Blinkx Plc BLNX Half Yearly Report

  Blinkx Plc (BLNX) - Half Yearly Report

RNS Number : 0537R
Blinkx Plc
14 November 2012




14 November 2012

                                      

            BLINKX PLC ANNOUNCES RESULTS FOR THE SIX MONTHS ENDED

                              30 SEPTEMBER 2012

                                      

    Reports record results for first half, revenues up 84% to $82.0m, with
                  adjusted* profits before taxation of $8.4m



blinkx's interim period conference call will be webcast live at www.blinkx.com
                                      on

       14 November, 2012, at 9:30 a.m. GMT/4:30 a.m. EST/1:30 a.m. PST



London, England and San Francisco, CA - 14 November 2012 - blinkx PLC
(BLNX.L), the world's largest video search engine, today reported financial
results for the six months ended 30 September 2012.



Financial Highlights

                                    Six months to  Six months to
                                     30 September   30 September
                                             2012           2011
                                      (unaudited)    (unaudited)
                                             $000           $000
Revenues                                   81,971         44,569
Profit from operations - adjusted*          7,855          4,892
Profit from operations                      1,966          1,421
Profit before taxation - adjusted*          8,370          4,953
Profit before taxation                      2,481          1,482
Earnings per share                          Cents          Cents
Basic - adjusted*                            2.38           1.64
Basic                                        0.75           0.63
Diluted - adjusted*                          2.34           1.60
Diluted                                      0.74           0.62



*Adjusted for acquisition costs of $1.4m (2011:$1.9m), exceptional charges of
$1.8m and amortization of purchased intangibles of $2.6m (2011: $1.6m)



Business Highlights

· Revenues increased by 84% to $82.0m, from $44.6m in H1 2012

· Adjusted* profit from operations increased by 61% to $7.9m compared with
$4.9m for H1 2012

· Adjusted* profit before tax of $8.4m, compared with $5.0m for H1 2012

· Cash balance was $41.6m up from $38.4m on 31 March 2012

· Sales and product integrations of Burst and PVMG acquisitions are ahead of
schedule

· Introduced next generation blinkx.com, designed to enhance video discovery
and viewing, optimized for mobile use, with powerful personalization
capabilities and social graph integration

· Established new distribution agreements with Sony and Popbox in the
Connected TV space

· Secured content partnerships including Kiplinger, Hulu, and Fox Sports

· Added new brand advertising clients including Google, Asda and Gillette





Commenting on the period, S. Brian Mukherjee, CEO of blinkx, said today: "This
has been  an exceptional  first half  for blinkx.  The business  demonstrated 
strong underlying  growth,  which  was accelerated  by  the  ahead-of-schedule 
integration of Burst and PVMG. The progress of this integration enabled us to
serve a  greater number  of  high value  ads to  a  wider audience  at  robust 
monetization rates.



During the  period,  we  also  benefitted  from  increased  advertising  spend 
allocated to specific  events - the  summer Olympics and  the US  presidential 
elections. These  one-time events  provided  us with  a  better-than-expected 
boost to revenues during the traditionally slower summer months.



We have continued  to build  on our leadership  position in  the online  video 
ecosystem over  the past  six months,  increasing our  audience reach  through 
distribution deals with Sony and Popbox, while adding premium content partners
including Kiplinger, Hulu and Fox Sports. This compelling combination of  top 
tier professional  content  and broad  distribution  with our  patented  video 
advertising platform attracted new and repeat marquee brand advertisers,  such 
as Microsoft, Volkswagen and Colgate.



This half, we were also  proud to unveil the  next generation of our  flagship 
video search and discovery site, blinkx.com.  With an eye to the  flourishing 
mobile market, the new site was built from the ground up for use on  connected 
devices, with a  simple, elegant user  interface that is  optimized for  video 
discovery and viewing, and offers easy integration with social networks across
desktop, tablet and mobile devices."



Outlook



Commenting on current trading, Mr Mukherjee added: "There are powerful secular
trends driving the growth of video advertising: the proliferation of broadband
and connected devices, and the accelerating migration and consumption of video
online. This market momentum underscores the  vitality of the sector and  our 
business model. Overall trading remains in line with the comments made in our
trading update of 29 October 2012 and based on our performance this period and
the fundamentals of  the sector, we  remain confident in  our outlook for  the 
rest of the year."



