Financial statements
Notes 1 - 5
- 1. General information
- 2. Accounting policies
- 3. Critical accounting judgements & key sources of estimation uncertainty
- 4. Segmental analysis
- 5. Group operating costs
4. Segmental Analysis
| Revenue | Operating margin | EBITDA | ||||||
|---|---|---|---|---|---|---|---|---|
| 2008 £’000 |
2007 £’000 |
2008 £’000 |
2007 £’000 |
2008 £’000 |
2007 £’000 |
|||
| Before exceptional items | ||||||||
| Integration & Managed Services | 278,431 | 270,959 | 54,435 | 59,852 | 8,649 | 19,030 | ||
| Telecoms & Internet Services | 244,356 | 222,667 | 143,324 | 133,066 | 62,849 | 58,421 | ||
| Information Services | 14,132 | 13,630 | 7,605 | 7,322 | 4,065 | 3,684 | ||
| Other1 | (19,622) | (24,136) | (1,920) | (19,532) | (6,263) | (10,163) | ||
| Continuing activities before exceptional items | 517,297 | 483,120 | 203,444 | 180,708 | 69,300 | 70,972 | ||
| Exceptional items | ||||||||
| Integration & Managed Services | – | – | – | – | (2,532) | (57) | ||
| Telecoms & Internet Services | – | – | – | – | (549) | (1,781) | ||
| Information Services | – | – | – | – | (201) | (91) | ||
| Other1 | – | – | – | – | (706) | (5,897) | ||
| Total (Note 7) | – | – | – | – | (3,988) | (7,826) | ||
| Continuing activities | 517,297 | 483,120 | 203,444 | 180,708 | 65,312 | 63,146 | ||
| Discontinued activities | – | 75 | – | 45 | – | (36) | ||
| Total | 517,297 | 483,195 | 203,444 | 180,753 | 65,312 | 63,110 | ||
1Other includes head office costs, shared services and eliminations
| Notes | 2008 £’000 |
2007 £’000 |
|
|---|---|---|---|
| Depreciation | |||
| Integration & Managed Services | 6,715 | 9,263 | |
| Telecoms & Internet Services | 15,063 | 13,735 | |
| Information Services | 452 | 502 | |
| Other2 | 1,793 | 692 | |
| Total | 24,023 | 24,192 | |
| Amortisation | |||
| Integration & Managed Services | 11,416 | 7,734 | |
| Telecoms & Internet Services | 10,524 | 5,828 | |
| Information Services | 84 | 100 | |
| Other2 | 1,592 | 1,715 | |
| Group total – before exceptional items | 23,616 | 15,377 | |
| Profit/(loss) from operations | |||
| Integration & Managed Services | (9,482) | 2,033 | |
| Telecoms & Internet Services | 37,262 | 38,858 | |
| Information Services | 3,529 | 3,082 | |
| Total – continuing activities | |||
| before exceptional items | 31,309 | 43,973 | |
| Exceptional items | |||
| Integration & Managed Services | (2,532) | (57) | |
| Telecoms & Internet Services | (549) | (1,781) | |
| Information Services | (201) | (91) | |
| Other2 | (706) | (5,897) | |
| 7 | (3,988) | (7,826) | |
| Total – continuing activities | 27,321 | 36,147 | |
| Head office and other unallocated costs | (9,648) | (12,570) | |
| Group profit from operations | 32 | 17,673 | 23,577 |
| Share of profit of associate | 17 | 12 | |
| Profit from continuing operations | 17,690 | 23,589 | |
| Total – discontinued activities | – | (578) | |
| Group profit from operations | 17,690 | 23,011 |
| 2008 £’000 |
2007 £’000 |
|
|---|---|---|
| Assets | ||
| Integration & Managed Services | 261,450 | 257,433 |
| Telecoms & Internet Services | 212,631 | 207,364 |
| Information Services | 5,867 | 5,643 |
| Other3 | 1,637 | 346 |
| Unallocated assets | 71,479 | 57,159 |
| Total assets | 553,064 | 527,945 |
| Liabilities | ||
| Integration & Managed Services | 65,324 | 51,229 |
| Telecoms & Internet Services | 73,022 | 74,392 |
| Information Services | 3,685 | 3,949 |
| Other3 | 26,158 | 25,097 |
| Unallocated liabilities | 200,190 | 195,677 |
| Total liabilities | 368,379 | 350,344 |
| Capital expenditure on property, plant and equipment, development costs and software |
||
| Integration & Managed Services | 3,717 | 4,851 |
| Telecoms & Internet Services | 24,936 | 25,714 |
| Information Services | 143 | 299 |
| Other3 | 1,495 | 2,198 |
| Total – continuing operations | 30,291 | 33,062 |
| Discontinued operations | – | – |
| Group total | 30,291 | 33,062 |
Unallocated assets and liabilities include fixed asset investments, corporation taxes, cash and cash equivalents, deferred taxation, finance lease liabilities and borrowings.
2Other includes head office costs, shared services and eliminations
3Other includes head office costs and shared services
The split of total revenue between external customers and inter-segment revenue is as follows:
| 2008 £’000 |
2007 £’000 |
|
|---|---|---|
| Revenue from external customers | ||
| Integration & Managed Services | 277,611 | 270,863 |
| Telecoms & Internet Services | 226,798 | 200,737 |
| Information Services | 12,220 | 11,472 |
| Other2 | 668 | 48 |
| Total - continuing activities | 517,297 | 483,120 |
| Discontinued operations | – | 75 |
| Total | 517,297 | 483,195 |
| Inter-segment revenue | ||
| Integration & Managed Services | 820 | 96 |
| Telecoms & Internet Services | 16,935 | 21,929 |
| Information Services | 1,913 | 2,158 |
| Other2 | (19,668) | (24,183) |
| Total | – | – |
| Group total | 517,297 | 483,195 |
Inter-segment sales are charged at prevailing market prices.
None of the revenue, operating profit or net operating assets arising outside the United Kingdom are material to the Group. The geographical analysis of revenue by destination is given below:
| 2008 £’000 |
2007 £’000 |
|
|---|---|---|
| Geographical analysis of revenue | ||
| United Kingdom | 512,884 | 468,288 |
| Europe | 3,885 | 12,946 |
| Other | 528 | 1,961 |
| Total | 517,297 | 483,195 |
The analysis of the Group’s revenue between sale of goods and services is as follows:
| 2008 £’000 |
2007 £’000 |
|
|---|---|---|
| Continuing operations | ||
| Sale of goods | 81,138 | 83,718 |
| Provision of services | 436,159 | 399,402 |
| Total – continuing operations | 517,297 | 483,120 |
| Discontinued operations | ||
| Sale of goods and services | – | 75 |
| Group total | 517,297 | 483,195 |
With effect from 1 April 2007, the Group has carried out an operational reorganisation of the business in order to align the reported activities of each business segment with the markets which they serve. As a result, the segmental analysis for 2007 has been re-stated to reflect this re-organisation.