Interim Results

Anite Group PLC 4 December 2001 ANITE GROUP PLC ('ANITE') Interim results for the six months ended 31 October 2001 Anite Group plc, the European IT consultancy and solutions business, announces its interim results today for the six months ended 31 October 2001. The highlights are: Highlights: * Profit before tax* up 54% to £13.1m (2000: £8.5m), including strong organic profits growth of 39% * Earnings per share* up 52% to 3.5p (2000: 2.3p) * Continuing businesses operating margins improve to 16.0% from 13.0% * Turnover in core businesses up 41% to £92.6m (2000: £65.5m), with strong organic sales growth of 23% driven by major contract successes * Operating profits for continuing businesses rose 74% to £14.8m (2000: £8.5m), comprised as follows: Public Sector turnover up 76% to £23.7m, operating profits up 765% to £2.2m Telecoms turnover up 74% to £18.0m, operating profits up 78% to £4.8m Travel turnover up 24% to £11.8m, operating profits up 59% to £1.8m Consultancy turnover up 22% to £39.1m, operating profits up 36% to £6.0m * The sale of the majority of the IT Personnel business during the period marked the final stage of the disposal of non-core businesses * All acquisitions made in 2001 have contributed positively to profits *Before goodwill amortisation and exceptional items and after net interest Operating profits referred to within this announcement exclude goodwill amortisation Commenting on the results John Hawkins, Chief Executive, said: 'Strong organic growth has been achieved in the first half driven by major contract successes. Our current phase of growth is being built on the strong platform we have created in each of our four sectors through both organic growth and selective acquisitions. 'Our core markets continue to perform strongly and our business is well balanced and geographically diversified and I am therefore confident that we will continue to outperform our sector in the coming year.' For further information please contact: Anite Group plc 0118 945 0121 John Hawkins, Chief Executive www.anite.com Simon Hunt, Finance Director Golin/Harris Ludgate 020 7324 8888 Reg Hoare/Laurence Read An Analysts' meeting will take place at the offices of Golin/Harris Ludgate, 111 Charterhouse Street, London, EC1M 6AW at 9.30am on 4 December 2001. Chairman's Statement Introduction I am pleased to report an excellent first half performance with profits before tax (before amortisation of goodwill and exceptional items) of £13.1m, 54% ahead of last year's figure of £8.5m. Basic earnings per share (before amortisation of goodwill and exceptional items) grew by 52%. The operating margin (before interest) from continuing businesses grew to 16% from 13% last year, based on operating profits, before goodwill, for continuing businesses of £14.8m (2000: £8.5m). Strong organic growth of 23% in sales and 39% in operating profits has been achieved in the first half, driven by major contract successes (organic growth is defined as excluding the effect of those acquisitions completed since 1 May 2000). The overall growth has been led by our public sector business, with operating profits up 765% to £2.2m. Our telecoms business has grown overall profits by 78%, and those of its core testing solutions business by 26%, with 3G deliveries being made for the first time in the half year. Our travel business' profits grew by 59%, with future growth being underpinned by the 10 year commitment won from Airtours and its £23.0m order book. Consultancy profits grew by 36% with further organic growth achieved. There has been no significant impact on the business overall as a result of the events of 11 September. Annualised recurring revenues increased during the period to £35m from £25m at the year end, whilst the Group's total order book now stands in excess of £ 70m. During the period the Group completed four acquisitions at a total cost of £ 30m, Parsec, a fast growing UK based consultancy business, Didgicom and Rox, two small travel software businesses and Braid Hill, which supplies court and fines solutions. All these acquisitions and those made in 2001 have made positive profit contributions during the period. Since the half year end we have also acquired FSS. The acquisition of FSS makes us one of the largest suppliers of Travel based solutions. In June we disposed of the majority of our IT personnel business. Cash remains strong with half year cash balances of £8.9m. Telecoms Our telecoms business has continued to grow, by maintaining its strong order intake despite a far tougher market than last year. Sales were 74% up at £ 18.0m (2000: £10.3m) and profits 78% up at £4.8m (2000: £2.7m). The telecoms testing business grew its sales by 42% and profits by 26%. Demand for GSM/ GPRS systems has been strong from customers in the Far East and from significant new customers in the USA, where this technology is replacing earlier systems. We completed development of our first phase 3G systems in the half year, and successfully delivered these to support strong customer demand, particularly in Europe. Our annual R & D spend is expected to be £5m this year compared with £4m in 2000-1. Calculus, our telecoms billing company acquired in December 2000, achieved a strong profit performance in the half year. Although orders from new