Customer and Business Development



In the first half of our  financial year, blinkx's patented video  advertising 
platform continued to  attract global  brand advertisers.  With the  Internet 
claiming an increasingly significant share of ad budgets, leaders from across
a breadth of industries, such as Gillette, Microsoft and Toyota capitalized on
blinkx's unique  offering,  booking  campaigns through  top  global  agencies, 
including Carat, Starcom and Neo Ogilvy.



blinkx also  progressed its  cross-platform distribution  strategy during  the 
period, striking new deals in the Connected TV space with Sony and Popbox, and
introducing the new  blinkx.com, built using  responsive design and  optimized 
for use on mobile devices.



On the content front,  blinkx expanded its roster  of premium media  partners, 
signing content agreements with a diverse array of industry leaders  including 
Hulu, Kiplinger and Fox Sports, among others.



Management Changes



On 19 July 2012, blinkx announced that Suranga Chandratillake, the Founder and
Chief Executive Officer of the Company, was assuming the role of President and
Chief Strategy Officer and would continue  to serve as an Executive Member  on 
its Board. Subhransu ("Brian") Mukherjee, who was the Chief Operating  Officer 
of blinkx, was appointed CEO of blinkx and an Executive Member of its Board of
Directors effective as of that date.



blinkx also announces that Jonathan Spira has announced his intention to  step 
down as Chief Financial  Officer of the Company  with effect from 30  November 
2012. Mr. Spira has served as the head of blinkx's global finance team since
2008, and has  been instrumental in  building the company  into a dynamic  and 
profitable, $150+m revenue enterprise. The Board extends its gratitude to Mr.
Spira for his contribution to growth of the Group and wishes him the best.



Edward  Reginelli,  aged  41,  currently  Senior  Vice  President  and   Group 
Controller at blinkx,  will step up  to succeed Mr.  Spira as Chief  Financial 
Officer and they have been working together to ensure a smooth transition.



Mr. Reginelli joined blinkx in April 2012. He has over 15 years of experience,
managing all aspects of  financial accounting, controls, analysis,  operations 
and reporting in complex corporate environments. Before joining blinkx, he was
Vice President of Finance and  Corporate Controller at Purple  Communications, 
Inc., a  company  that  specialized in  technology  enabled  interpreting  and 
telecommunication services.  Prior  to  this he  served  as  Chief  Financial 
Officer and  a  Director of  Burke  Industries,  Inc. and  held  other  senior 
financial positions at Compass Aerospace, PPG Industries and Nestle USA.



Mr. Reginelli holds a B.S in Business Administration and Accounting from  John 
Carroll University, Ohio and is a registered Certified Public Accountant.



The Company confirms there  is no other information  required to be  disclosed 
pursuant to Schedule 2 paragraph (g) of the AIM Rules.



Products



In September,  blinkx unveiled  an open  beta of  the next  generation of  its 
flagship product, blinkx.com. The  new site is designed  to enhance the  video 
discovery and viewing experience for audiences, with powerful  personalization 
and recommendation  capabilities, and  easy integration  across users'  social 
graph. It was  built from  the ground  up for use  on mobile  devices, with  a 
simple, elegant user interface that  is touch-optimized for easy  navigation. 
New features of  the next-generation blinkx.com  include customized  channels, 
Facebook and Twitter integration and a unique "Pause and Pick Up"  capability, 
which allows users to start watching video  on one device, hit pause and  pick 
it up again at the same point on a different device.



During the  period, blinkx  made significant  progress on  the integration  of 
advertising technology and  processes from  Burst Media  and Prime  Visibility 
Media Group (PVMG). This integration allows the group to function as a single
entity, giving it access to a broader and more substantial set of products and
solutions for its advertisers, publishers and content partners. This  enables 
the company to apply  its patented Concept Recognition  Engine (CoRE) to  both 
video and  non-video  assets across  all  sources, thereby  serving  the  most 
relevant ad, at  the optimum time,  with the highest  monetization rate, to  a 
wider audience.



Financial Highlights



For the six months ended 30  September 2012 (H1 2013), revenues totaled  $82.0 
million, an increase of  84% over the $44.6  million in revenues reported  for 
the 6 months  ended 30 September  2011 (H1 2012).  Adjusted net profit  before 
acquisition, exceptional and integration  costs and amortisation of  purchased 
intangibles for H1 2013 was $8.6  million (H1 2012: $5.7 million). Net  profit 
for H1 2013 was $2.7 million (H1  2012: $2.2 million). Earnings per share  for 
H1 2013 was 2.38 cents adjusted basic (H1 2012: 1.64 cents), 0.75 cents  basic 
(H1 2012: 0.63 cents), 2.34 adjusted  fully diluted (H1 2012: 1.60 cents)  and 
0.74 cents fully diluted  (H1 2012: 0.62 cents).  blinkx's cash balance at  30 
September 2012 was $41.6 million (30 September 2011: $52.9 million).



