opportunity to thank all of our employees who work tirelessly to make Ideagen a success. We have an
exciting pipeline of opportunities and I look forward to the future with continued confidence.
Jonathan Wearing
Non-Executive Chairman
Page 5
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Chief Executive’s Review
Business Review
I am pleased to report on another strong year for the Group ended 30 April 2015. As well as delivering further revenue and
profit growth, the year was defined by our most significant and transformative acquisition to date, of Gael Limited, which
completed in January of this year.
Revenue for the year was £14.4 million, an increase of 60% compared to the £9.0 million achieved in the previous year, with
proforma organic growth contributing 5.3% (2014: 13%). Adjusted EBITDA increased by 43% to £4.0 million compared to the
prior year’s £2.8 million whilst adjusted earnings per share also rose by 26% to 2.11p, up from 1.67p.
The financial strength of the business is underpinned by high levels of recurring revenue, which represent 53% (2014: 56%) of
core revenue (software licence, maintenance and support, and professional services) and cover 84% (2014: 86%) of the fixed
overhead base. Software licence revenue represented 26.3% of total revenues at £3.78 million, Maintenance and Support 49.1%
at £7.07 million, Professional Services 20.2% at £2.90 million and hardware 4.4% at £0.64 million.
In January 2015, the Group completed a successful placing raising £17.5 million to support the acquisition of Gael and
associated transaction costs and to provide adequate working capital headroom.
Cash generated by operations amounted to £2.25 million (2014: £1.69 million) representing 56% (2014: 60%) of adjusted
EBITDA. Cash generation during the year was impacted by two significant items which are not expected to recur: annual bonus
payments to Gael employees relating to the year ended 31 December 2014 made post-acquisition, and the payments for
unusually high hardware purchases towards the end of the financial year to 30 April 2014 in order to satisfy certain customer
contracts. The effect of these two items adversely affected cash flow by approximately £0.8m. The group ended the year with
cash balances of £5.3m (2014: £4.0m) and no debt.
The Group has established a global business supplying Governance, Risk and Compliance (GRC) solutions predominantly to
the healthcare, complex manufacturing, banking and finance and aviation Sectors. The Group has in parallel leveraged its
core technology and has acquired capability to build a UK business supplying content and clinical management solutions
predominantly to the NHS. Each of the Group’s chosen markets require robust information systems and exhibit a high
consequence of error should data and processes be compromised.
The Group’s top line growth in the year was driven by strong performance in the GRC markets, up 13% compared to 9% growth
in the prior year. This was offset by a modest decline in the NHS market of 3% (2014: growth of 16%), the result of a funding
uncertainty in the run up to the General Election. The Group is now experiencing renewed demand for its products from the
NHS following the General Election results and the Conservative Government’s ongoing strategy to deliver a paperless NHS, and
the Board believes that this market will be a growth driver for the Group.
Acquisitions
The acquisition of Gael, a Scottish based GRC specialist, was in line with our stated strategy of acquiring businesses with strong
IP and recurring revenues and has strengthened Ideagen’s existing markets, whilst also adding new product sets, vertical
markets and client relationships. Integration of the two businesses has proceeded in line with expectations and, as a result,
Ideagen is well placed to deliver upon two key parts of our strategy, namely: to be a dominant supplier in Governance, Risk and
Compliance and; to be a Best of Breed supplier to the NHS.
The combined business is extremely well placed in a number of key sectors, including aerospace & defence, where we now
count 7 out of the top 7 global companies as clients, finance where we have 7 out of the top 10 UK accounting firms as clients,
and healthcare with over 125 NHS Acute Trusts using our solutions. The enlarged Group now has over 1500 customers which
span across multiple geographies and size, including many blue chip names such as BAE Systems, Emirates, Ernst and Young
and the European Central Bank. As a result, the acquisition has helped de-risk the Group’s business model as our revenue base
is now spread across a greater number of clients and markets with the Group now less reliant on large enterprise NHS contracts
where purchasing behavior can be less predictable.
Page 6
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Chief Executive’s Review (continued)
In the year, the Group also acquired EIBS Limited for a net cash consideration of £1.29 million. EIBS is a software company that
has developed proprietary Information Portal, Internet and Mobile solutions for the NHS and numerous public sector, not for
profit and commercial organisations. The integration of this business is now complete, resulting in enhanced capabilities for the
product set, particularly to the Group’s mobile offering and a further consolidated position in the NHS sector.
Management Structure and Sales Strategy
Following the acquisition and ongoing integration of Gael, the enlarged Group has been successfully re-organised under a
single management team and fully integrated reporting structure. Ashley Marron, Chief Executive of Gael has been appointed
as Group Chief Operating Officer to enable integration of the Group’s product strategy, product development and professional
services groups.
Additionally, the sales and marketing team has been successfully restructured into one organisation under Ben Dorks, focused
into industry facing teams covering the Group’s key markets. The Group has also appointed a Global Head of Channel and the
Group is developing new routes to market particularly in the Asia Pacific market.
In addition to winning new customers, a key proponent of the Group’s sales strategy is expanding its footprint within the existing
customer base. This represents a key growth area, both through winning contracts from new divisions within existing customers
and by up-selling additional elements of the solution set, including the newly acquired Gael and EIBS solutions. To date, the
sales team has been successful in both migrating customers onto new products as they become available and cross selling new
products and services into the customer base.
Product Development
Product development remains an important part of the Group’s strategy and we currently have over 117 employees within this
function. The Group is focused on ensuring all of our current products remain ‘world class’ in their specific markets and that
we can continue to win and develop ‘world class’ customers. Furthermore, an important initiative is the development of the
Group’s Amazon Web Services (AWS) based, scalable SaaS Risk and Compliance platform, Enlighten, which ensures customers
now have the choice in terms of delivery method (SaaS, Hosted or on premise). Enlighten has also enabled the Group to bid for
significantly larger contracts which are predominantly recurring in nature.
Infrastructure
The Group operates from 3 primary locations: Nottingham, East Kilbride and Welwyn Garden City and has 3 satellite offices in
Bristol, Sittingbourne and Matlock.
At year end the Group had 243 employees across the following functions: Sales and Marketing - 55, Customer Services and
Support - 45, Research and Development - 117, Finance and Administration - 26. The Group will continue to recruit to support
its ongoing growth plans.
Outlook
The new financial year has started strongly and we have seen continued progress across all of the Group’s product and markets.
Furthermore, in the wake of the General Election in May, purchasing patterns in the NHS appear to have returned to a more
normal level following a period of uncertainty in the lead up to the Election. The Group has a strong pipeline of new business
opportunities and continues to develop sales levels to existing customers which provides the board with confidence for the year.
David Hornsby
Chief Executive Officer
Page 7
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Financial Review of the year
Revenue for the year ended 30 April 2015 increased by 60% to £14.4 million (2014: £9.0 million). Within this, underlying
organic revenue growth was 5.3% based on a comparison of revenue in the year under review with pro-forma revenue for the
comparative period adjusted for the Gael, EIBS, MSS and Pentana acquisitions and excluding revenue generated from the VA
PRISM contract in the early part of 2013/14.
Recurring revenues represent 53% (2014: 56%) of core revenues and cover 84% (2014: 86%) of the fixed overhead base. The
decrease is due to a slightly lower historical proportion of recurring revenues in the businesses acquired. Software licence
revenue represented 26.3% (2014: 21.6%) of total revenues at £3.78 million (2014: £1.94 million), Maintenance and Support
49.1% (2014: 49.6%) at £7.07 million (2014: £4.45 million), Professional Services 20.2% (2014: 21.8%) at £2.90 million (2014: £1.95
million) and hardware 4.4% (2014: 7.0%) at £0.64 million (2014: £0.63 million).
Adjusted EBITDA increased by 43% to £4.02 million (2014: £2.81 million). The adjusted EBITDA margin reduced to 28% (2014:
31%) as expected following increased investment in products, customer service and the longer-term infrastructure of the
business.
Amortisation of acquisition intangibles of £2.09 million (2014: £0.95 million) represents the majority of the total depreciation and
amortisation charge of £2.50 million (2014: £1.22 million). The £188,000 increase in the fair value of contingent consideration
related to settling the earn-out on the acquisition of Pentana in 2013.
The adjusted group tax charge was £0.59 million (2014: £0.41 million). This has been adjusted to exclude the deferred tax credits
associated with the amortisation of acquisition intangibles and share based payment charges. The adjusted group tax charge
represents 16% (2014: 16%) of adjusted PBT of £3.61 million (2014: £2.55 million). A further taxation credit of £0.29 million
relating to the tax deductions available on the exercise of share options has been taken in reserves. Accordingly, the group’s
corporation tax liability has been reduced to £0.04 million (2014: £0.28 million).
As a result of the above, adjusted diluted earnings per share increased by 26% to 2.11p (2014: 1.67p).
The Group’s financial position has continued to strengthen. Net assets increasing to £31.2 million (2014: £13.4 million). Intangible
assets increased to £35.1 million (2014: £11.8 million) following the acquisitions of Gael and EIBS during the year. Net current
assets were £1.23 million (2014: £2.60 million).
Cash generated by operations amounted to £2.25 million (2014: £1.69 million) representing 56% (2014: 60%) of adjusted
EBITDA. Cash generation during the year was impacted by two significant items which are not expected to recur: annual bonus
payments to Gael employees relating to the year ended 31 December 2014 made post-acquisition, and the payments for
unusually high hardware purchases towards the end of the financial year to 30 April 2014 in order to satisfy certain customer
contracts. The effect of these two items adversely affected cash flow by approximately £0.8 million. The group ended the year
with cash balances of £5.3 million (2014: £4.0 million) and no debt.
The Group completed a share placing in January 2015 raising £17.5 million before costs to support the acquisition of Gael and
provide adequate headroom. The net cash outflows on acquisition of businesses during the year were £14.59 million on Gael
and £1.29 million on EIBS. Deferred consideration of £3.2 million is payable in respect of the acquisition of Gael of which £1.6
million is payable in January 2016 and £1.6 million in January 2017.
Dividend
The Board proposes a final dividend of 0.11 pence per share payable on 12 November 2015 to shareholders on the register on
30 October 2015 subject to approval at the forthcoming Annual General Meeting. The corresponding ex-dividend date is 29
October 2015.
Graeme Spenceley
Chief Financial Officer
Page 8
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Customer Case Studies
Brussels Airlines - Belgium’s flagship
carrier
Brussels Airlines – which operates 49 aircraft and has 3,500
employees – has been working with Ideagen to implement
its Gael Insight suite of software solutions to transform safety
and operational performance through efficient safety and
risk management and in depth performance indicators.
Adriaan Charlet, the airline’s Safety Services Manager, said:
“Q-Pulse and the overall Gael Insight solution has provided
us with much better efficiency in investigating safety issues.
It has also provided safety related efficiencies as well as
operational reporting benefits.
“The risk management and performance monitoring
capabilities in particular have been extremely beneficial for
us. Risk in particular was a very important part of the overall
solution – not only because we can focus on the safety issues
– but also enhance our operational risk assessments. For
example, nowadays we are able to carry specific cargo that
requires to be handled with care thanks to being able to risk
assess it and feed the results back into the system.
Performance monitoring is the link between safety and
efficiency. In the past we gathered information ourselves
manually from a variety of different databases. However now,
thanks to being able to monitor performance of the business
through a series of KPIs, we are able to view all of that data
in a blink of an eye in one central portal. We don’t need
to search or look for this ourselves, the system does this
for us and tells us what areas require extra attention or are
performing well.”
