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IGNITE LIMITED Interim / Quarterly Report 2015

Aug 30, 2015

65110_rns_2015-08-30_c1d199cf-c564-4633-a0ab-fa5d7e6298d0.pdf

Interim / Quarterly Report

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APPENDIX 4E UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015 ABN 43 002 724 334

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WWW.CLARIUS.COM.AU

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APPENDIX 4E UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

ABN 43 002 724 334

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Report Period .........................................................................................................................................................1

Results for announcement to the market ................................................................................................................1 Parent Entity ...........................................................................................................................................................2 Associates and Joint Ventures ................................................................................................................................2 Commentary on results for the period .....................................................................................................................2 Unaudited Report ...................................................................................................................................................3 Financial Statements and Notes to the Financial Statements ..................................................................................4

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2015 CLARIUS GROUP APPENDIX 4E

01

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

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FINANCIAL YEAR ENDED:

30 June 2015

PREVIOUS CORRESPONDING PERIOD:

30 June 2014

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TO THE MARKET
DESCRIPTION 30 JUNE 2015
A$000		 30 JUNE 2014
A$000		 % CHANGE
Revenue from ordinary activities 178,953 179,392 (0.2%)
Loss from ordinary activities after tax (11,328) (1,677) (575.5%)
Loss for the period attributable to members (11,328) (1,677) (575.5%)

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REVIEW OF REVENUE AND PROFIT

During financial year 2015 revenue from ordinary activities was $179.0m (FY2014: $179.4m). Gross profit for the period grew 3.2% to $38.3m (FY2014: $37.1m). The improvement in gross profit margin to 21.4% (FY2014: 20.7%) reflects the continuing efforts to focus on higher margin contracting services, together with the increased contribution of higher margin permanent recruitment services. In light of the significant restructuring activities carried out during the course of the year, the improved gross profit margin performance of the business represents a major achievement as the company builds the platform for future growth.

During financial year 2015 the Clarius Group (the Group) made a loss from ordinary activities of $11.3m (FY2014: loss of $1.7m). During this period the Group has focused on simplifying and evolving the current business model across all service lines which has resulted in a number of significant restructuring activities.

As a consequence of these activities the Group has made a number of provisions and write-offs in relation to items including software and equipment. These oneoff costs, provisions and write downs totalled $7.3m at the half year (including $2.9m of impairment losses as disclosed in Note 9). A further $2.6m was identified in the second half of the year. Without these non-recurring items the underlying net loss position would have been $1.4m (FY2014: loss of $1.7m).

As a result of the significant restructuring activities undertaken during the year the Group finished the financial year strongly with revenue, gross profit and underlying business performance having all improved and the Group is now positioned for future growth.

DIVIDENDS OR DIVIDEND DISTRIBUTION PLAN

On 31 August 2015, the Directors resolved not to declare an interim or final dividend for the year ended 30 June 2015. No dividends were paid by the Group in the previous corresponding period.

2015 CLARIUS GROUP APPENDIX 4E

02

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

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The ultimate Australian parent entity and the ultimate parent of the Consolidated Entity is Clarius Group Limited.

COUNTRY OF CLASS OF 2015 2014
INCORPORATION SHARES % %
Alliance Recruitment Pty Ltd Australia ordinary 100 100
Candle Holdings Limited New Zealand ordinary 100 100
Candle New Zealand Limited New Zealand ordinary 100 100
Lloyd Morgan International Pty Limited Australia ordinary 100 100
JAV IT Group Pty Limited Australia ordinary 100 100
Ignite Management Services Pty Limited Australia ordinary 100 100
Lloyd Morgan Limited Hong Kong ordinary 100 100
Lloyd Morgan Hong Kong Limited Hong Kong ordinary 100 100
Candle Recruitment Pte Limited Singapore ordinary 100 100
Lloyd Morgan China Limited China ordinary 89 89

1 The proportion of ownership interest is equal to the proportion of voting power held.

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Clarius Group Limited does not have any holdings in joint ventures and associates.

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The Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flows, Consolidated Statement of Changes in Equity and Notes to the Financial Statements are included on pages 4 to 13.