For further information please contact:



Financial Media Contacts        Analyst and Investor Contact
Edward Bridges/Charles Palmer   Jonathan Spira, CFO
FTI Consulting                  blinkx plc
(UK) 020 7831 3113              (US) 415 655 1450
NOMAD and Broker for blinkx plc
Charles Lytle/Christopher Wren
Citigroup Global Markets Ltd
(UK) 020 7986 9756





About blinkx PLC

blinkx (London  AIM: BLNX)  is  the world's  most comprehensive  video  search 
engine. Today, blinkx has indexed more than 35 million hours of audio,  video, 
viral and TV content,  and made it fully  searchable and available on  demand. 
blinkx's founders  set  out to  solve  a significant  challenge  - as  TV  and 
user-generated content on the  Web explode, keyword-based search  technologies 
only scratch the surface.  blinkx's patented search  technologies listen to  - 
and even see - the Web, helping  users enjoy a breadth and accuracy of  search 
results not available elsewhere. In  addition, blinkx powers the video  search 
for many  of  the  world's most  frequented  sites.  blinkx is  based  in  San 
Francisco and London. More information is available at www.blinkx.com





                                  BLINKX PLC

             CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

               Results for the six months to 30 September 2012

                   (in thousands, except per share amounts)

                                      

                                                  Six months to  Six months to
                                                   30 September   30 September
                                                           2012           2011
                                                    (unaudited)    (unaudited)
                                            Note           $000           $000
Revenue: continuing operations                           81,971         44,569
Cost of revenue                              9         (39,903)       (18,139)
Gross profit                                             42,068         26,430
Operating expenses
          Research and development                      (6,726)        (4,033)
          Sales and marketing                9         (22,814)       (15,506)
          Administrative expenses                       (4,673)        (1,999)
Profit from operations before acquisition
and exceptional costs*                                    7,855          4,892
Amortisation of purchased intangibles                   (2,642)        (1,550)
Acquisition and exceptional costs                       (3,247)        (1,921)
Profit from operations                                    1,966          1,421
Other income                                                505              -
Net investment revenue                                       10             61
Profit before taxation                                    2,481          1,482
Tax                                          3              235            711
Profit for the period attributable to
equity holders of the parent before
acquisition and exceptional costs*                        8,605          5,664
Profit for the period attributable to
equity holders of the parent                              2,716          2,193
Earnings per share (cents)                                Cents          Cents
Adjusted basic*                              4             2.38           1.64
Basic                                        4             0.75           0.63
Adjusted diluted*                            4             2.34           1.60
Diluted                                      4             0.74           0.62



*Adjusted for acquisition costs of $1.4m (2011:$1.9m), exceptional charges of
$1.8m and amortization of purchased intangibles of $2.6m (2011: $1.6m



           CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                 (UNAUDITED)

                    For six months ended 30 September 2012

                                      

                                                  Six months to  Six months to
                                                   30 September   30 September
                                                           2012           2011
                                                    (unaudited)    (unaudited)
                                                           $000           $000
Profit for the period                                     2,716          2,193
Exchange difference on translation of foreign
operations                                                  301        (1,358)
Total comprehensive income for the period                 3,017            835

                                      

                                      

                                  BLINKX PLC

               CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

                           As at 30 September 2012

                                (in thousands)

                                      

                                           As at         As at
                                    30 September  30 September
                                            2012          2011
                                     (unaudited)   (unaudited)
                              Note          $000          $000
ASSETS
Non-current assets
Goodwill                                  49,080        26,779
Intangible assets                         27,654        20,813
Property, plant and equipment              2,014         1,801
Other receivables                            250           250
Deferred tax asset                         8,498         2,107
                                          87,496        51,750
Current assets
Trade receivables                         24,147        19,613
Other receivables                          3,515         3,756
Cash and cash equivalents                 41,627        52,928
                                          69,289        76,297
Total assets                             156,785       128,047
LIABILITIES
Current liabilities
Trade and other payables                (25,762)      (21,452)
Non-current liabilities
Deferred tax liability                   (1,732)             -
Other payables                             (453)         (263)
                                         (2,185)         (263)
Total liabilities                       (27,947)      (21,715)
Net assets                               128,838       106,332
Shareholders' equity
Share capital                  5           6,845         6,713
Share premium account          5         101,809        87,072
Shares to be issued            6             750           831
Stock compensation reserve                12,880        10,906
Currency translation reserve             (7,536)       (8,900)
Merger reserve                            33,089        33,047
Retained loss                           (18,999)      (23,337)
Total equity                             128,838       106,332