Dirk Adriaenssens, who oversees Brussels Airlines’ Safety &
Compliance Monitoring Department, said: “We invested in an
integrated software suite because we required one solution
to manage all of our safety and compliance monitoring
activities. The solution gives us full integration of all safety
issues for all departments and is also able to integrate with
existing interfaces – such as our flight data monitoring
system or our scheduling software – for a complete safety
product.
“The largest benefit we’ve seen is that it can be used online
and offline and provides us with higher efficiencies in that
we now don’t have to duplicate a lot of our tasks and data.
This encourages the same working methods throughout the
organisation in regards to capturing safety and operational
issues and other forms of data.”
Mr Adriaenssens continued: “We are now capturing safety
issues more easily and working more proactively as we can
detect hazards in advance even better. This has helped us
not only improve safety even more here at Brussels Airlines,
but has increased efficiency as everyone is using and
becoming knowledgeable in one tool.”
“The risk management and performance
monitoring capabilities in particular have
been extremely beneficial for us. Risk in
particular was a very important part of the
overall solution”
Page 9
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Customer case studies (continued)
NHS - Birmingham Children’s Hospital
NHS Foundation Trust
Birmingham Children’s Hospital provides the widest range
of children’s health services for young patients from
Birmingham, the West Midlands and beyond with over
270,000 patient visits every year.
Prior to implementing Ideagen’s PatientFirst software,
Birmingham’s Children’s Hospital had been using more of
a Patient Administration System (PAS) than a clinical patient
management system, with the Emergency Department itself
being run using a manual white (wipe) board.
Dr Benjamin Stanhope, one of six full-time consultants
responsible for patient care within the Emergency
Department, said: “This was quickly considered to be an
inaccurate and inefficient way of working and had created
some difficulties, particularly in the tracking of patients.
“There were also challenges in our ability to safely and
accurately record patients’ vital signs; with no facility to
electronically record administration of nurse-dispensed
Patient Group Directives (PGDs) for drugs given at triage.
This led to the Trust exploring more effective options.”
Dr Stanhope added: “PatientFirst was chosen due to the
hospital’s confidence that Ideagen could deliver a purpose
built, customisable Emergency Department management
tool. The key deliverable was in Ideagen working together
with us to shape the project pre and post-implementation.
We had confidence in the company and in our specific
Ideagen team and our selection of PatientFirst was
reaffirmed by strong testimonials from colleagues who were
familiar with the system.”
Once up and running, PatientFirst completely transformed
the way in which the Emergency Department at Birmingham
Children’s Hospital NHS Foundation Trust operated, from
improved tracking of patients and speed of data access to
achieving national targets.
Dr Stanhope continued: “We now have confidence in the
tracking of our patients throughout the department as well
as having quick and simple access to historical and medicinal
records so we are always aware of a patient’s situation. There
have been fewer errors recorded, such as patients not being
seen in order, which has also improved safety and overall
operations. Overall productivity has been enhanced as we
now have the ability to manage departmental workload
much more efficiently. Our situation can be seen remotely by
the Hospital Operation Centre (HOC), meaning Trust-wide
activity and resource can be coordinated more efficiently.
Our governance needs are being maintained and exceeded
with improvements in accuracy of activity and metrics,
allowing us to continually achieve the national Emergency
Department targets. This is of particular financial benefit, with
the functionality of the product improving quality coding
against patient episodes thus reducing missed remuneration
for under-coded activity.”
“PatientFirst was chosen due to the
hospital’s confidence that Ideagen could
deliver a purpose built, customisable
Emergency Department management tool.
“The key deliverable was in Ideagen working
together with us to shape the project pre
and post-implementation.”
Page 10
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Customer Case Studies
Banco Bilbao Vizcaya Argentaria SA
(BBVA) internal audit
BBVA is a multinational Spanish banking group, providing
financial services in over 30 countries and to 50 million
customers throughout the world. In addition to being the
second largest bank in Spain, the company also has a strong
international presence in Mexico, South America, United
States, Asia and Turkey.
The initial need for an automated audit management tool
was established at BBVA and to help the audit department
choose the best solution for their needs they implemented a
selection committee of six auditors from different audit units,
in order to evaluate the three shortlisted software products.
The evaluation process was centred on solving certain critical
issues to BBVA, which include communication, knowledge
exchange, security and the standardising of core policies and
procedures to provide much more accountability.
Solution
Cristina Gonzalez Barreda, BBVA’s Quality Assurance and
Audit Tools Director for Internal Audit explained that:
“Pentana was selected as the chosen provider due to
versatility, functionality and also because it was a strategic fit
with the manner in which we conducted our audits.
BBVA found that one of the most significant benefits that
our 650 users have experienced as a result of implementing
Pentana is improved communication around risk
management, which undeniably results in “better audits and
better tests on our risk model.”
Cristina sited the feature of Pentana that she finds most
useful for her daily work is being able to build report views.
This is where the user can set up all the columns and
filters exactly as they would like, save it and easily retrieve
the “report” later. This feature uses capability called “data
grids,” which allows a user to build reports from within the
application using very simple graphical tools that are built in
to the system, thus allowing access to permitted information
from anywhere within the system without needing a specialist
report writing tool. Once done, these “views” can then be
saved, shared and re-used across the enterprise. They also
provide management with easy and immediate access to
“snapshots” of what’s happening in the universe
Conclusion
Cristina summarises her views on the relationship with
Ideagen and the experience of using Pentana:
“I would definitely recommend Ideagen and
its Pentana solution to my peers due to
their commitment, their solution and their
professionalism.”
Page 11
Ideagen plc
Strategic Report for the year ended 30 April 2015 (continued)
Key Performance Indicators
Key financial performance indicators used by management are as follows:
Performance indicator
2015
2014
Method of measurement
Revenue for the year (£m)
Adjusted EBITDA (£m)
14.4
4.0
9.0
2.8
Gross margin
86.9%
84.1%
Adjusted EBITDA margin
27.9%
31.3%
EBITDA adjusted for business
acquisition costs, share-based
payment charges and other
exceptional items
Gross profit as a percentage of
revenue
Adjusted EBITDA as a percentage of
revenue
Principal risks and uncertainties
Risk management is an important part of the management process throughout the Group and a policy of continuous
improvement is adopted in assessing the adequacy of the internal system of controls. The Group’s operations expose it to a
variety of risks including strategic, economic, operational and financial. The management of the group monitors the exposures
to these risks in order to limit the adverse effects of these risks on the financial performance of the Group.
Strategic. The Group operates in a dynamic market and constantly seeks to ensure the solutions it offers are competitive.
Economic. A worsening of the economic climate may lead to reduced spend on IT systems and services by customers. However,
the Group has products and solutions which can help customers lower their cost base in difficult trading conditions and to
some extent address compliance issues which need to be covered even in an economic downturn.
Operational. The Group’s most significant assets are the intellectual property developed by the Group, the intangible assets
acquired with business acquisitions and the employees of the Group. Ongoing product review and investment into product
development together with the Group’s quality procedures seek to ensure that products are reliable, of high quality and
relevant to market requirements.
Financial. Management actively review the cash flow position of the Group both in the short and medium term and maintain
a level of cash and debt finance facilities designed to ensure that the Group has sufficient funds for its operations. The greater
part of the Group’s revenues and costs are denominated in sterling however the Group is exposed to foreign exchange risk,
principally through profits and cash inflows generated in US dollars by the Group’s US subsidiaries. The foreign exchange risk
is partly addressed by maximising costs denominated in US dollars. Management closely monitors exchange rate fluctuations
and will use forward contracts when considered to be appropriate to reduce this risk. The Group implements appropriate credit
checks on potential customers before sales are made. The amount of exposure to individual customers is subject to a limit
which is regularly reassessed.
Approved by the Board and signed on its behalf by
.........................................
Graeme Spenceley
Director & Company Secretary
5 October 2015
Page 12
Ideagen plc
Directors’ Report for the year ended 30 April 2015
The directors are pleased to present their report and the audited consolidated financial statements for the year ended 30 April
2015.
Results and dividends
A review of the results for the year and the financial position of the Group is included in the Strategic Report on pages 5 to 12
and details are set out in the financial statements on pages 18 to 62.
A final dividend for 2014 of 0.1 pence per share amounting to £123,000 and an interim dividend for 2015 of 0.055 pence per
share amounting to £96,000 were paid during the year. The directors propose a final dividend in respect of the year of 0.11
pence per share payable on 12 November 2015 to shareholders on the register on 30 October 2015. This is subject to approval
by shareholders at the forthcoming Annual General Meeting.
Directors
The directors who held office during the year were as follows:
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Jonathan P Wearing (Non-Executive Chairman)
David R K Hornsby (Chief Executive Officer)
Graeme P Spenceley (Finance Director)
Les D Paul (Chief Technology Officer)
(resigned 31 July 2014)
Alan M Carroll (Non-Executive Director)
Directors’ indemnity and insurance
The Group maintained insurance cover during the year for its Directors and Officers and those of subsidiary companies under a
Directors and Officers liability insurance policy against liabilities which may be incurred by them while carrying out their duties.
Events after the end of the reporting period
Issues of ordinary shares
In order to satisfy the exercise of share options, the company issued 470,000 shares at 8.5 pence each on 6 May 2015 and
18,000 shares at 20 pence on 7 August 2015.
Auditor
In accordance with the Companies Act 2006 a resolution proposing the reappointment of Baker Tilly UK Audit LLP as auditor will
be put to the members at the forthcoming Annual General Meeting.
Going concern
The Group’s business activities and the factors likely to affect its future development, performance and position together with a
review of the financial position of the Group, its cash flows and liquidity position are set out in the Strategic Report on pages 5
to 12.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for
the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial
statements.
Future developments
The strategic report on pages 5 to 12 refers to the Group’s ongoing product development and sales growth initiatives. In
addition, we will continue to seek to acquire businesses with strong intellectual property and recurring revenues operating within
appropriate markets.
Page 13
Ideagen plc
Directors’ Report for the year ended 30 April 2015 (continued)
Current Trading & Outlook
The Group has significant contracted work in progress, a growing recurring revenue base and a strong pipeline of new business.
The NHS has been, and remains, particularly strong for the Group and we are also encouraged with the increase in the new
business pipeline within our commercial sector as industry regulations continue to drive demand for our software. The Board is
therefore confident that the Group will continue to deliver profitable growth this year and beyond.
Approved by the Board and signed on its behalf by:
.........................................
Graeme Spenceley
Director & Company Secretary
5 October 2015
Page 14
Ideagen plc
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare group and company financial statements for each financial year. The directors
are required by the AIM rules of the London Stock Exchange to prepare group financial statements in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and have elected under company
law to prepare the company financial statements in accordance with IFRS as adopted by the EU.
The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the group
and the company and the financial performance of the group. The Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to
their achieving a fair presentation.
Under company law the directors must not approve financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and the company and of the profit or loss of the group for that period.
In preparing the group and company financial statements, the directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with IFRSs adopted by the EU;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group
and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s
and the company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and
the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Ideagen plc website.
Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Page 15
Independent Auditor’s Report to the Members of
Ideagen plc (Registration number: 02805019)
We have audited the group and parent company financial statements (“the financial statements”) which comprise the Group
and Parent Company Statements of Financial Position, the Group Statement of Comprehensive Income, the Group and Parent
Company Statements of Cash Flows, the Group and Parent Company Statements of Changes in Equity and the related notes.
The financial reporting framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As more fully explained in the Statement of Directors’ Responsibilities set out on page 15, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at http://
www.frc.org.uk/auditscopeukprivate
Opinion on financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and the parent’s affairs as at 30 April
2015 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
Page 16
Independent Auditor’s Report to the Members of
Ideagen plc (Registration number: 02805019)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in
our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Neil Stephenson (Senior Statutory Auditor)
For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor
Suite A, 7th Floor, City Gate East
Tollhouse Hill
Nottingham
NG1 5FS
5 October 2015
Page 17
Ideagen plc
Group Statement of Comprehensive Income for the Year Ended 30 April 2015
2015
Note
£’000
Revenue
Cost of sales
Gross profit
Operating costs
Profit from operating activities before depreciation, amortisation,
share-based payment charges and exceptional items
Depreciation and amortisation
Costs of acquiring businesses
Share-based payment charges
Profit from operating activities
Movement in fair value of contingent consideration
Finance income
Profit before taxation
Taxation
Profit for the year
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations
2
3
3
18
21
15
5
3,7
Total comprehensive income for the year attributable to the owners
of the parent company
2014
£’000
8,970
(1,425)
7,545
(4,733)
2,812
14,389
(1,892)
12,497
(8,477)
4,020
(2,503)
(1,220)
(450)
(276)
791
(188)
5
608
(128)
480
(4)
476
(246)
(285)
1,061
-
10
1,071
(198)
873
(10)
863
Earnings per share
Basic
Diluted
Pence
Pence
0.35
0.34
0.72
0.68
8
8
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 18
Ideagen plc (Registration number: 02805019)
Group Statement of Financial Position at 30 April 2015
Assets and liabilities
Non-current assets
Intangible assets
Property, plant and equipment
Deferred income tax assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Contingent consideration on business combinations
Current income tax liabilities
Deferred revenue
Deferred consideration on business combinations
Non-current liabilities
Deferred consideration on business combinations
Deferred income tax liabilities
2015
Notes
£’000
2014
£’000
9
10
7
12
13
14
15
16
17
17
7
35,050
11,807
302
876
166
173
36,228
12,146
55
7,332
5,266
12,653
3,476
47
44
6,228
1,628
11,423
1,613
4,656
6,269
389
3,637
4,011
8,037
2,421
327
283
2,356
50
5,437
-
1,377
1,377
Net assets
31,189
13,369
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 19
Ideagen plc
Group Statement of financial position as at 30 April 2015 (continued)
Equity
Issued share capital
Share premium
Merger reserve
Share-based payments reserve
Retained earnings
Foreign currency translation reserve
2015
Notes
£’000
2014
£’000
19
19
19
21
1,773
23,443
1,167
653
4,160
(7)
1,219
6,870
1,167
596
3,520
(3)
Equity attributable to owners of the parent
31,189
13,369
Approved and authorised for issue by the Board on 5 October 2015 and signed on its behalf by:
......................................... ……………………………………
David Hornsby – Director
Graeme Spenceley – Director
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 20
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Ideagen plc
Group Statement of Cash Flows for the year ended 30 April 2015
Cash flows from operating activities
Notes
£’000
2015
Profit for the year
Depreciation of property, plant and equipment
Amortisation of intangible non-current assets
Loss on disposal of property, plant and equipment
Share-based payment charges
Finance income recognised in profit or loss
Taxation charge recognised in profit or loss
Business acquisition costs in profit or loss
Net foreign exchange (gain)/loss in profit or loss
Movement in fair value of contingent consideration
Decrease/(increase) in inventories
Increase in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in deferred revenue liability
Cash generated by operations
Interest received
Income tax paid
Business acquisition costs paid
Net cash generated by operating activities
Cash flows from investing activities
Net cash outflow on acquisition of businesses net of cash acquired
Payments of deferred consideration on business combinations
Payments of contingent consideration on business combinations
Payments for development costs
Payments for property, plant and equipment
Proceeds of disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from placing of equity shares
Payments for share issue costs
Proceeds from issue of shares under the share option schemes
Equity dividends paid
Net cash generated/(used) by financing activities
Net increase/(decrease) in cash and cash equivalents during the year
Cash and cash equivalents at the beginning of the year
Effect of exchange rate changes on cash balances held in foreign currencies
Cash and cash equivalents at the end of the year
10
9
21
5
7
18
15
18
15
9
10
19
19
25
25
2014
£’000
873
110
1,110
2
285
(10)
198
246
10
-
(389)
(1,154)
392
14
1,687
5
(281)
(180)
1,231
(2,844)
(106)
-
(525)
(65)
24
480
156
2,347
-
276
(5)
128
450
(13)
188
334
(1,487)
(648)
42
2,248
5
(185)
(312)
1,756
(15,879)
(50)
(468)
(941)
(98)
9
(17,427)
(3,516)
17,500
(584)
211
(219)
16,908
1,237
4,011
18
5,266
-
-
5
(61)
(56)
(2,341)
6,372
(20)
4,011
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 23
Ideagen plc (Registration number: 02805019)
Company Statement of financial position as at 30 April 2015
Assets and liabilities
Non-current assets
Intangible assets
Property, plant and equipment
Investments in subsidiaries
Deferred income tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Contingent consideration on business combinations
Deferred revenue
Deferred consideration on business combinations
Non-current liabilities
2015
Notes
£’000
2014
£’000
9
10
11
7
13
14
15
17
300
18
25,498
236
26,052
5,728
1,409
7,137
796
47
259
1,628
2,730
316
24
9,994
137
10,471
1,408
1,816
3,224
1,210
327
141
50
1,728
Deferred consideration on business combinations
17
1,613
-
Net assets
28,846
11,967
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 24
Ideagen plc (Registration number: 02805019)
Company Statement of financial position as at 30 April 2015 (continued)
Equity
Issued share capital
Share premium
Merger reserve
Share-based payments reserve
Retained earnings
2015
Notes
£’000
2014
£’000
19
19
19
21
1,773
23,443
1,218
653
1,759
1,219
6,870
1,218
596
2,064
Equity attributable to owners of the parent
28,846
11,967
Approved and authorised for issue by the Board on 5 October 2015 and signed on its behalf by:
......................................... ……………………………………
David Hornsby – Director
Graeme Spenceley – Director
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 25
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Page 27
Ideagen plc
Company statement of cash flows for the year ended 30 April 2015
Cash flows from operating activities
(Loss)/profit for the year
Depreciation of property, plant and equipment
Amortisation of intangible non-current assets
Share-based payment charge
Finance income recognised in profit or loss
Taxation (credit)/charge recognised in profit or loss
Business acquisition costs in profit or loss
Movement in fair value of contingent consideration
Increase in trade and other receivables
Movement in intra-group balances
Increase in trade and other payables
Increase in deferred revenue
Cash generated by operations
Interest received
Business acquisition costs paid
Net cash generated by operating activities
Cash flows from investing activities
Payments for investments in subsidiaries
Payment of deferred consideration on business combinations
Payment of contingent consideration on business combinations
Payments for development costs
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from placing of equity shares
Payments for share issue costs
Proceeds from issue of shares under the share option schemes
Equity dividends paid
Net cash generated/(used) by financing activities
Net decrease in cash and cash equivalents during the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2015
Notes
£’000
2014
£’000
(465)
23
93
120
(2)
(23)
450
188
(466)
2,775
80
118
2,891
2
(312)
2,581
(19,284)
(50)
(468)
(77)
(17)
82
16
83
77
(8)
49
246
-
(428)
2,151
14
2
2,284
3
(180)
2,107
(4,190)
(106)
-
(199)
(4)
(19,896)
(4,499)
17,500
(584)
211
(219)
16,908
(407)
1,816
1,409
-
-
5
(61)
(56)
(2,448)
4,264
1,816
10
9
15
18
15
9
10
19
19
25
25
The notes on pages 29 to 62 form an integral part of these financial statements.
Page 28
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
1
Accounting policies
Reporting entity
Ideagen plc is a public limited company, incorporated and domiciled in England & Wales. The ordinary shares of the
company are traded on the AIM market of the London Stock Exchange.
Statement of compliance
These financial statements have been prepared in accordance with all International Financial Reporting Standards
(“IFRS”), as adopted by the European Union, and IFRIC interpretations applicable as at 30 April 2015 and with those
parts of the Companies Act 2006 applicable to those companies reporting under IFRS.
Basis of preparation
These financial statements have been prepared in sterling on an historical cost basis, unless otherwise stated, and have
been rounded to the nearest thousand pounds.
The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to
present its individual Statement of Comprehensive Income and related notes. The loss for the year dealt with in the
financial statements of the Parent Company for the year ended 30 April 2015 was £465,000 (2014: profit of £82,000).
A summary of the significant accounting policies used in the preparation of these financial statements is set out below.
Basis of consolidation
The group financial statements include the financial statements of the Company and all of its subsidiary undertakings
made up to 30 April 2015. Subsidiaries are consolidated from the date of acquisition, being the date on which
the group obtains control, and continue to be consolidated until the date that such control ceases. All intra-group
balances and transactions are eliminated. The financial statements of all subsidiaries are prepared up to the same date
as the parent Company.
Revenue recognition
Revenue is measured at the fair value of the consideration received from the sale of software licences and the
rendering of services, net of value added tax and any discounts. Revenue is recognised as follows:
(a)
(b)
(c)
Perpetual software licences
Revenue is recognised on delivery of the licence to the customer.
Professional services and hardware sales
Revenue in respect of professional services such as consulting days, training and bespoke development are
recognised as these services are delivered. Revenue in respect of sales of third party hardware are recognized
on delivery.
Annual support and maintenance
Revenue is recognised on a time-basis over the length of the support period. Annual support and
maintenance is normally invoiced in advance and a deferred revenue liability is recognised in the statement
of financial position to represent the element of the support and maintenance revenue deferred to be
recognised as revenue in the future.
Page 29
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
1
Accounting policies (continued)
Foreign currencies
In preparing the financial information of each individual group entity, transactions in currencies other than the entity’s
functional currency are recognised at the rates of exchange prevailing at the date of those transactions. At the end
of the financial year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise.
For the purposes of the consolidated financial information, the assets and liabilities of foreign operations are translated
into sterling using exchange rates prevailing at the end of each financial year. Income and expenses are translated at
the average exchange rates for the year, unless exchange rates fluctuate significantly during the year, in which case
the exchange rates at the dates of the transactions are used. Exchange differences arising are recognised in other
comprehensive income and accumulated in a foreign currency translation reserve within equity.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are expensed in the Statement of Comprehensive Income on a straight line
basis over the lease term.
Exceptional items
The Group presents as exceptional items on the face of the Statement of Comprehensive Income those material items
of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit
separate presentation to allow shareholders to understand better the elements of financial performance in the year, so
as to facilitate comparison with prior years.
Taxation
The tax charge or credit is based on the result for the year and comprises current and deferred income tax.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the year end date and includes any adjustment to tax payable in respect of previous years.
Deferred income tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities included in the financial statements and the tax base of those assets and liabilities. Deferred income tax assets
are recognised only to the extent that the directors consider that it is probable that there will be suitable taxable profits
in the future against which an asset can be utilised.
Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the year end date. Deferred income tax assets and
deferred income tax liabilities arising in different tax jurisdictions are not offset.
Pensions and post retirement benefits
The group operates a defined contribution pension scheme for certain employees. Payments are made by the group to
both this scheme and to individual private defined contribution pension arrangements for certain other employees
Contributions are charged in the Statement of Comprehensive Income as they become payable.
Goodwill
Goodwill arising on business combinations is initially measured at cost being the excess of the fair value of the
consideration paid over the group’s interest in the net fair value of the identifiable assets and liabilities acquired.
Goodwill is subsequently measured at cost less any accumulated impairment losses.
Goodwill is not amortised but is reviewed annually for impairment. Impairment is determined by assessing the
recoverable amount of the cash-generating unit which contains the goodwill. Where the recoverable amount of
the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the Statement of
Comprehensive Income.
Page 30
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
1
Accounting policies (continued)
Other intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses. The estimated useful life and amortisation method are reviewed annually with the
effect of any changes being reflected on a prospective basis.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised
at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired in a business
combination are reported at their initial fair value less amortisation and accumulated impairment losses.
Research costs are expensed as incurred. An intangible asset arising from development expenditure on a project is
only recognised if management considers that it is technically feasible and that there are sufficient resources available
to complete the asset so that it will be available for use or sale, that it intends to complete and is able to sell or use the
asset to generate future economic benefits and that the costs of the development project can be measured reliably.
Following the initial recognition of the expenditure, the asset will be carried at cost less accumulated amortisation and
impairment losses. Amortisation is applied once the asset is available for sale to write off the cost over the period which
is expected to benefit from the sale of the asset.
The annual amortisation rates currently applied to the group’s intangible assets are as follows:
Software
Development costs
20% or 25%
20% or 25%
Customer relationships
10%
Amortisation charges are included in ‘Depreciation and amortisation’ in the Consolidated Statement of Comprehensive
Income.
The Company’s investments in subsidiaries
The Company recognises its investments in subsidiaries at cost less any impairment in its separate financial statements.
Impairment is determined by assessing the recoverable amount of the investment. Where the recoverable amount is
less than the carrying amount, an impairment loss is recognised in the Statement of Comprehensive Income
Property, plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and any impairment in value. Depreciation is
calculated at the annual rates shown below, so as to write off the cost, less any estimated residual values, over the
expected useful economic lives of the assets concerned.
•
•
•
•
Office equipment at 25% or 33% on a straight line basis
Motor vehicles at 25% on a reducing balance basis
Leasehold improvements over the remaining lease term
All other plant and equipment assets at 25% on a straight line basis.
The remaining useful lives and residual values of plant and equipment are reassessed by the directors each year.
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. If any indication exists, the carrying values are written down to the
recoverable amount.
Impairment of assets
The Group reviews the carrying amounts of its tangible and intangible assets at least annually to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount provided that this does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss unless the relevant asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
Page 31
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
1
Accounting policies (continued)
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the estimated selling
price for the inventories less all costs necessary to complete the sale.
Trade and other receivables
Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Trade and other receivables are measured at amortised cost using the effective interest
method less any impairment provision. An impairment provision is made against a trade receivable only when there
is objective evidence that the Group may not be able to recover the whole invoiced amount as a result of events
occurring after the initial recognition of the asset.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term
deposits with an original maturity date of 3 months or less. For the purpose of the statement of cash flows, cash and
cash equivalents as defined above are stated net of any outstanding bank overdrafts.
Financial liabilities and equity instruments
Equity and debt instruments are classified as either financial liabilities or as equity in accordance with the substance of
the contractual arrangements and the definitions of a financial liability and an equity instrument.
The Group’s financial liabilities include trade and other payables and borrowings which are measured at amortised cost
using the effective interest rate method.
An equity instrument is any contract which evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Group, such as share capital and share premium, are recognised at the
proceeds received net of direct issue costs.
Contingent consideration
Contingent consideration is initially measured at fair value at the date of completion of the acquisition.
The accounting for changes in the fair value of contingent consideration arising on business combinations that do not
qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement
is accounted for within equity. Contingent consideration that is classified as a liability is remeasured to fair value at
subsequent reporting dates and the corresponding gain or loss is recognised in the Statement of Comprehensive
Income.
Share-based payments
The cost of equity settled transactions with employees is measured by reference to the fair value on the date they are
granted. The fair value is determined using a Black-Scholes pricing model based on a range of inputs. The fair value of
equity-settled transactions is charged to the Statement of Comprehensive Income over the period in which the service
conditions are fulfilled with a corresponding credit to a share-based payments reserve in equity.
On the exercise of share options, an amount equal to the fair value of the option at the date it was granted is
transferred from the share-based payments reserve into retained earnings.
Page 32
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
1
Accounting policies (continued)
Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that
affect the amounts reported for assets, liabilities, revenues and expenses. However the nature of estimation means that
actual outcomes could differ from those estimates.
In applying the Group’s accounting policies, management has made the following judgements and estimates which
have the most significant effect on the amounts recognised in the financial statements.
Acquisition intangibles
The Group initially measures the separable intangible assets acquired in a business combination at their fair value at
the date of acquisition. Management judgement is required in deriving a number of assumptions which are used in
assessing the fair value of each acquisition intangible including the timing and amount of future incremental cash flows
expected to be generated by the asset and in calculating an appropriate cost of capital. Management judgement is also
required in assessing the useful economic lives of these assets for the purposes of amortisation.
Deferred income tax assets
Management judgement is required to determine the amount of deferred income tax assets that can be recognised,
based on the likely timing and level of future taxable profits. Details of the deferred income tax assets recognised in
respect of trading losses and share-based payments are given in Note 7.
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. Judgement is required in determining the most appropriate
valuation model and the most appropriate inputs into the model including the level of volatility and the expected life of
the option. Further information is given in Note 21.
Impairment of goodwill
The Group tests goodwill for impairment on an annual basis in line with the accounting policy noted above. This
involves judgement regarding the future development of the business and the estimation of the level of future
profitability and cash flows to support the carrying value of goodwill.
Impairment of other assets
The Group reviews the carrying value of all other assets for indications of impairment at each period end. If indicators
of impairment exist, the carrying value of the asset is subject to further testing to determine whether its carrying value
exceeds its recoverable amount. This process will usually involve the estimation of future cash flows which are likely to
be generated by the asset.
New accounting standards
There are no new standards or amendments to standards which are mandatory for the first time for the financial year
ended 30 April 2015 which had a significant impact on the Group. Of the new standards, amendments to standards
and interpretations which have been published but are not yet effective, only IFRS 15 “Revenue from contracts with
customers” is considered to be relevant to the Group. The directors are currently reviewing this new standard and the
effects, if any, of applying this standard to the financial statements of the Group have not yet been evaluated. IFRS
15 was issued in 2014 but has not yet been endorsed by the EU. It will be effective for the Group’s accounting period
commencing on 1 May 2018.
2
Revenue
The directors consider that the Group has a single business segment, being the sale of information management
software to highly regulated industries. The operations of the Group are managed centrally with group-wide functions
covering sales and marketing, development, professional services, customer support and finance and administration.
An analysis of revenue by product or service is given below.
Software licence sales
Maintenance and support
Professional services
Hardware and third party sales
2015
£’000
3,778
7,070
2,905
636
14,389
2014
£’000
1,939
4,445
1,954
632
8,970
Page 33
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
2
Revenue (continued)
An analysis of external revenue by location of customers and non-current assets by location of assets is given below:
United Kingdom
United States of America
Europe
Middle East
Rest of the World
Unallocated
External revenue by location
of customers
Non-current assets by location
of assets*
2015
£’000
9,435
1,628
1,437
858
1,031
-
2014
£’000
6,960
1,002
813
-
195
-
2015
£’000
2014
£’000
32,081
8,504
2
-
-
-
4
-
-
-
3,269
3,465
14,389
8,970
35,352
11,973
*Non-current assets exclude deferred tax assets.
No single customer accounted for more than 10% of total revenue in either year.
3
Operating costs
Wages and salaries
Operating lease charges – land & buildings
Loss on disposal of property, plant and equipment
Other operating costs
Depreciation and amortisation:
Amortisation of acquisition-related intangible assets
Amortisation of other intangible assets
Total amortisation of intangible assets
Depreciation of property, plant and equipment
Total depreciation and amortisation
Auditor’s remuneration
- The audit of the company’s annual accounts
- The audit of the company’s subsidiaries’ annual accounts
- Tax compliance and advisory services
- Other services – due diligence
Page 34
2015
£’000
6,044
194
-
2,239
8,477
2,090
257
2,347
156
2,503
12
67
25
-
2014
£’000
3,125
160
2
1,446
4,733
948
162
1,110
110
1,220
10
39
15
14
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
4
Particulars of employees
The average number of staff employed by the group during the year, analysed by category, was as follows:
Administrative staff
Sales and marketing
Technical and support
The aggregate payroll costs of these employees were as follows:
Wages and salaries
Social security costs
Other pension costs
Less: internal development costs capitalised
Share based payment costs (note 21)
on options granted
tax on options exercised
5
Finance income
Bank interest receivable
2015
Number
19
34
110
163
2015
£’000
6,200
690
95
(941)
6,044
142
134
6,320
2015
£’000
5
6
Directors’ remuneration and share options
The total remuneration of the directors (including fees) for the year was as follows:
Directors’ remuneration
Directors’ pension contributions
2015
£’000
466
-
466
2014
Number
11
17
44
72
2014
£’000
3,253
365
32
(525)
3,125
285
-
3,410
2014
£’000
10
2014
£’000
358
-
358
The remuneration of each of the directors of the company during the year ended 30 April 2015 was as follows:
David Hornsby
Graeme Spenceley
Jonathan Wearing
Alan Carroll
Les Paul (resigned 31 July 2014)
Salary or fees
£
Bonuses
£
150,000
96,000
10,000
18,327
12,000
286,327
130,000
50,000
-
-
-
180,000
Total
£
280,000
146,000
10,000
18,327
12,000
466,327
The bonuses for David Hornsby and Graeme Spenceley were in respect of the successful completion of the acquisition
and integration of Gael Ltd and EIBS Ltd during the year and on achieving certain business related targets.
Page 35
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
6
Directors’ remuneration and share options (continued)
The remuneration of each of the directors of the company during the year ended 30 April 2014 was as follows:
David Hornsby
Graeme Spenceley
Les Paul
Jonathan Wearing
Alan Carroll
Salary or fees
Bonuses
£
117,500
80,000
74,667
10,000
15,996
298,163
£
40,000
20,000
-
-
-
60,000
Total
£
157,500
100,000
74,667
10,000
15,996
358,163
The bonuses for David Hornsby and Graeme Spenceley were in respect of the successful completion of the acquisition
and integration of Pentana Ltd and MSS Management Systems Services Ltd during the year and on achieving certain
business related targets.
The remuneration of the highest paid director during the year ended 30 April 2015 was £280,000 (2014: £157,500).
None of the directors received or accrued any benefits under company pension schemes or received any benefits in
kind.
During the year ended 30 April 2015, David Hornsby exercised 2,800,000 options over the shares of the Company at
2.5 pence when the share price of the Company was 35 pence and Graeme Spenceley exercised 200,000 options over
the shares of the Company at 7 pence when the share price of the Company was 35 pence. Following his resignation
as a director, Les Paul exercised 333,333 options over the shares of the Company at 22.38 pence when the share
price of the Company was 32.38 pence. Mr Pauls’s remaining 666,667 options lapsed on leaving employment with the
Company.