Financial year 2015 represented a period of significant transformation for the Group due to the extensive restructuring activities. These activies delivered cost efficiencies at all levels of the business, supported by the creation of a management team capable of enhanced engagement. These activities included:

  • The establishment of a new executive team including the appointment of a new Chief Executive Officer, Chief Financial Officer, Chief Technology Officer and Managing Director (China) to provide the drive and commitment for future growth.

  • An operational restructure exercise in New Zealand.

  • The decision to withdraw from the Singapore market and focus on more profitable regions.

  • The significant write-down of legacy software and platform costs.

  • A review of the debtor assets and provisions.

The Group recorded a loss from ordinary activities of $11.3m (FY2014: loss of $1.7m) which includes a number of provisions and write-offs totalling $9.9m.

With revenue from continuing operations remaining stable it was pleasing to see gross profit for the period growing to $38.3m (FY2014: $37.1m), and gross profit margin growing to 21.4% (FY2014: 20.7%).

  • An extensive review of the China operations resulting in a complete replacement of the senior executive team.

2015 CLARIUS GROUP APPENDIX 4E

03

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

The Australian recruitment business continued to face challenging economic conditions which, combined with the operational challenges created by the business transformation exercise, resulted in a 1.5% decrease in revenue to $159.9m (FY2014: $162.4m). Competition in the Australian labour hire market remains intense and the Group continues to focus its efforts on acquiring and retaining higher margin contracting services. There is also a heightened focus on developing the On Demand IT Services business which represents a significant growth opportunity.

The success of the restructure exercise in New Zealand is demonstrated by the 23.9% year-on-year revenue growth to $9.6m (FY2014: $7.8m). Revenues in Asia grew marginally to $9.4m (FY2014: $9.2m). As a result of the extensive restructure of the China operations which included a 30% reduction in headcount, the increase in revenue represents a significant improvement in productivity that will continue to drive benefits into financial year 2016.

Overall, the year ended encouragingly with strong trading results. The underlying business recorded continuous profitable trading months in May, June and July.

Despite the significant restructuring activities undertaken in financial year 2015 the Group finished the year with a cash balance of $0.6m (FY2014: $2.5m). This includes an overdraft of $0.5m (FY2014: nil). Net cash from operating activities fell by $5.0m to ($1.7m) reflecting the year-on-year decrease in trade debtors and the timing differences created by moving from quarterly to monthly superannuation payments.

With the transformation exercise nearing completion the Group has a strong balance sheet and a cost base that has been optismised for future growth. With this ability to execute more effectively, the primary focus for financial year 2016 is to return the traditional core recruiting business back to sustainable profit. This in turn will allow the Group to generate the cash flows required to invest in new growth opportunities.

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The financial report for the year ended 30 June 2015 is in the process of being audited and the Clarius Group Limited will release audited financial statements on/or before 30 September 2015

2015 CLARIUS GROUP APPENDIX 4E

04

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015

FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2015
$000
2014
$000
Continuing operations
Revenue
1, 2
On hired labour costs
Gross Proft
Employee benefts expense
Depreciation and amortisation expense
Restructuring expense
Operating Rental expense
Other expenses
3
Impairment Loss
9
Results from operating activities
Finance income
Finance cost
Net fnance costs
(Loss) before income tax
Income tax (expense)/beneft
4
(Loss) for the year attributed to Owners of
the Company
Other comprehensive (loss)
Items that may be reclassifed subsequently
to proft or loss:
Foreign currency translation differences for
foreign operations
Income tax on other comprehensive income
Other comprehensive income for the year,
net of income tax
Total comprehensive income for the year		 178,953
179,392
(140,672)
(142,312)
38,281
37,080
(28,419)
(28,270)
(1,041)
(1,051)
(1,855)
(286)
(3,773)
(3,699)
(9,892)
(6,111)
(2,946)
-
(9,645)
(2,337)
17
10
(188)
(158)
(171)
(148)
(9,816)
(2,485)
(1,512)
808
(11,328)
(1,677)
373
185
-
-
373
185
(10,955)
(1,492)
Centsper Share
Centsper Share
Basic loss per share
5
Diluted loss per share
5
Net tangible asset per share
5		 (12.65)
(1.87)
(12.65)
(1.87)
0.25
0.33

The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes, which form an integral part of the unaudited preliminary final report.