                                  BLINKX PLC

           CONDENDSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

                   For the six months to 30 September 2012

                                (in thousands)



                                                  Six months to  Six months to
                                                   30 September   30 September
                                                           2012           2011
                                                    (unaudited)    (unaudited)
                                                           $000           $000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit from operations                                    1,966          1,421
Adjustments for:
     Depreciation and amortization                        4,206          2,345
     Share based payments                                   942            494
     Other income                                           505              -
     Foreign exchange gains / (losses)                       11           (61)
Operating cash flows before movements in working
capital                                                   7,630          4,199
Changes in operating assets and liabilities:
     Increase in trade and other receivables            (1,743)        (4,160)
     Increase in trade and other payables                   375          2,110
Net cash generated by operations                          6,262          2,149
Income taxes paid                                       (1,555)              -
Net cash generated by operating activities                4,707          2,149
CASH FLOWS FROM INVESTMENT ACTIVITIES
Interest received                                            10             61
Purchase of property, plant and equipment and
intangibles                                             (1,948)        (2,288)
Acquisitions, net of cash acquired                            -            705
Net cash used by investment activities                  (1,938)        (1,522)
CASHFLOWS FROM FINANCING ACTIVITIES
Net payments on finance lease                              (99)           (45)
Proceeds from issuance of shares                            261            623
Net cash generated by financing activities                  162            578
Net increase in cash and cash equivalents                 2,931          1,205
Beginning cash and cash equivalents                      38,406         52,809
Effect of foreign exchange on cash and cash
equivalents                                                 290        (1,086)
Ending cash and cash equivalents                         41,627         52,928





                                  BLINKX PLC

      CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

                   For the six months to 30 September 2012

                                (in thousands)



                        Share  Shares         Stock     Currency
             Share  premium   to be  compensation  Translation   Merger  Retained
             Capital  account  issued       reserve      reserve  reserve  earnings    Total
                $000     $000    $000          $000         $000     $000      $000     $000
Balance as
at 1 April
2011           6,398   86,443       -         9,968      (7,542)  (4,323)  (25,530)   65,414
Issue of
shares           315      629       -             -            -   37,370         -   38,314
Current
period
profit             -        -       -             -            -        -     2,193    2,193
Exchange
differences
on
translation        -        -       -             -      (1,358)        -         -  (1,358)
Equity to
be issued -
acquisition
related            -        -     831             -            -        -         -      831
Share based
payments           -        -       -           938            -        -         -      938
Balance as
at 30
September
2011           6,713   87,072     831        10,906      (8,900)   33,047  (23,337)  106,332
                        Share  Shares         Stock     Currency
             Share  premium   to be  compensation  Translation   Merger  Retained
             Capital  account  issued       reserve      reserve  reserve  earnings    Total
                $000     $000    $000          $000         $000     $000      $000     $000
Balance as
at 1 April
2012           6,837  101,552     754        11,938      (7,837)   33,089  (21,715)  124,618
Issue of
shares             8      257     (4)             -            -        -         -      261
Current
period
profit             -        -       -             -            -        -     2,716    2,716
Exchange
differences
on
translation        -        -       -             -          301        -         -      301
Share based
payments           -        -       -           942            -        -         -      942
Balance as
at 30
September
2012           6,845  101,809     750        12,880       -7,536   33,089   -18,999  128,838





                                  BLINKX PLC

       NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

                                 (UNAUDITED)





1. Basis of preparation



The condensed interim financial statements have been prepared using accounting
policies and methods of computation consistent with those used in the  audited 
statutory  financial  statements  for  the  year  ended  31  March  2012   and 
International Financial Reporting  Standards ("IFRSs") as  adopted for use  in 
the European Union. While the  financial information included in this  interim 
announcement  has  been  compiled  in  accordance  with  the  recognition  and 
measurement principles of  IFRSs, this  announcement does  not itself  contain 
sufficient  information  to  comply   with  IFRSs.  These  interim   financial 
statements do not constitute statutory financial statements within the meaning
of section 435 of the Companies Act 2006.