The following options over shares in the Company granted to the directors remain outstanding at 30 April 2015:
Number of
outstanding
options at
30 April 2015
Exercise
price
(pence)
Number of
options
exercisable at
30 April 2015 Date granted
Date
exercisable by
Director
David Hornsby
1,333,333
9.0
1,333,333
20 October 2011
19 October 2021
David Hornsby
500,000
22.38
333,333
30 January 2013
29 January 2023
Graeme Spenceley
800,000
9.0
800,000
20 October 2011
19 October 2021
Graeme Spenceley
1,000,000
22.38
666,666
30 January 2013
29 January 2023
In addition to the options outstanding as at 30 April 2015 noted above, 1,000,000 options over the shares of the
Company with an exercise price of 1 penny each were granted to Graeme Spenceley on 22 July 2015 under the
Company’s Long Term Incentive Plan. These options are exercisable from 23 July 2016 subject to the following vesting
criteria: one half may be exercised on the Company’s share price reaching 51 pence for 20 consecutive business
days and the other half on the share price reaching 68 pence for 20 consecutive business days. These options are
exercisable by 22 July 2018.
No other share options were granted to the directors during the years ended 30 April 2015 or 30 April 2014. Further
information on share options is included at note 21 to the financial statements.
The contracts of employment of the executive directors include notice periods of 6 months.
Page 36
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
7
Taxation
The taxation expense recognised in the Statement of Comprehensive Income can be analysed as follows:
Current income tax
UK corporation tax on profit for the current year
Overseas income tax charge
Adjustments in respect of prior years
Deferred income tax
Deferred income tax (credit) for the current year
Total taxation expense recognised in the current year
2015
£’000
201
51
(92)
160
(32)
128
2014
£’000
403
20
(92)
331
(133)
198
The taxation expense for the year is higher than the standard rate of corporation tax in the UK of 21% (2014: 23%). The
differences are reconciled below:
Profit before taxation
Tax on profit at standard rate of 21% (2014: 23%)
Expenses not deductible for tax purposes
Depreciation in excess of capital allowances
Movement in fair value of contingent consideration not taxable
Charge to income statement from movement in deferred tax asset
Enhanced R&D tax relief
Effect of using future deferred tax rate of 20%
Effect on deferred tax from change in current tax rate
Different tax rates in overseas jurisdictions
Utilisation of brought forward trading losses
Tax deduction in income statement on exercise of share options
Adjustments recognised in current year tax in respect of prior years
Tax expense recognised for the current year
2015
£’000
608
128
114
8
39
236
(47)
7
5
(220)
(50)
(92)
128
2014
£’000
1,071
246
102
4
-
69
-
8
(4)
(27)
(108)
-
(92)
198
A further taxation credit of £294,000 in respect of share-based payment charges was reflected directly in equity
reserves during the year ended 30 April 2015.
The movements in recognised deferred income tax assets during the year were as follows:
Deferred income tax assets: Group
Trading losses
Share-based
payments
£’000
£’000
At 1 May 2013
Recognised in profit or loss
At 30 April 2014
On acquisition of businesses
Recognised in profit or loss
Recognised in equity
206
(69)
137
846
(293)
-
-
36
36
-
57
93
Total
£’000
206
(33)
173
846
(236)
93
At 30 April 2015
690
186
876
Page 37
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
7
Taxation (continued)
Deferred income tax assets: Group
Trading losses
At 1 May 2013
Recognised in profit or loss
At 30 April 2014
Recognised in profit or loss
Recognised in equity
At 30 April 2015
£’000
186
(49)
137
(36)
-
101
Share-based
payments
£’000
-
-
-
42
93
135
Total
£’000
186
(49)
137
6
93
236
The deferred income tax assets on trading losses and share-based payments have only been recognised to the extent
that it is considered probable that they can be recovered against future taxable profits based on profit forecasts for the
foreseeable future.
In addition to the recognised deferred income tax assets set out above, there are also unrecognised deferred income
tax assets in both the Group and the Company at 30 April 2015 of £207,000 (2014: £110,000) in respect of trading
losses and £nil (2014: £396,000) in respect of share-based payments.
The movements in deferred income tax liabilities during the year were as follows:
Group
Deferred tax
liability:
Intangibles
Deferred tax
liability: Other
temporary
differences
At 1 May 2013
Recognised in profit or loss
Foreign exchange differences
Recognised on business combinations
At 30 April 2014
Recognised in profit or loss
Recognised on business combinations
At 30 April 2015
£’000
(762)
133
-
(748)
(1,377)
268
(3,547)
(4,656)
£’000
(34)
33
1
-
-
-
-
-
Total
£’000
(796)
166
1
(748)
(1,377)
268
(3,547)
(4,656)
Factors that may affect future tax charges
Legislation to reduce the main rate of corporation tax from 21% to 20% from 1 April 2015 has been enacted and
hence the deferred tax balances in these accounts have been calculated at a rate of 20%.
8
Earnings per share
Basic earnings per share is computed by dividing the profit for the year attributable to equity holders of the parent by
the weighted-average number of ordinary shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit for the year attributable to equity holders of the parent
by the weighted-average number of ordinary shares outstanding during the year as adjusted for the effect of all
dilutive potential ordinary shares.
Page 38
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
8
Earnings per share (continued)
The following tables set out the computations for basic and diluted earnings per share:
Year ended 30 April 2015
Earnings
Basic EPS
Profit for the year attributable to equity holders of the parent
Effect of dilutive securities: share options
£’000
480
-
Weighted
average
number of
shares
138,783,359
4,285,025
Per-share
amount
pence
0.35
Diluted EPS
Profit for the year attributable to equity holders of the parent
480
143,068,384
0.34
Year ended 30 April 2014
Earnings
Basic EPS
Profit for the year attributable to equity holders of the parent
Effect of dilutive securities: share options
£’000
873
-
Weighted
average
number of
shares
121,823,670
6,445,784
Per-share
amount
pence
0.72
Diluted EPS
Profit for the year attributable to equity holders of the parent
873
128,269,454
0.68
In order to better demonstrate the performance of the Group, an adjusted earnings per share calculation has been
presented below which adds back or deducts items typically adjusted for by users of financial statements. The
calculations of the adjusted basic and diluted earnings per share amounts are based on the following information:
Profit for the year attributable to equity holders of the parent
Adjustments:
Costs of acquiring businesses
Share-based payment charges
Deferred taxation on share-based payment charges
Amortisation of acquisition-related intangibles (Note 3)
Deferred taxation on amortisation of acquisition-related intangibles
Movement in fair value of contingent consideration
Adjusted earnings
2015
£’000
480
450
276
(57)
2,090
(409)
188
3,018
2014
£’000
873
246
285
(36)
948
(179)
-
2,137
Weighted average number of shares: Basic adjusted EPS calculation
Effect of dilutive securities: share options
Weighted average number of shares: Diluted adjusted EPS calculation
138,783,359
4,285,025
143,068,384
121,823,670
6,445,784
128,269,454
Adjusted earnings per share:
Basic
Diluted
2015
pence
2.17
2.11
2014
pence
1.75
1.67
Page 39
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
9
Intangible assets
Group
Goodwill
Software
Cost
At 1 May 2013
Acquisition through
business combinations
Additions from internal
development
Disposals
£’000
3,419
939
-
-
Customer Development
costs
£’000
relationships
£’000
£’000
Customer
contract
£’000
Total
£’000
2,823
11,408
2,142
1,833
2,398
1,904
-
-
-
-
626
-
525
-
-
-
(2,823)
At 30 April 2014
4,358
3,975
4,302
1,151
Acquisition through
business combinations
Additions from internal t
developmen
6,915
7,787
9,947
-
-
-
-
941
At 30 April 2015
11,273
11,762
14,249
2,092
Amortisation
At 1 May 2013
Amortisation expense
Disposals
At 30 April 2014
Amortisation expense
At 30 April 2015
Net carrying amount
-
-
-
-
-
-
479
641
-
1,120
1,322
2,442
317
338
-
655
784
1,439
73
131
-
204
241
445
At 30 April 2015
At 30 April 2014
11,273
4,358
9,320
2,855
12,810
3,647
1,647
947
-
-
-
-
2,823
-
(2,823)
-
-
-
-
-
4,676
525
(2,823)
13,786
24,649
941
39,376
3,692
1,110
(2,823)
1,979
2,347
4,326
35,050
11,807
Goodwill
The carrying amount of goodwill has been allocated to the following Cash Generating Units (“CGUs”):
Gael / Ideagen Software / Pentana CGU
Plumtree / MSS / EIBS CGU
£’000
10,023
1,250
11,273
Page 40
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
9
Intangible assets (continued)
These goodwill amounts were tested for impairment at 30 April 2015 by comparing the carrying value of the
cash-generating unit with the recoverable amount. The recoverable amount was determined using a value in use
methodology based on discounted cash flow projections. The key assumptions used in the value in use calculations
were as follows:
The operating cash flows for these businesses for the year to 30 April 2016 are taken from the budget
(i)
approved by the Board which is closely linked with recent historical performance and current sales opportunities. The
operating cash flow budget is most sensitive to the level of new business sales;
(ii)
period;
No growth has been assumed in operating cash flows for the remainder of the value in use calculation
(iii)
A pre-tax discount rate of 11% has been used;
The use of cash flow projections over longer than a 5 year period is considered appropriate as the businesses
(iv)
of all of the CGUs have been operating for over 20 years, have strong and growing recurring revenue bases and the
Group continues to invest in the development of the products in each CGU.
Gael / Ideagen Software / Pentana CGU
On the basis of the above assumptions and using projection periods of 10 years, 15 years and in perpetuity, the
recoverable amount of the CGU, based on a value in use methodology, is estimated to exceed the carrying amount of
the CGU by the amounts shown in the table below. Future annual operating cash inflows, which are most sensitive to
the level of new business sales, would need to be consistently lower than the no-growth assumption used in the value
in use calculation by the percentages shown in the table below to reduce the recoverable amount of the CGU to below
the carrying amount. Based on the historic sales performance of the business and actions being taken to grow the
business further, the directors do not currently expect this reduced level of future annual operating cash flows to occur.
Amount by which recoverable amount of the CGU, based on
value in use, exceeds the carrying amount (£’000)
Projection period in value in use calculations
In perpetuity
15 years
10 years
11,004
5,913
934
Reduction in annual operating cash flows below the no-growth
assumption used in value in use calculations required to reduce
the recoverable amount of the CGU below the carrying amount
32%
21%
4%
Plumtree / MSS / EIBS CGU
On the basis of the above assumptions and using projection periods of 10 years, 15 years and in perpetuity, the
recoverable amount of the CGU, based on a value in use methodology, is estimated to exceed the carrying amount of
the CGU by the amounts shown in the table below. Future annual operating cash inflows, which are most sensitive to
the level of new business sales, would need to be consistently lower than the no-growth assumption used in the value
in use calculation by the percentages shown in the table below to reduce the recoverable amount of the CGU to below
the carrying amount. Based on the historic sales performance of the business and actions being taken to grow the
business further, the directors do not currently expect this reduced level of future annual operating cash flows to occur.