2015 CLARIUS GROUP APPENDIX 4E

05

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

NOTE 2015
$000		 2014
$000
Current assets
Cash and cash equivalents 6 1,135 2,500
Trade and other receivables 7 42,568 48,868
Current Tax Receivables - 36
Total current assets 43,703 51,404
Non-current assets
Plant and equipment 1,582 2,112
Deferred tax assets 1,831 2,690
Intangible assets 25 3,033
Total non-current assets 3,438 7,835
Total assets 47,141 59,239
Current liabilities
Trade and other payables 8 18,797 20,684
Bank overdraft 6 497 -
Provisions 1,856 1,999
Total current liabilities 21,150 22,683
Non-current liabilities
Provisions 1,458 1,068
Total non-current liabilities 1,458 1,068
Total liabilities 22,608 23,751
Net assets 24,533 35,488
Equity
Contributed equity 83,541 83,541
Reserves (716) 255
Accumulated losses (58,292) (48,308)
Total equity 24,533 35,488

The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes, which form an integral part of the unaudited preliminary financial report.

2015 CLARIUS GROUP APPENDIX 4E

06

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015

AS AT 30 JUNE 2014 SHARE
CAPITAL
$000
TRANSLATION
RESERVE
$000
SHARE BASED
PAYMENT
RESERVE
$000
RETAINED
EARNINGS
$000
TOTAL
$000
Balance as 1 July 2013
Total comprehensive income
for the period
Loss for the year attributed
to Owners of the Company
Other comprehensive income
Foreign currency translation
differences for foreign operations
Total other comprehensive
income for the period
Total transactions with owners
Balance as at 30 June 2014
AS AT 30 JUNE 2015		 83,541
(1,274)
1,344
(46,631)
36,980
-
-
-
(1,677)
(1,677)
-
185
-
-
185
-
185
-
(1,677)
(1,492)
-
-
-
-
-
83,541
(1,089)
1,344
(48,308)
35,488
SHARE
CAPITAL
$000
TRANSLATION
RESERVE
$000
SHARE BASED
PAYMENT
RESERVE
$000
RETAINED
EARNINGS
$000
TOTAL
$000
Balance as 1 July 2014
Total comprehensive income
for the period
Loss for the year attributed
to Owners of the Company
Other comprehensive income
Foreign currency translation
differences for foreign operations
Total other comprehensive
income for the period
Transactions with owners
recorded directly in equity
Lapsed share options
Total transactions with owners
Balance as at 30 June 2015		 83,541
(1,089)
1,344
(48,308)
35,488
-
-
-
(11,328)
(11,328)
-
373
-
-
373
-
373
-
(11,328)
(10,955)
-
-
(1,344)
1,344
-
-
-
(1,344)
1,344
-
83,541
(716)
-
(58,292)
24,533

2015 CLARIUS GROUP APPENDIX 4E

07

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015

FOR THE YEAR ENDED 30 JUNE 2015
NOTE JUNE 2015
$000		 JUNE 2014
$000
Cash fows from operating activities
Receipts from customers 317,030 315,317
Payments to suppliers and employees (299,763) (295,456)
Interest received 17 10
Interest and other borrowing costs paid (188) (158)
Income tax refund - 1,197
Sales taxpaid (18,115) (17,577)
Net cash (used in)/provided
byoperatingactivities		 (1,019) 3,333
Cash fows from investing activities
Purchase of plant and equipment (553) (174)
Payments for software development and (445) (912)
intangible assets
Net cash used in investingactivities (998) (1,086)
Cash fows from fnancing activities
Proceeds/(Repayment) from/of borrowings - -
Dividends paid to shareholders - -
Redemption of Shares - -
Net cash provided by/(used in)
fnancingactivities - -
Net (decrease)/increase in cash held (2,017) 2,247
Cash and cash equivalents at the beginning
of the year		 2,500 234
Effect of exchange rates on cash holdings
in foreign currencies		 155 19
Cash at the end of the fnancialyear 6 638 2,500

The Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes, which form an integral part of the unaudited preliminary final report.