customers have been affected by weak trading conditions in the sector, order intake recovered in the second quarter. We reduced the scale of our investment in the Network operator sector during the half year, and the residual products and distribution capability have been transferred into Calculus. Travel Our travel business has continued to perform strongly and its half year profits were 59% up at £1.8m (2000: £1.1m) on sales 24% higher at £11.8m (2000: £9.6m). Travel's strategic focus is to provide managed services and solutions to tour operators in Europe. Its market position and contracted revenues were greatly strengthened by winning the Airtours contract in August 2001. This 10 year contract, with committed revenues over the first 3 years of £15m, together with Travel's order book which stood at £23m at the half year, will underpin our performance in the second half. Travel acquisition - FSS We have further strengthened our travel business with the acquisition, announced today, of FSS, Anite Travel's main competitor. We will integrate FSS's reservation products and tour operator/travel agent customer base into our Slough based travel operations. Travellog, FSS's ferry subsidiary, will be merged with our Carus business based in Finland, enabling the supply through the Travellog channel of Carus' state of the art ferry solutions. In its year ended 31 March 2001, FSS made a pre-tax loss before goodwill amortisation and exceptional items of £0.8m on sales of £9.6m. The purchase price is £8.3m, plus deferred consideration and earnout of £1.7m. Consultancy The Group's consultancy division increased its operating profits by 36% to £6m (2000: £4.4m). Our banking consultancy (Anite Deutschland) has performed well and increased its trading profits. It has borne an investment arising from its expansion into providing consultancy services to German insurance companies and early indications in this market are promising. This business typically benefits from 12 month contracts with its customers. Our ERP consultancy and management consultancy (Anite/GMO) traded profitably during the half year and our strategy is to refocus the business in higher margin consultancy areas. Sales in France (Datavance) increased to £10.6m (2000, 4 months: £6.0m) and profits increased to £2.2m (2000, 4 months: £0.9m). The company continues to make good progress, although growth is lower than last year due to weaker market conditions. Anite Benelux grew its operating profits by 19% in a difficult market. Contracted revenue provides 40% of the turnover of this business, arising from the provision of infrastructure services. Consultancy acquisition - Parsec Parsec, acquired in August 2001, is a strongly growing UK based consultancy with customers in the finance and insurance sector. It has grown to 67 consultants and produced a £0.7m profit contribution following acquisition. The price paid was £7m, plus an earnout of up to £20m over 3 years based on a multiple of profits before tax of 4.5 to 1. Public Sector Our public sector business grew strongly following its establishment as a fully integrated and homogenous business during the last financial year. Sales were up 76%, with profits 765% higher at £2.2m. We have established a leadership position in the local authorities' market, with 72% penetration based on our very strong range of applications and substantial customer base. We are strongly placed to benefit from the government's budgeted spending, by 2005 of £2bn on e-government solutions to local authorities. At October 2001 our order books totalled £29m. Public Sector acquisitions - ICL and Braid Hill The ICL acquisition in March 2001 has provided a strong contribution underpinned by its contracted revenue of c.£5m pa. Sales of the Pericles products, which had been developed pre-acquisition at a cost of £8m, have been strong, and all of the Pericles products are expected to be completed and shipped in the second half. The Braid Hill acquisition in October 2001 (cost £0.3m) will enable us to supply courts and fines solutions to Scottish and English local authorities. Cash Cash remains strong, with half year cash balances of £8.9m. In the second half, we expect to spend £13.8m on earnouts and deferred payments for acquisitions. The cash cost of the FSS acquisition in December 2001 was £ 4.8m. Outlook In the solutions area, our Telecoms testing business continues to trade strongly, including strong 3G deliveries. Our creation of a Public Sector business over a 3 year period, which is the market leader within the local authority sector has resulted in very strong sales and profits growth, with improved margins. The outlook for this business, with a £29m order book in a market benefiting from the anticipated strong government spending on e-commerce solutions, is very good. The Travel division order book of £23m underpins its current business and profits and the integration of the FSS acquisition will reinforce our customer base and market strength. Our Consultancy business continues to grow strongly and we continue to find sensibly valued acquisitions to enhance our position. Our current phase of growth is being built on the strong platform we have created in each of our four sectors through both organic growth and selective acquisitions. Our core