Amount by which recoverable amount of the CGU, based on
value in use, exceeds the carrying amount (£’000)
Reduction in annual operating cash flows below the no-growth
assumption used in value in use calculations required to reduce
the recoverable amount of the CGU below the carrying amount
Projection period in value in use calculations
In perpetuity
15 years
2,868
2,087
10 years
1,020
40%
35%
21%
Page 41
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
9
Intangible assets (continued)
Development costs
Development costs are internally generated. At 30 April 2015, the carrying amount of ongoing development projects
on which amortisation has not yet commenced was £707,000 (2014: £313,000). At 30 April 2015, the carrying amount
of completed development projects on which amortisation is being charged was £939,000 (2014: £634,000). The
weighted average remaining amortisation period of these assets at 30 April 2015 is 3.5 years (2014: 3.8 years).
The remaining amortisation periods and carrying amounts of the Group’s other intangible assets are as follows:
2015
Remaining
amortisation
period
(years)
2014
Remaining
amortisation
period
(years)
2015
2014
Carrying
amount
£’000
Carrying
amount
£’000
Ideagen Capture
Customer relationships
Software
Ideagen Software
Customer relationships
Software
Proquis
Customer relationships
Software
Plumtree
Customer relationships
Software
Ideagen plc
Software
Pentana
Customer relationships
Software
MSS
Customer relationships
Software
EIBS
Customer relationships
Software
Gael
Customer relationships
Software
5.2
-
5.9
0.9
6.7
1.6
7.6
2.6
-
8.5
3.5
8.2
3.2
9.2
4.2
9.7
4.7
6.2
1.0
6.9
1.9
7.7
2.6
8.6
3.6
0.5
9.5
4.5
9.2
4.2
-
-
-
-
250
-
249
25
274
185
828
610
-
1,331
896
285
363
919
593
8,675
6,649
299
4
291
53
315
301
937
858
15
1,486
1,148
320
478
-
-
-
-
Page 42
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
9
Intangible assets (continued)
Company
The intangible assets of the Company are as follows:
Cost
At 1 May 2013
Additions from internal development
At 30 April 2014
Additions from internal development
At 30 April 2015
Amortisation
At 1 May 2013
Amortisation expense
At 30 April 2014
Amortisation expense
At 30 April 2015
Net carrying amount
At 30 April 2015
At 30 April 2014
Software
£’000
Development
costs
£’000
Total
£’000
121
-
121
-
121
76
30
106
15
121
-
15
213
199
412
77
489
58
53
111
78
189
300
301
334
199
533
77
610
134
83
217
93
310
300
316
Page 43
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
10
Property, plant and equipment
Group
Fixtures
and
fittings
Office
equipment
Motor
vehicles
Leasehold
Loan
Total
improvements equipment
£’000
£’000
£’000
£’000
£’000
£’000
Cost
At 1 May 2013
Additions
Acquisition through
business combinations
Disposals
Foreign currency
exchange differences
At 30 April 2014
Additions
Acquisition through
business combinations
Disposals
Foreign currency
exchange differences
At 30 April 2015
Depreciation
At 1 May 2013
Depreciation expense
Disposals
Foreign currency
exchange differences
At 30 April 2014
Depreciation expense
Foreign currency
exchange differences
At 30 April 2015
Net carrying amount
At 30 April 2015
At 30 April 2014
62
1
2
-
-
65
2
7
-
-
248
46
33
-
(1)
326
92
96
-
-
74
514
32
15
-
-
47
18
-
65
9
18
166
57
-
(1)
222
97
1
320
194
104
-
-
-
-
-
-
-
95
(9)
-
86
-
-
-
-
-
6
-
6
80
-
26
10
4
-
(1)
39
-
5
-
1
72
8
-
(41)
-
408
65
39
(41)
(2)
39
469
4
-
-
-
98
203
(9)
1
45
43
762
4
14
-
-
18
21
-
39
6
21
7
24
(15)
-
16
14
-
30
209
110
(15)
(1)
303
156
1
460
13
302
23
166
Page 44
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
10
Property, plant and equipment (continued)
Company
Cost
At 1 May 2013
Additions
At 30 April 2014
Additions
At 30 April 2015
Accumulated depreciation
At 1 May 2013
Depreciation expense
At 30 April 2014
Depreciation expense
At 30 April 2015
Net carrying amount
As at 30 April 2015
As at 30 April 2014
Fixtures and
Fittings
£’000
Office
Equipment
£’000
Total
£’000
23
-
23
-
23
19
2
21
2
23
-
2
151
4
155
17
172
119
14
133
21
154
18
22
174
4
178
17
195
138
16
154
23
177
18
24
Page 45
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
11
Fixed asset investments
Company
Cost
As at 1 May 2013
Additions in the year
Transfers of shares to other group companies
Capital contributions to subsidiary companies
As at 30 April 2014
Additions in the year
Transfers of shares to other group companies
Capital contributions to subsidiary companies
As at 30 April 2015
Impairments
As at 1 May 2013 and 1 May 2014
Transfer of shares to other group companies
As at 30 April 2015
Net carrying amount
As at 30 April 2015
As at 30 April 2014
Shares in
subsidiaries
£’000
8,183
4,566
(1,595)
208
11,362
22,525
(8,545)
156
25,498
1,368
(1,368)
-
25,498
9,994
At 30 April 2015 the Company held 20% or more of the nominal value of any class of share capital of the companies
set out below. All of these companies are incorporated in England & Wales with the exception of Ideagen Gael Limited
and Gael Products Limited which are incorporated in Scotland and Ideagen Inc. which is incorporated in the United
States of America.
Page 46
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
11
Fixed asset investments (continued)
Name of subsidiary
Nature of business
Class of shares % held
Development and sale of software licences, Ordinary and ‘B’
software maintenance and related
professional services
Ordinary
Development and sale of software licences, Ordinary and ‘B’
software maintenance and related
professional services
Ordinary
100
100
Sale of software licences, software
maintenance and related professional
services
Dormant from 30 April 2015. Previously
engaged in the development and sale of
software licences, software maintenance and
related professional services
Dormant from 30 April 2015. Previously
engaged in the development and sale of
software licences, software maintenance and
related professional services
Dormant from 30 April 2015. Previously
engaged in the development and sale of
software licences, software maintenance and
related professional services
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
100
Ordinary
Ordinary
Ordinary
‘A’ Ordinary and
‘B’ Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
Ideagen Gael Limited (formerly Gael
Limited)
Ideagen Content Limited (formerly
Plumtree Group Limited)
Ideagen Inc. (formerly Pentana Inc.)
Ideagen Software Limited
Pentana Limited
EIBS Limited
MSS Management Systems Services
Limited
Ideagen Capture Limited
Proquis Limited
Filebutton Limited
Root3 Systems Limited
Ideagen Systems Limited
Gael Products Limited
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
12
Inventories
Group
Goods for resale
2015
£’000
55
2014
£’000
389
Page 47
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
13
Trade and other receivables
Group
Trade receivables
Prepayments and accrued income
Other receivables
Company
Trade receivables
Prepayments and accrued income
Amounts receivable from subsidiaries
Other receivables
2015
£’000
6,481
772
79
7,332
2015
£’000
1,179
203
4,316
30
5,728
2014
£’000
3,400
221
16
3,637
2014
£’000
698
14
680
16
1,408
All trade and other receivables have been reviewed for impairment. Unless specific agreement has been reached
with individual customers, sales invoices are due for payment either 30 or 60 days after the date of the invoice.
Where customers delay making payment, an assessment of the potential loss of customer goodwill arising from the
enforcement of contractual payment terms may take place when considering actions to be taken to secure payment.
Trade receivables include amounts that are past due at the reporting date for which no allowance for doubtful debts
has been recognised because these amounts are still considered to be recoverable. The group does not hold any
collateral or other credit enhancements over its trade receivable balances.
An analysis of trade receivables that are not yet overdue or past the due date but not impaired is set out below.
Group
Not yet overdue
1 – 30 days overdue
30 – 60 days overdue
60+ days overdue
Allowance for doubtful debts (all against debts 60+ days overdue)
Company
Not yet overdue
1 – 30 days overdue
30 – 60 days overdue
60+ days overdue
Allowance for doubtful debts (all against debts 60+ days overdue)
2015
£’000
2,939
1,582
504
1,672
6,697
(216)
6,481
2015
£’000
517
232
-
450
1,199
(20)
1,179
2014
£’000
2,098
829
128
396
3,451
(51)
3,400
2014
£’000
639
4
10
83
736
(38)
698
Page 48
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
13
Trade and other receivables (continued)
Trade receivables are shown net of an allowance for doubtful debts, movements on which are set out below.
Group
Balance at the start of the year
On acquisition of businesses
Impairment losses recognised
Amounts written off as uncollectable
Balance at the end of the year
Company
Balance at the start of the year
Impairment losses recognised
Amounts written off as uncollectable
Balance at the end of the year
14
Trade and other payables
Group
Trade payables
Other taxes and social security payables
Accruals
Other payables
Company
Trade payables
Other taxes and social security payables
Amounts payable to subsidiaries
Accruals
Other payables
2015
£’000
2014
£’000
51
124
92
(51)
216
2015
£’000
38
20
(38)
20
2015
£’000
942
1,494
848
192
3,476
2015
£’000
126
148
6
325
191
796
20
13
20
(2)
51
2014
£’000
18
20
-
38
2014
£’000
1,384
479
558
-
2,421
2014
£’000
145
94
772
199
-
1,210
Page 49
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
15
Contingent consideration on business combinations
Group and Company
Contingent consideration on the acquisition of MSS
Management Systems Services Limited
Contingent consideration on the acquisition of Pentana Limited
2015
£’000
2014
£’000
47
-
47
47
280
327
Part of the consideration for the acquisition of MSS Management Systems Services Limited in July 2013 was contingent
on the achievement of certain revenue targets in the period following acquisition to 30 April 2014. At the date of
acquisition, the directors assessed the fair value of the contingent consideration payable under this arrangement
at £47,000 although this has not yet been finally agreed with the vendor. The contingent consideration payable is
estimated to be between £40,000 and £60,000.
Movement in the fair value of contingent consideration in the year ended 30 April 2015
Part of the consideration for the acquisition of Pentana Limited in November 2013 was contingent on the achievement
of certain revenue targets in the 12 month period following the completion of the acquisition. At the date of acquisition,
the directors assessed the fair value of the contingent consideration payable under this arrangement at £280,000. The
contingent consideration payable was agreed during the year ended 30 April 2015 at a total of £468,000 resulting in a
loss of £188,000 which was included as a movement in the fair value of contingent consideration in the Statement of
Comprehensive Income for the year ended 30 April 2015.
16
Current income tax liabilities
Group
Current income tax liabilities
2015
£’000
44
44
2014
£’000
283
283
Page 50
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
17
Deferred consideration on business combinations
Group and Company
Current liabilities
Deferred consideration on the acquisition of Gael Limited
Deferred consideration on the acquisition of EIBS Limited
Deferred consideration on the acquisition of MSS Management
Systems Services Limited
Non-current liabilities
Deferred consideration on the acquisition of Gael Limited
2015
£’000
2014
£’000
1,613
15
-
1,628
1,613
1,613
-
-
50
50
-
-
The deferred consideration payable in respect of the acquisition of Gael Limited of £3,226,000 is not subject to any
performance criteria and is payable in two equal amounts of £1,613,000 in January 2016 and January 2017. The
deferred consideration in respect of the acquisition of MSS Management Systems Services Limited of £50,000 was paid
in July 2014.