2015 CLARIUS GROUP APPENDIX 4E

08

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

NOTES TO THE PRELIMINARY FINAL REPORT

1. SEGMENT INFORMATION – OPERATING SEGMENTS

Recruitment Services - Alliance Recruitment, Candle, Lloyd Morgan, SouthTech and The One Umbrella

(i) Provision of recruitment services (permanent and contract placements).

Information Technology Services - JAV IT

(ii) Outsourcing and technical support services.

Managed Services - Ignite

(iii) Management and transitioning of contractors, including outsourced payroll solutions.

RECRUITMENT
SERVICES
INFORMATION
TECHNOLOGY
SERVICES
MANAGED
SERVICES
CONSOLIDATED
OPERATING SEGMENTS
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
Revenue
Services to external customers
260,787
259,138
17,066
15,202
6,175
10,073
284,028284,413
Inter-segment revenues
-
-
-
-
13,761
18,493
13,761
18,493
Total segment revenue
260,787
259,138
17,066
15,202
19,936
28,566
297,789
302,906
Total segment revenue
297,789
302,906
(-) Inter company elimination
(13,512)
(18,187)
(-) Reclassifcation of direct
gross margin
(105,324)
(105,327)
Consolidated revenue
178,953
179,392
Reportable Segments Proft
Proft before tax
3,017
4,725
1,610
716
240
338
4,867
5,779
Less: Corporate overheads
(11,737)
(8,264)
Impairment loss
(2,946)
-
Consolidated loss before tax
(9,816)
(2,485)
Interest Revenue
16
9
-
-
1
1
17
10
Interest Expenses
188
158
-
-
-
-
188
158
Depreciation & amortisation
1,011
1,007
26
39
4
5
1,041
1,051
Australia
New Zealand
Asia
Total
Revenue
External sales
159,906
162,422
9,628
7,772
9,419
9,198
178,953
179,392
Interest revenue
7
6
8
4
2
-
17
10
TOTAL Revenue
159,913
162,428
9,636
7,776
9,421
9,198
178,970
179,402
Non current assets*
1,322
4,633
13
47
272
465
1,607
5,145		 RECRUITMENT
SERVICES
INFORMATION
TECHNOLOGY
SERVICES
MANAGED
SERVICES
CONSOLIDATED
OPERATING SEGMENTS
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
Revenue
Services to external customers
260,787
259,138
17,066
15,202
6,175
10,073
284,028284,413
Inter-segment revenues
-
-
-
-
13,761
18,493
13,761
18,493
Total segment revenue
260,787
259,138
17,066
15,202
19,936
28,566
297,789
302,906
Total segment revenue
297,789
302,906
(-) Inter company elimination
(13,512)
(18,187)
(-) Reclassifcation of direct
gross margin
(105,324)
(105,327)
Consolidated revenue
178,953
179,392
Reportable Segments Proft
Proft before tax
3,017
4,725
1,610
716
240
338
4,867
5,779
Less: Corporate overheads
(11,737)
(8,264)
Impairment loss
(2,946)
-
Consolidated loss before tax
(9,816)
(2,485)
Interest Revenue
16
9
-
-
1
1
17
10
Interest Expenses
188
158
-
-
-
-
188
158
Depreciation & amortisation
1,011
1,007
26
39
4
5
1,041
1,051
Australia
New Zealand
Asia
Total
Revenue
External sales
159,906
162,422
9,628
7,772
9,419
9,198
178,953
179,392
Interest revenue
7
6
8
4
2
-
17
10
TOTAL Revenue
159,913
162,428
9,636
7,776
9,421
9,198
178,970
179,402
Non current assets*
1,322
4,633
13
47
272
465
1,607
5,145		 RECRUITMENT
SERVICES
INFORMATION
TECHNOLOGY
SERVICES
MANAGED
SERVICES
CONSOLIDATED
OPERATING SEGMENTS
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
2015
$000
2014
$000
Revenue
Services to external customers
260,787
259,138
17,066
15,202
6,175
10,073
284,028284,413
Inter-segment revenues
-
-
-
-
13,761
18,493
13,761
18,493
Total segment revenue
260,787
259,138
17,066
15,202
19,936
28,566
297,789
302,906
Total segment revenue
297,789
302,906
(-) Inter company elimination
(13,512)
(18,187)
(-) Reclassifcation of direct
gross margin
(105,324)
(105,327)
Consolidated revenue
178,953
179,392
Reportable Segments Proft
Proft before tax
3,017
4,725
1,610
716
240
338
4,867
5,779
Less: Corporate overheads
(11,737)
(8,264)
Impairment loss
(2,946)
-
Consolidated loss before tax
(9,816)
(2,485)
Interest Revenue
16
9
-
-
1
1
17
10
Interest Expenses
188
158
-
-
-
-
188
158
Depreciation & amortisation
1,011
1,007
26
39
4
5
1,041
1,051
Australia
New Zealand
Asia
Total
Revenue
External sales
159,906
162,422
9,628
7,772
9,419
9,198
178,953
179,392
Interest revenue
7
6
8
4
2
-
17
10
TOTAL Revenue
159,913
162,428
9,636
7,776
9,421
9,198
178,970
179,402
Non current assets*
1,322
4,633
13
47
272
465
1,607
5,145
Total segment revenue
(-) Inter company elimination
(-) Reclassifcation of direct
gross margin
Consolidated revenue
Reportable Segments Proft
Proft before tax
3,017
4,725
1,610
716
240
338
Less: Corporate overheads
Impairment loss
Consolidated loss before tax
Interest Revenue
16
9
-
-
1
1
178,953
179,392
4,867
5,779
(11,737)
(8,264)
(2,946)
-
(9,816)
(2,485)
17
10
188
158
1,041
1,051
Total
178,953
179,392
17
10
178,970
179,402
1,607
5,145
Interest Expenses
188
158
-
-
-
-
Depreciation & amortisation
1,011
1,007
26
39
4
5
Australia
New Zealand
Asia
Revenue
External sales
159,906
162,422
9,628
7,772
9,419
9,198
Interest revenue
7
6
8
4
2
-
TOTAL Revenue
159,913
162,428
9,636
7,776
9,421
9,198
Non current assets*
1,322
4,633
13
47
272
465