Statutory financial statements for the year ended 31 March 2012 are  available 
on the blinkx plc's (the "Group's") website www.blinkx.com and have been filed
with the Registrar of Companies. The Group's auditor issued a report on  those 
financial statements that was unqualified,  did not contain a statement  under 
section 498(2) or section 498(3)  of the Companies Act  2006 and did not  draw 
attention to any matters by way of emphasis.



The information for the six month period ended 30 September 2012 is unaudited,
but reflects all normal adjustments which  are, in the opinion of  management, 
necessary to provide  a fair statement  of results and  the Group's  financial 
position for and as at the period presented. The results of operations for the
period ended 30 September 2012 are not necessarily indicative of the operating
results for future operating periods.



The directors have  considered the financial  resources of the  Group and  the 
risks associated  with doing  business  in the  current economic  climate  and 
believe the  Group is  well placed  to manage  these risks  successfully.  The 
directors have reviewed  management's business plan  setting out key  business 
assumptions and considered  it to  be reasonable  and are  satisfied that  the 
Group has  adequate resources  to continue  in operational  existence for  the 
foreseeable future being a period of no  less that 12 months from the date  of 
signing of this interim report. Accordingly, they continue to adopt the  going 
concern basis in preparing this interim announcement.



2. Share-based payments



Included within operating expenses are the following amounts in respect of
share based payments:



                         Six months to  Six months to
                          30 September   30 September
                                  2012           2011
                           (unaudited)    (unaudited)
                                  $000           $000
Sales and marketing                566            312
Research and development           247            115
Administrative expenses            129             67
                                   942            494



3. Taxation



Tax for the period is  charged at a composite tax  rate of -9.4 percent  (half 
year to 30  September 2011:  -48.0 percent,  year to  31 March  2011 :  -101.9 
percent), representing  the  best estimate  of  the average  annual  effective 
income tax rate expected for the full  year plus the effect of discrete  items 
recognised in the period.



4. Earnings per share



The calculation of the basic and diluted earnings per share is based on the
following information.



                                                  Six months to  Six months to
                                                   30 September   30 September
                                                           2012           2011
                                                    (unaudited)    (unaudited)
                                                           $000           $000
Earnings
Adjusted* profit (used in calculation of basic
and diluted loss per share)                               8,605          5,664
Profit (used in calculation of basic and diluted
loss per share)                                           2,716          2,193
                                                         Number         Number
Number of shares
Weighted average number of shares for the basic
earnings per share                                  361,728,496    345,815,693
Weighted average number of shares for the diluted
earnings per share                                  368,280,824    353,518,944



*Adjusted for acquisition costs of $1.4m (2011:$1.9m), exceptional charges of
$1.8m and amortization of purchased intangibles of $2.6m (2011: $1.6m)



5. Share capital



The issuance of shares in the period  relates to the issuance of 1,637  shares 
to the  shareholders of  Burst Media  Corporation and  481,943 shares  on  the 
exercise of employee share options.



6. Shares to be issued



The shares to be  issued reserve relates  to shares which  are expected to  be 
issued to Burst shareholders, as part  of the consideration, who have not  yet 
submitted the paperwork  to effect  the exchange  of Burst  shares for  blinkx 
shares.



7. Acquisition and exceptional costs



Acquisition costs of $1.4 million and exceptional charges of $1.8 million have
been separately identified on the face of the income statement. These  charges 
included post  acquisition remuneration,  one  time write  down of  a  prepaid 
distribution charge, onerous facility, severance and professional services.



8. Acquisition of subsidiaries



On 9 November  2011 the group  acquired 100%  of the issued  share capital  of 
Prime Visibility Media Group Inc.,  an online advertising network and  digital 
advertising agency  headquartered in  New York,  USA. The  integration of  the 
blinkx video search engine  with PVMG's text search  platform will enable  the 
group to  tap into  a  new audience  of  intent-driven consumers  and  deliver 
TV-style brand advertising to them.



Fair values of purchased assets and liabilities:



                           Provisional   Adjustment to
                             FV @ date            FV @       Final
                           of purchase   November 2012  Fair Value
                             $ million       $ million   $ million
Intangibles                       12.6                        12.6
Other assets                       5.7                         5.7
Deferred tax asset                 1.7           (0.2)         1.5
Cash                               0.7                         0.7
Trade & other payables           (7.3)                       (7.3)
Total identifiable assets         13.4           (0.2)        13.2
Goodwill                          21.4             0.2        21.6
Total consideration               36.0 *             -        36.0 *



*The fair value  of the $36.0  million consideration paid  comprises of:  cash 
paid of $31 million; deferred  consideration provisionally determined of  $3.8 
million; and prepaid post acquisition remuneration of $1.2 million.