markets continue to perform strongly and our business is well balanced and geographically diversified. I am therefore confident that we will continue to outperform our sector in the coming year. Alec Daly Chairman 4 December 2001 Group Profit and Loss Account Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 Oct 2001 31 Oct 2000 30 April 2001 (Restated) (Restated) ---------------- ---------------- ---------------- Notes £'000 £'000 £'000 ---------------- ---------------- ---------------- Turnover Existing operations 90,723 65,528 158,754 Acquisitions 2 1,915 - - ---------------- ---------------- ---------------- Continuing operations 92,638 65,528 158,754 Discontinued 2,582 20,137 33,664 ---------------- ---------------- ---------------- 95,220 85,665 192,418 ---------------- ---------------- ---------------- Operating profit Existing operations 14,063 8,508 21,118 Acquisitions 2 801 - - Amortisation of (11,080) (5,843) (14,161) goodwill ---------------- ---------------- ---------------- Total continuing 3,784 2,665 6,957 operations Discontinued (1,135) 630 926 operations ---------------- ---------------- ---------------- Operating profit 2,649 3,295 7,883 Share of associate's (77) - (201) operating loss (Loss)/profit on sale/ closure of discontinued (83) 352 (9,535) operations Profit on sale of - - 10,123 tangible fixed assets - - 10,123 ---------------- ---------------- ---------------- Profit on ordinary activities before finance charges 2,489 3,647 8,270 Finance charges - net (525) (606) (1,174) ---------------- ---------------- ---------------- Profit on ordinary activities before tax 1,964 3,041 7,096 Tax on profits on 3 (3,224) (2,407) (5,746) ordinary activities ---------------- ---------------- ---------------- (Loss)/profit on (1,260) 634 1,350 ordinary activities after tax (1,260) 634 1,350 Minority interest (113) - (262) ---------------- ---------------- ---------------- (Loss)/profit for the (1,373) 634 1,088 period Dividend 5 - (48) (49) ---------------- ---------------- ---------------- Retained (loss)/profit (1,373) 586 1,039 for the period ---------------- ---------------- ---------------- (Loss)/earnings per 8 share (FRS 19 adjusted) - basic (0.5p) 0.2p 0.4p ---------------- ---------------- ---------------- - diluted (0.5p) 0.2p 0.4p ---------------- ---------------- ---------------- Earnings per share before amortisation of goodwill and exceptionals (FRS 19 adjusted) ---------------- ---------------- ---------------- - basic 4 3.5p 2.3p 5.5p ---------------- ---------------- ---------------- - diluted 3.4p 2.3p 5.3p ---------------- ---------------- ---------------- Consolidated Statement of Total Recognised Gains and Losses for the six months ended 31 October 2001 Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 Oct 2001 31 Oct 2000 30 April 2001 (Restated) (Restated) ---------------- ---------------- ---------------- £'000 £'000 £'000 ---------------- ---------------- ---------------- (Loss)/profit for the (1,296) 634 1,289 financial period - Group - Associate (77) - (201) ---------------- ---------------- ---------------- (1,373) 634 1,088 Gain/(loss) on foreign 2,017 1,169 (1,807) currency translation ---------------- ---------------- ---------------- Total recognised gains for 644 1,803 (719) the period Prior year adjustment (see 1,277 - - note 4) ---------------- ---------------- ---------------- Total recognised gains since last annual report and accounts 1,921 1,803 (719) ---------------- ---------------- ---------------- Unaudited Unaudited Audited 31 Oct 2001 31 Oct 2000 30 April 2001 (Restated) (Restated) ---------------- ---------------- -------------- £'000 £'000 £'000 ---------------- ---------------- -------------- Fixed assets Intangible 207,512 120,131 188,804 Tangible 9,139 11,760 9,107 Associates 1,667 - 1,016 Investments 850 1,310 850 ---------------- ---------------- ---------------- 219,168 133,201 199,777 Current assets Stock and WIP 6,966 7,524 5,286 Debtors 54,416 45,452 56,701 Investments 49 - 297 Short term deposits 7,930 - 9,473 Cash at bank 11,352 5,953 16,578 ---------------- ---------------- ---------------- 80,713 58,929 88,335 ---------------- ---------------- ---------------- Current liabilities Bank borrowings (7,057) (12,103) (7,271) Hire purchase (240) (449) (266) Amounts falling due (79,757) (57,081) (82,660) within one year ---------------- ---------------- ---------------- (87,054) (69,633) (90,197) ---------------- ---------------- ---------------- Net current liabilities (6,341) (10,704) (1,862) Creditors: amounts falling due after one year Hire purchase (169) (471) (201) Other creditors (3,576) (462) (6,194) Provisions for liabilities and charges (43,086) (58,120) (41,114) ---------------- ---------------- ---------------- (46,831) (59,053) (47,509) ---------------- ---------------- ---------------- Net assets 165,996 63,444 150,406 ---------------- ---------------- ---------------- Called-up share capital 28,816 26,725 27,979 Share premium account 54,814 28,276 44,837 Shares to be issued 67,177 - 63,158 Reserves 14,729 8,358 14,085 Minority interest 460 85 347 ---------------- ---------------- ---------------- Capital employed 165,996 63,444 150,406 ---------------- ---------------- ---------------- Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 