*Excluding Deferred Tax Assets

2015 CLARIUS GROUP APPENDIX 4E

09

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

2. REVENUE

2. REVENUE
CONSOLIDATED
2015 2014
$000 $000
Renderingof services 178,953 179,392
Total revenue 178,953 179,392

3. OTHER EXPENSES

3. OTHER EXPENSES
CONSOLIDATED
2015 2014
$000 $000
Bad and doubtful debts 1,791 371
Travelling expenses 861 665
Telephone charges 779 663
Consultancy fees 573 244
Software support 561 243
Offce expenses, printing, stationery and parking 548 569
Subscriptions 464 416
Accountancy, audit and tax fees 451 201
Recruitment costs 412 366
Insurance 410 417
Legal fees 352 144
Bank charges 299 231
Marketing and promotional expenses 279 291
Net advertising costs 226 293
Capitalised Product Development costs - (527)
Other operatingoverheads 1,886 1,524
Total other expenses 9,892 6,111

2015 CLARIUS GROUP APPENDIX 4E

10

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

4. INCOME TAX EXPENSE/(BENEFIT)

4. INCOME TAX EXPENSE/(BENEFIT)
CONSOLIDATED
2015
$000
2014
$000
Current tax
Adjustment for prior year
Deferred tax expense		 884
(16)
(231)
13
653
(3)
859
(805)
Total income tax expense/(beneft) 1,512
(808)
The prima facie tax on loss before income tax is reconciled to the
income tax as follows:
Prima facie tax payable on loss before income tax at 30%
Add tax effect of:
Overseas tax adjustment
Other non-deductible expenses
Tax incentives on capital expenditure
De-recognition of tax losses
Current year losses for which no deferred tax asset was recognised
Prior period (over)/under provision
Effect of concession
Utilisation of tax losses in current year
Tax rate adjustment on wholly-owned foreign subsidiaries		 (2,945)
(746)
(2,945)
(746)
884
-
23
37
-
(54)
592
-
3,183
74
(231)
13
-
(16)
-
(119)
6
3
Total income tax expense/(beneft) 1,512
(808)