The $0.2 million  adjustment to fair  values relates to  a deferred tax  asset 
valuation adjustment.



The measurement period relating to the PVMG acquisition is now completed so no
further purchase adjustments will be posted to the fair values.



9. Standardisation of expense classifications on integration



As part of the process of integrating those companies acquired in fiscal  year 
2012, the  company  has  been  aligning  its  accounting  policies  to  ensure 
consistent expense  classifications across  the  expanded Group.  Whilst  this 
exercise has  been  concluded  for  the  current  period  certain  prior  year 
marketing and advertising expenses may  not have been consistently  classified 
according to blinkx  accounting policies. This  expense reclassification  will 
not impact  revenue, operating  profits  or earnings  per share  as  reported. 
Management is currently  working to  analyse the  full effect  of the  expense 
classification differences in the prior period, but prior to this announcement
it  has   been  impracticable   to   determine  fully   the  extent   of   the 
reclassifications required. Management intends to disclose the outcome of this
exercise, to the extent material, in its  annual report for the year ended  31 
March 2013.



10. Related party transactions



For the  purposes of  IAS  24 Related  Party  Disclosures, the  directors  are 
considered to be the Group's  key management personnel. Their remuneration  is 
disclosed within the Directors' Report as reported in the Statutory  financial 
statements for the year ended 31 March 2012. There were no other related party
transactions in either the current year or prior year.







INDEPENDENT REVIEW REPORT TO BLINKX PLC



We have been engaged  by the company  to review the  interim set of  financial 
statements in the half-yearly

financial report for the  six months ended 30  September 2012 which  comprises 
the  condensed  consolidated  income  statement,  the  condensed  consolidated 
statement of comprehensive income,  the condensed consolidated balance  sheet, 
the condensed  consolidated cash  flow statement,  the condensed  consolidated 
statement of changes in  equity and related  notes 1 to 10.  We have read  the 
other information contained in the half-yearly financial report and considered
whether it  contains any  apparent misstatements  or material  inconsistencies 
with the information in the interim set of financial statements.



This report is  made solely to  the company in  accordance with  International 
Standard on  Review  Engagements (UK  and  Ireland) 2410  "Review  of  Interim 
Financial Information  Performed by  the Independent  Auditor of  the  Entity" 
issued by the Auditing Practices Board.  Our work has been undertaken so  that 
we might state to the company those  matters we are required to state to  them 
in an  independent review  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, for  our review  work, for  this report,  or for  the 
conclusions we have formed.



Directors' responsibilities

The half-yearly  financial  report is  the  responsibility of,  and  has  been 
approved by, the directors.  The directors are  responsible for preparing  the 
half-yearly financial report in  accordance with the AIM  Rules of the  London 
Stock Exchange.



As disclosed  in note  1, the  annual financial  statements of  the group  are 
prepared in  accordance with  IFRSs  as adopted  by  the European  Union.  The 
interim set of  financial statements  included in  this half-yearly  financial 
report have been prepared in accordance with the accounting policies the group
intends to use in preparing its next annual financial statements.



Our responsibility

Our responsibility is to  express to the company  a conclusion on the  interim 
set of financial statements in the  half-yearly financial report based on  our 
review.



Scope of Review

We conducted our review  in accordance with  International Standard on  Review 
Engagements (UK and  Ireland) 2410  "Review of  Interim Financial  Information 
Performed by the  Independent Auditor of  the Entity" issued  by the  Auditing 
Practices Board for use in the  United Kingdom. A review of interim  financial 
information consists of making inquiries, primarily of persons responsible for
financial and accounting  matters, and  applying analytical  and other  review 
procedures. A review is substantially less in scope than an audit conducted in
accordance with  International  Standards on  Auditing  (UK and  Ireland)  and 
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit.  Accordingly, 
we do not express an audit opinion.



Conclusion

Based on our  review, nothing  has come  to our  attention that  causes us  to 
believe that  the  interim set  of  financial statements  in  the  half-yearly 
financial report for the six months  ended 30 September 2012 is not  prepared, 
in all material respects, in accordance with the AIM Rules of the London Stock
Exchange.



Deloitte LLP

Chartered Accountants and Statutory Auditor

Cambridge, United Kingdom

14 November 2012

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR GGGBUGUPPPPW -0- Nov/14/2012 07:01 GMT
 
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