Oct 2001 31 Oct 2000 30 April 2001 £'000 £'000 £'000 -------------- -------------- -------------- Net cash inflow/(outflow) from operating activities 7,235 8,377 32,906 Returns on investments and servicing of finance (331) (273) (1,190) Taxation (3,770) (1,801) (3,651) Capital expenditure and financial investments (2,854) (2,638) 8,806 Acquisitions and disposals (5,823) (20,775) (33,485) Equity dividends paid - (798) (799) --------------- --------------- -------------- Cash (outflow)/inflow before management of liquid resources and financing (5,543) (17,908) 2,587 Management of liquid funds 1,791 - (9,473) Financing (5,039) 22,296 23,571 --------------- --------------- --------------- (Decrease)/increase in cash in the period (8,791) 4,388 16,685 --------------- --------------- -------------- Reconciliation of operating profit/to net cash inflow/(outflow) from operating activities Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 October 2001 31 October 2000 30 April 2001 £'000 £'000 £'000 ------------------ -------------------- ----------------- Operating profit 2,572 3,295 7,883 Depreciation 1,886 1,571 3,322 Intangible software 299 - 150 licence Goodwill amortisation 11,080 5,842 14,161 (Increase)/decrease (1,638) (595) 1,707 in stock (Increase)/decrease (1,164) 1,896 (4,363) in debtors (Decrease)/increase (5,800) (3,120) 10,289 in creditors Exchange movement - (490) - Profit on disposal of - (22) (243) fixed assets ------------- -------------- ------------ Net cash inflow from operating activities 7,235 8,377 32,906 ------------- -------------- ------------ 1. The financial information contained in this document does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The accounts have been prepared using accounting policies consistent with those set out in the most recent audited financial statements as amended by the compliance with FRS 19 'Deferred Tax' (see note 4). Statutory accounts for the year to 30 April 2001 have been filed with the registrar of companies. The Auditors have reported on those accounts; their report is unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Acquisitions Turnover Profit £'000 £'000 ------------- ---------- Parsec Systems Ltd 1,676 764 Didgicom Ltd 239 37 ------------- ---------- 1,915 801 ------------- ---------- 3. Taxation £'000 ---------- On the profit on ordinary activities for the period UK corporation tax 1,872 Overseas taxation 1,584 Deferred tax - foreign (263) Originating and reversal of timing differences 31 ---------- 3,224 ---------- 4. Deferred Tax The Group has implemented the requirements for accounting for Deferred tax under FRS 19. The figures in the primary statements have been re-stated to reflect the new policy. The effect in the change in policy is summarised below: October 2001 October 2000 April 2001 £'000 £'000 £'000 ------------- ------------- ------------- Profit and loss account - Tax (charge)/credit (31) - 10 ------------- ------------- ------------- (Decrease)/increase in net profit (31) - 10 after tax ------------- ------------- ------------- Balance Sheet - Debtors 694 765 662 - Provisions 562 512 625 ------------- ------------- ------------- Increase in net assets 1,256 1,277 1,287 ------------- ------------- ------------- 5. Dividends £'000 --------- Proposed Nil ------------- 6. Reconciliation of net cash flow to movement in net debt £'000 Decrease in cash in period (8,791) Cash outflow from decrease in bank loan and financing 5,233 Cash inflow from increase in liquid resources (1,543) ---------- Change in net debt in period (5,101) Cash acquired with subsidiaries 3,521 Cash sold with disposals (3,252) Receipt of shares (248) Net funds at 1 May 2001 13,611 ---------- Net funds at 31 October 2001 8,531 ---------- 7. Analysis of net debt 1 May 2001 Acquisitions Disposals Non Cash Cash Flow 31 Oct 2001 £'000 £'000 £'000 £'000 £'000 £'000 Cash at 16,578 3,521 (3,252) - (5,495) 11,352 bank and in hand Bank (429) - - - (3,296) (3,725) overdrafts ---------- (8791) ---------- Bank loans (4,999) - - - 1,665 (3,334) due after one year Bank loans (6,842) - - - 3,510 (3,332) due within one year Finance (467) - - - 58 (409) leases ---------- 5,233 ---------- Short - 9,473 - - - (1,543) 7,930 term deposits Current 297 - - (248) - 49 asset investment ----------- ----------- ---------- -------- ----------- ----------- 13,611 3,521 (3,252) (248) (5,101) 8,531 ----------- ----------- ---------- -------- ----------- ----------- 8. The (loss)/earnings per share has been calculated on the net loss of £ 1,373,000 (2000: profit £634,000) and the average number of shares in issue of 282,904,502 (2000: 261,103,833) and the weighted average number of shares (adjusted for dilution) of 292,648,520 (2000: 265,385,655). The adjusted earnings per share has been based on the adjusted net profit (excluding goodwill amortisation and (loss)/profit on sale/closure of discontinued operations and after net interest) of £9,790,000 (2000: £ 6,125,000). Introduction We have been instructed by the Company to review the financial information for the six months ended 31 October 2001, set out on pages 7 to 13, and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2001. Arthur Andersen Chartered Accountants 180 Strand London WC2R 1BL 4 December 2001
UK 100

Latest directors dealings