18
Business combinations
Acquisition of Gael Limited
On 13 January 2015, the company acquired 100% of all classes of the issued ordinary share capital of Gael Limited, a
company incorporated and domiciled in Scotland, for £20.9million. The acquisition is expected to enhance the Group’s
existing business through increased scale, marketing strength and management expertise together with a strong entry
point into the transport sector and a significant recurring revenue stream.
The fair values of the identifiable assets acquired and liabilities recognised at the date of acquisition are summarised in
the table below.
Non-current assets
Customer relationships intangible
Software intangible
Property, plant and equipment
Deferred income tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Deferred revenue
Non-current liabilities
Deferred income taxation
Net identifiable assets acquired
The directors expect that all of the above receivables will be collected.
£’000
8,943
7,073
176
755
1,914
3,109
(1,245)
(3,143)
(3,203)
14,379
Page 51
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
The fair value of the consideration at the date of acquisition is as follows:
£’000
Cash paid at completion
Deferred consideration payable in cash in January 2016 (note 17)
Deferred consideration payable in cash in January 2017 (note 17)
Total consideration
17,699
1,613
1,613
20,925
Goodwill arising on the acquisition is as follows:
£’000
Fair value of consideration at date of acquisition
Less: fair value of net identifiable assets acquired
Goodwill arising on acquisition
20,925
(14,379)
6,546
Goodwill arose on the acquisition of Gael Limited as the consideration paid for the combination effectively included
amounts in relation to the benefit of revenue growth, expected synergies and the assembled workforce. These benefits
are not recognised separately from goodwill because they do not meet the criteria for recognition as identifiable
intangible assets. None of this goodwill is expected to be deductible for tax purposes.
The costs of the acquisition of £406,000 have been expensed within a separate line in the Group Statement of
Comprehensive Income for the year ended 30 April 2015. The Group Statement of Comprehensive Income for the
year ended 30 April 2015 includes revenue of £3,510,000 and profit after taxation, excluding amortisation of relevant
acquisition intangibles, of £1,014,000 in respect of the subsidiary acquired. Disclosure of information on revenue and
profit or loss for the combined entity as though the acquisition of Gael Limited had been completed on 1 May 2014
is impracticable as the accounting reference date of this company was previously 31 December and it did not prepare
comparable revenue and profit information on a monthly basis.
Net cash outflow on acquisition of Gael Limited:
£’000
Consideration paid in cash
Less: cash acquired in subsidiary
Net cash outflow on acquisition of subsidiary
17,699
(3,109)
14,590
Acquisition of EIBS Limited
On 24 June 2014, the company acquired 100% of the issued ordinary share capital of EIBS Limited, a company
incorporated and domiciled in England, for £1.6million. The acquisition is expected to enhance the Group’s existing
business through the addition of portal, internet and mobile intellectual property and increases the group’s customer
base in the NHS and in a number of regulated market sectors.
Page 52
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
The fair values of the identifiable assets acquired and liabilities recognised at the date of acquisition are summarised in
the table below.
Non-current assets
Customer relationships intangible
Software intangible
Property, plant and equipment
Deferred income tax asset
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Deferred revenue
Non-current liabilities
Deferred income taxation
Net identifiable assets acquired
£’000
1,004
714
26
91
288
296
(183)
(661)
(344)
1,231
The directors expect that all of the above receivables will be collected.
The fair value of the consideration at the date of acquisition is as follows:
£’000
Cash paid at completion
Deferred consideration payable in cash (note 17)
Total consideration
Goodwill arising on the acquisition is as follows:
Fair value of consideration at date of acquisition
Less: fair value of net identifiable assets acquired
Goodwill arising on acquisition
1,585
15
1,600
£’000
1,600
(1,231)
369
Goodwill arose on the acquisition of EIBS Limited as the consideration paid for the combination effectively included
amounts in relation to the benefit of revenue growth, expected synergies and the assembled workforce. These benefits
are not recognised separately from goodwill because they do not meet the criteria for recognition as identifiable
intangible assets. None of this goodwill is expected to be deductible for tax purposes.
The costs of the acquisition of £40,000 have been expensed within a separate line in the Group Statement of
Comprehensive Income for the year ended 30 April 2015. The Group Statement of Comprehensive Income for the year
ended 30 April 2015 includes revenue of £1,534,000 and profit after taxation of £181,000 in respect of the subsidiary
acquired. Disclosure of information on revenue and profit or loss for the combined entity as though the acquisition of
EIBS Limited had been completed on 1 May 2014 is impracticable as the accounting reference date of this company
was previously 31 July and it did not prepare comparable revenue and profit information on a monthly basis.
Net cash outflow on acquisition of EIBS Limited:
£’000
Consideration paid in cash
Less: cash acquired in subsidiary
Net cash outflow on acquisition of subsidiary
1,585
(296)
1,289
Page 53
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
Business combinations completed in the year ended 30 April 2014
Acquisition of MSS Management Systems Services Limited
On 2 July 2013, the company acquired 100% of the issued ordinary share capital of MSS Management Systems Services
Limited, a company domiciled in England, for a total consideration of £862,000. The acquisition is expected to enhance
the Group’s existing business through the addition of intellectual property which supports Emergency Departments
within NHS hospital trusts and a recurring revenue stream derived from a number of NHS customers.
The fair values of the identifiable assets acquired and liabilities recognised at the date of acquisition are summarised in
the table below.
Non-current assets
Customer relationships intangible
Software intangible
Current assets
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Deferred revenue
Current income tax
Non-current liabilities
Deferred income taxation
Net identifiable assets acquired
£’000
349
573
1
176
(68)
(150)
(26)
(184)
671
The directors expect that all of the above receivables will be collected.
The fair value of the consideration at the date of acquisition is as follows:
£’000
Cash paid at completion
Deferred consideration payable in cash 12 months after the date of acquisition (note 17)
Contingent consideration payable in cash (note 15)
Total consideration
765
50
47
862
The Share Purchase Agreement in respect of the acquisition of MSS Management Systems Services Limited provided
for the possibility of contingent consideration of up to a maximum amount of £542,000. This further consideration was
contingent upon the level of future revenue generated by MSS Management Systems Services Limited between the
completion of the acquisition and 30 April 2014. At the date of the acquisition, the directors assessed the fair value of
the contingent consideration payable at £47,000 (see note 15). The actual amount of contingent consideration payable
has not yet been finally determined and agreed with the vendor.
Page 54
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
Goodwill arising on the acquisition is as follows:
£’000
Fair value of consideration at date of acquisition
Less: fair value of net identifiable assets acquired
Goodwill arising on acquisition
862
(671)
191
Goodwill arose on the acquisition of MSS Management Systems Services Limited as the consideration paid for the
combination effectively included amounts in relation to the benefit of revenue growth, expected synergies and the
assembled workforce. These benefits are not recognised separately from goodwill because they do not meet the
criteria for recognition as identifiable intangible assets. None of this goodwill is expected to be deductible for tax
purposes.
The costs of the acquisition of £62,000 have been expensed within a separate line in the Group Statement of
Comprehensive Income for the year ended 30 April 2014. The Group Statement of Comprehensive Income for the
year ended 30 April 2014 includes revenue of £511,000 and profit after taxation, excluding amortisation of relevant
acquisition intangibles, of £233,000 in respect of the subsidiary acquired. Disclosure of information on revenue and
profit or loss for the combined entity as though the acquisition of MSS Management Systems Services Limited had
been completed on 1 May 2013 is impracticable as the accounting reference date of this company was previously 31
March and it did not prepare comparable revenue and profit information on a monthly basis.
Net cash outflow on acquisition of MSS Management Systems Services Limited:
£’000
Consideration paid in cash
Less: cash acquired in subsidiary
Net cash outflow on acquisition of subsidiary
765
(176)
589
Acquisition of Pentana Limited
On 19 November 2013, the company acquired 100% of the issued ordinary share capital of Pentana Limited, a
company domiciled in England, together with its wholly owned subsidiary, Pentana Inc. which is domiciled in the
United States of America, for a total consideration of £3.7 million. The acquisition of Pentana Limited is expected to
enhance the Group’s existing business through the addition of intellectual property in the area of Governance, Risk
and Compliance providing the Group with an entry point into the financial services sector and the outsourced risk and
compliance market together with a significant recurring revenue stream.
Page 55
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
The fair values of the identifiable assets acquired and liabilities recognised at the date of acquisition are summarised in
the table below.
Non-current assets
Customer relationships intangible
Software intangible
Property plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Current income tax recoverable
Current liabilities
Trade and other payables
Deferred revenue
Non-current liabilities
Deferred tax
Net identifiable assets acquired
£’000
1,555
1,260
39
531
1,170
101
(271)
(865)
(563)
2,957
The directors expect that all of the above receivables will be collected.
The fair value of the consideration at the date of acquisition is as follows:
£’000
Cash paid at completion
Contingent consideration payable in cash (note 15)
Total consideration
3,425
280
3,705
The Share Purchase Agreement in respect of the acquisition of Pentana Limited provided for the possibility of
contingent consideration of up to a maximum amount of £800,000. This further consideration was contingent upon
the achievement of certain revenue targets by Pentana Limited in the 12 months following the completion of the
acquisition. At the date of the acquisition, the directors assessed the fair value of the contingent consideration payable
at £280,000. The contingent consideration payable was later agreed during the year ended 30 April 2015 at a total of
£468,000 (see note 15).
Goodwill arising on the acquisition is as follows:
£’000
Fair value of consideration at date of acquisition
Less: fair value of net identifiable assets acquired
Goodwill arising on acquisition
3,705
(2,957)
748
Goodwill arose on the acquisition of Pentana Limited as the consideration paid for the combination effectively
included amounts in relation to the benefit of revenue growth, expected synergies and the assembled workforce of
Pentana Limited. These benefits are not recognised separately from goodwill because they do not meet the criteria for
recognition as identifiable intangible assets. None of this goodwill is expected to be deductible for tax purposes.
Page 56
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
18
Business combinations (continued)
The costs of the acquisition of £184,000 have been expensed within a separate line in the Group Statement of
Comprehensive Income for the year ended 30 April 2014. The Group Statement of Comprehensive Income for the year
ended 30 April 2014 includes revenue of £1,506,000 and profit after taxation, excluding amortisation of acquisition
intangibles, of £342,000 in respect of the subsidiaries acquired. Disclosure of information on revenue and profit or
loss for the combined entity as though the acquisition of Pentana Limited had been completed on 1 May 2013 is
impracticable as the accounting reference date for Pentana was previously 31 December and it did not prepare
comparable revenue and profit information on a monthly basis.
Net cash outflow on acquisition of Pentana Limited:
Consideration paid in cash
Less: cash acquired in subsidiary
Net cash outflow on acquisition of subsidiary
19
Equity share capital, share premium and other reserves
Group and Company
2015
£’000
Issued and fully paid share capital:
177,341,678 ordinary shares of £0.01 each (2014: 121,890,656 shares)
1,773
Share premium
23,443
Shares issued in the year ended 30 April 2015
£’000
3,425
(1,170)
2,255
2014
£’000
1,219
6,870
On 15 May 2014, 500,000 ordinary shares were issued at 2.5 pence per share on the exercise of share options. On 2
June 2014, 129,100 ordinary shares were issued at 28 pence per share on the exercise of share options. On 1 August
2014, 333,333 ordinary shares were issued at 22.38 pence per share on the exercise of share options.
