Basic HTML Version
Escher Group Holdings plc
Annual report 2011
10
Revenue
Total revenue for the year ended
31 December 2011 was US$13.9 million,
a decrease of US$0.1 million from
the revenue of US$14 million in the
prior year. Within total revenue there
was an increase of US$339,000 or
11% in software development and
consulting services, a decrease of
US$388,000 or 14% in licenses with
maintenance and support being
broadly in line with the prior year.
The main drivers behind the
software development and
consulting services revenue
increase was the provisioning
of services to a new customer,
and increased service provisioning
for existing customers.
US$136,000 of the decrease
in license revenue from the year
ended 31 December 2010 to the
year ended 31 December 2011
was due to amortising time based
licenses, the balance of the decrease
was due to the structure of the
contracts signed in 2011.
Profit before exceptional items
and unusual costs
Included in operating profit are
proof of concept costs and the
costs in relation to the development
of Near Field Communications (NFC)
of US$1.1 million, which although not
exceptional in nature, are unusual
in that such large scale projects are
not regularly undertaken by Escher
and differ from exceptional costs,
which are considered to be
significant non-recurring costs.
These unusual costs include:
——US$708,000 to create a proof
of concept for a contract that
was awarded to Escher in Q1 2012;
——US$158,000 to create a proof
of concept for a large potential
postal authority contract;
——US$125,000 to create a proof
of concept for a message based
communication software
contract; and
——US$133,000 for developing a new
division towards NFC capabilities.
Exceptional costs
Exceptional costs of US$0.8 million
relate to professional fees and other
related expenses on the fundraising
activities which occurred in 2011. These
are non-recurring one‑off expenses.
Net finance costs
Net finance costs decreased by
US$0.5 million from the year ended
31 December 2010 to the same
period in 2011. Interest on debentures
accounted for US$0.3 million of this
decrease due to a US$5.6 million
partial repayment made in August
2011 and a reduction in the interest
rate from 16% to 5.1%. The balance
of the decrease was mainly due to
the decrease in the fair value of the
derivatives during the year. As part
of the refinancing which occurred on
5 January 2012 both the debenture
and the derivatives were repaid.
Profit for the year
The profit for the year after exceptional
items is US$0.6 million. Excluding
— Revenue for the year
of US$13.9m
— US$0.1m invested
in NFC products
— Net finance costs
decreased by US$0.5m
— Profit for the year before
exceptional items and
unusual costs of US$2.3m
— Basic EPS before
exceptional items
of US$12.7c
— Development costs to
create Proof of Concept
of US$991,000
In summary
Trevor McIntyre,
Finance Director
Financial review