2015 CLARIUS GROUP APPENDIX 4E

11

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

5. LOSS PER SHARE

5. LOSS PER SHARE
CONSOLIDATED
2015 2014
CENTS CENTS
Basic loss per share (12.65) (1.87)
Diluted loss per share (12.65) (1.87)
Net tangible assetper share 0.25 0.33

(a) Reconciliation of loss used in calculating loss per share

(a) Reconciliation of loss used in calculating loss per share
CONSOLIDATED
2015 2014
$000 $000
Loss after tax used in calculatingbasic lossper share (11,328) (1,677)
Adjustments for calculation of diluted loss per share:
Notional Interest earned on conversion of options - -
Net loss used in calculatingdiluted lossper share (11,328) (1,677)
Total Tangible Assets 22,677 29,765

(b) Weighted average number of shares used as the denominator

(b) Weighted average number of shares used as the denominator
CONSOLIDATED
2015 2014
Weighted average number of ordinary shares outstanding during the
year used in the calculation of basic LPS		 89,582 89,582
Adjustment for calculation of diluted loss per share:
Weighted average number of ordinary shares and potential ordinary
shares used as the denominator in calculatingdiluted lossper share		 89,582 89,582

(c) Classification of securities

Options granted to employees under the Employee Share Option Plan are considered to be potential ordinary securities and have been included in the determination of diluted earnings per share to the extent to which they are dilutive.

2015 CLARIUS GROUP APPENDIX 4E

12

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

6. CASH AND CASH EQUIVALENTS

CONSOLIDATED

2015 2014
$000 $000
Cash at bank and on hand 1,133 2,461
Deposits at call 2 39
1,135 2,500

Reconciliation of cash

The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows:

CONSOLIDATED

2015 2014
$000 $000
Balances as above 1,135 2,500
Bank overdrafts (497) -
638 2,500

Overdraft facilities
Overdraft facilities CONSOLIDATED
2015 2014
$000 $000
Overdraft facility 2,328 2,394
Amount utilised (497) -
Unused overdraft facility 1,831 2,394

2015 CLARIUS GROUP APPENDIX 4E

13

UNAUDITED PRELIMINARY FINAL REPORT – 30 JUNE 2015

7. TRADE AND OTHER RECEIVABLES

7. TRADE AND OTHER RECEIVABLES
CONSOLIDATED
2015 2014
$000 $000
Current
Trade receivables 36,925 41,548
Allowance for doubtful debts (2,051) (267)
34,874 41,281
Accrued income 6,132 6,774
Prepayments 389 546
Other debtors 1,173 267
42,568 48,868

All of the Group's trade and other receivables have been reviewed for indicators of impairment. As a result of this review there were doubts over the recoverability of certain trade receivables and a provision of $2,051,000 (FY2014: $267,000) has been recorded. The trade receivables provided for mostly relate to customer debts that are greater than 90 days overdue.

8. TRADE AND OTHER PAYABLES

8. TRADE AND OTHER PAYABLES
CONSOLIDATED
2015 2014
$000 $000
Current
Trade and Other Payables 18,797 20,684
18,797 20,684

9. IMPAIRMENT LOSSES

The group carried out a review of the recoverable amount of software capitalised. Recoverable amount is assessed on the basis of value in use. These assets included the group’s in-house developed CRM application and timesheet portal together with an externally developed payroll system and Client Portal. Based on the impairment testing performed at 31 December 2014, the value in use was less than the carrying amounts. Accordingly, the recognition of an impairment loss of $2,946k has been recognised in the profit or loss. There have been no further impairment losses in the year ending 30 June 2015.

14

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