In January 2015, a total of 51,470,589 ordinary shares were issued in three tranches under a share placing at 34 pence
per share. The first tranche of 1,975,631 shares was issued on 7 January 2015 and the second and third tranches
of 12,730,251 and 36,764,707 shares respectively were issued separately on 8 January 2015. Share premium of
£16,985,000 arose on the three tranches of shares issued under the share placing.
On 24 February 2015, 18,000 ordinary shares were issued at 20 pence per share on the exercise of share options.
On 17 April 2015, 2,800,000 ordinary shares were issued at 2.5 pence per share and a further 200,000 ordinary shares
were issued at 7 pence per share on the exercise of share options.
The total share issue costs during the year ended 30 April 2015 of £584,000 have been deducted from the share
premium account.
Details of outstanding options over the shares of the Company are provided in note 21.
Shares issued in the year ended 30 April 2014
On 11 October 2013, 150,000 ordinary shares were issued at 2.5 pence per share on the exercise of share options.
Page 57
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
19
Equity share capital, share premium and other reserves (continued)
Merger reserve
Group
Company
2015
£’000
1,167
1,218
2014
£’000
1,167
1,218
The merger reserve is in respect of the premium arising on shares issued as part of the consideration on business
combinations completed in previous years.
Retained earnings
Retained earnings of both the Group and the Company include an amount of £1,336,000 which does not represent a
realised profit and is not distributable.
20
Dividends
A final dividend in respect of the year ended 30 April 2014 of 0.1 pence per ordinary share was paid to shareholders on
12 November 2014. The total cost of this dividend was £123,000.
An interim dividend in respect of the year ended 30 April 2015 of 0.055 pence per ordinary share (2014: 0.05 pence)
was paid to shareholders on 11 March 2015. The total cost of this dividend was £96,000 (2014: £61,000).
The directors have proposed the payment of a final dividend of 0.11 pence per ordinary share (2014: 0.1 pence) on 12
November 2015 subject to approval by shareholders at the forthcoming Annual General Meeting. The total estimated
cost of this dividend is £196,000.
21
Share-based payments and share options
The company operates an Enterprise Management Incentive share option Scheme which permits the grant to directors
and staff of options in respect of ordinary shares in the company. Some of the options granted under this scheme do
not have the tax benefits normally associated with Enterprise Management Incentive options however these options
are identical in all other respects. The Scheme is an equity-settled arrangement and options granted under the scheme
have a maximum life of 10 years from the date of grant. Options are capable of being exercised in stages. One third
can be exercised one year after grant date, a further third can be exercised two years after grant date and all options
are capable of being exercised three years from the grant date. There are no other vesting conditions except to note
that the options will lapse on leaving employment with the company.
Page 58
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
21
Share-based payments and share options (continued)
The following is a summary of the share options outstanding under the Enterprise Management Incentive Scheme.
Year ended 30 April 2015
Outstanding at 1 May 2014
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at 30 April 2015
Exercisable as at 30 April 2015
Number of
options
11,604,333
2,908,000
(3,851,333)
(666,667)
9,994,333
5,586,333
Weighted average
exercise price
(pence)
12.3
35.1
4.5
22.38
21.2
13.7
Of the options outstanding at 30 April 2015, 18,000 options have an exercise price of 20 pence, 25,000 options have an
exercise price of 2.5 pence, 1,410,000 options have an exercise price of 8.5 pence, 2,133,333 options have an exercise
price of 9 pence, 3,500,000 options have an exercise price of 22.38 pence, 1,330,000 options have an exercise price of
32.12 pence and 1,578,000 options have an exercise price of 37.63 pence.
During the year, 1,330,000 options were granted at 32.12 pence and 1,578,000 options were granted at 37.63 pence.
The fair values of the options granted during the year were estimated at the date of grant using the Black-Scholes
option pricing model. The inputs to the option pricing model are summarised below.
Share price at grant date
Exercise price
Expected volatility
Expected dividend yield
Expected option life
Risk-free interest rate
Fair value of option
1,330,000 options at
32.12 pence
1,578,000 options at
37.63 pence
32.12 pence
32.12 pence
42%
0.4%
5 years
1.87%
37.63 pence
37.63 pence
42%
0.4%
5 years
1.02%
12.12 pence
13.69 pence
Future share price volatility has been estimated by using historic share price volatility over the most recent period
commensurate with the expected life of the option.
The fair value of the options exercised during the year at the date the options were granted and the price of Ideagen
plc ordinary shares on the date of exercise were as follows.
Number of
options exercised
Exercise price
500,000
333,333
18,000
2,800,000
200,000
3,851,333
(pence)
2.50
22.38
20.00
2.50
7.00
Ideagen plc share price
on date of exercise
(pence)
Fair value per option
at date of grant
(pence)
41.12
32.38
37.25
35.00
35.00
1.28
11.80
0.00
1.28
1.28
Page 59
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
21
Share-based payments and share options (continued)
During the year, 666,667 options lapsed. These options had an exercise price of 22.38 pence and a fair value at grant
date of 11.8 pence per option.
The total fair value of the options exercised during the year at the date the options were granted was £85,000. This
amount was transferred from the share-based payment reserve to retained earnings during the year.
The weighted average remaining contractual life of the options outstanding at 30 April 2015 was 7.7 years.
During the year ended 30 April 2015 the group recognised a total charge of £276,000 in the Consolidated Statement of
Comprehensive Income in relation to its equity-settled share option scheme. Of this, £142,000 related to share options
granted and £134,000 related to share options exercised. The charges relating to share options granted have been
credited to a share-based payment reserve within equity. The balance on this reserve at 30 April 2015 amounted to
£653,000.
Year ended 30 April 2014
Outstanding at 1 May 2013
Exercised during the year
Outstanding at 30 April 2014
Exercisable as at 30 April 2014
Number of
options
11,754,333
(150,000)
11,604,333
7,893,222
Weighted average
exercise price
12.1 pence
2.5 pence
12.3 pence
8.7 pence
Of the options outstanding at 30 April 2014, 36,000 options have an exercise price of 20 pence, 3,325,000 options have
an exercise price of 2.5 pence, 200,000 options have an exercise price of 7 pence, 1,410,000 options have an exercise
price of 8.5 pence, 2,133,333 options have an exercise price of 9 pence and 4,500,000 options have an exercise price of
22.38 pence.
The price of Ideagen plc ordinary shares at the date of exercise of the options noted above was 22.75 pence. The fair
value of the options exercised during the year at the date the options were granted was 1.28 pence per share. The total
fair value of the options exercised during the year at the date the options were granted was £1,920. This amount was
transferred from the share-based payment reserve to retained earnings during the year.
The weighted average remaining contractual life of the outstanding options at 30 April 2014 was 7.3 years.
During the year ended 30 April 2014 the group recognised expenses of £285,000 in the Statement of Comprehensive
Income in relation to its equity-settled share option scheme. These option charges have been credited to a share-
based payment reserve within equity. The balance on this reserve at 30 April 2014 amounted to £596,000.
Other outstanding share options
In addition to the options granted under the terms of the Enterprise Management Incentive share option scheme
disclosed above, a total of 297,850 further options were granted by the company in 2005 and 2006 and remained
outstanding at 30 April 2014. Of the total outstanding at 30 April 2014, 129,100 options were exercised at an exercise
price of 28 pence during the year ended 30 April 2015 when the price of Ideagen plc ordinary shares was 40 pence per
share.
At 30 April 2015, 168,750 options remain outstanding of which 88,750 options are exercisable at any time prior to 21
November 2015 at 20 pence and 80,000 options are exercisable at any time prior to 25 October 2016 at 10 pence.
Page 60
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
22
Capital management
The group’s objective when managing capital is to safeguard the group’s ability to continue as a going concern so that
it can continue to provide a return to shareholders and benefits for other stakeholders.
The capital monitored by the group consists of all components of equity attributable to owners of the parent as set out
in the Group Statement of Changes in Equity other than the foreign currency translation reserve, any long or short term
borrowings, contingent and deferred liabilities arising from business combinations disclosed in Notes 15 and 17 and
cash and cash equivalents.
The group currently maintains a capital structure which is appropriate for its needs principally through a combination
of cash flow management and forecasting and the issue of new shares, primarily in connection with the funding of
business acquisitions. The group does not currently have any short or long term borrowings.
The group is not subject to externally imposed capital requirements other than the minimum capital requirements
imposed by the Companies Act 2006 on all public limited companies.
23
Operating lease commitments
As at 30 April 2015 the group had aggregate commitments under non-cancellable operating leases which expire as
follows:
Within one year
Between one and two years
Between two and five years
24
Pension schemes
Land & Buildings Land & Buildings
2015
£’000
40
63
461
564
2014
£’000
46
122
-
168
The group operates several defined contribution pension schemes for certain employees. The pension cost charge
for the year represents contributions payable by the group into both these schemes and into individual pension
arrangements in respect of certain employees on a defined contribution basis and amounted to £95,000
(2014: £32,000).
25
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of
outstanding overdrafts as follows.
Group
Cash and bank balances
Company
Cash and bank balances
2015
£’000
5,266
2014
£’000
4,011
2015
£’000
2014
£’000
1,409
1,816
Page 61
Ideagen plc
Notes to the Consolidated Financial Statements for the year ended 30 April 2015
26
Related party transactions
Ideagen plc is the parent company of the group. There was no overall control of Ideagen plc.
Balances and transactions between the Company and its wholly owned subsidiaries, which are related parties of the
Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between
the Company and other related parties are disclosed below.
Trade payables in the Company at 30 April 2015 included £nil (2014: £28,487) payable to Glacier Software Limited, a
company controlled by Mr D R K Hornsby. This was in respect of a balance of fees for Mr D R K Hornsby as a director
of the Company earned between 2009 and 2011.
At 30 April 2015, trade and other payables in the Company included £3,998 (2014: £3,627) payable to Ultris Limited, a
company in which Mr A M Carroll is a director and major shareholder. This amount is in respect of fees payable to Mr
A M Carroll as a director of the Company. The amounts payable to Ultris Limited for the services of Mr A M Carroll as a
director of the Company are included in the remuneration of directors disclosed in note 6.
Other creditors in the Company at 30 April 2015 included £73,087 and £3,217 payable to Mr D R K Hornsby and Mr
G P Spenceley respectively. These amounts relate to outstanding balances payable by the Company from the sale of
Ideagen plc shares through the Company in order to fund the tax liabilities of these individuals associated with the
exercise of HMRC-unapproved Ideagen share options. Mr Hornsby and Mr Spenceley are directors of the Company.
For the purposes of this note there are not considered to be any key management personnel other than the directors
of the Company. The remuneration of the directors of the company is disclosed in note 6 of these financial statements.
27
Events after the end of the reporting period
Issues of ordinary shares
In order to satisfy the exercise of share options, the company issued 470,000 shares at 8.5 pence each on 6 May 2015
and 18,000 shares at 20 pence on 7 August 2015.
Page 62
Ideagen Plc
Ergo House, Mere Way, Ruddington Fields Business Park, Ruddington, Nottinghamshire, NG11 6JS
Tel: +44 (0) 1629 699100 Email: info@ideagenplc.com
www.ideagenplc.com