Final Results, Annual Report & Notice of Meeting

RNS Number : 2750C

IS Solutions PLC

27 June 2016

 

IS Solutions Plc

(the "Group" or "Company")

Final Results for the year ended 31 March 2016

and

Notice of Annual General Meeting

"Strong finish to the year achieving an uplift in revenue and profitability - dividend up 257%"

London: Monday 27 June 2016: IS Solutions Plc (Symbol: ISL) publishes the Group's Annual Report & Accounts for the year ended 31 March 2016  http://www.rns-pdf.londonstockexchange.com/rns/2750C_-2016-6-24.pdf  

The Chairman's letter and financial statements for the year ended 31 March 2016 can be read in full in the attached Report; a summary is provided below:

	Year ended 31 March 2016 audited	six-months ended 30 September 2015 unaudited*	15-months  ended 31 March 2015 audited	% period-on- period growth
Revenue -Continuing business (IS Solutions) -Celebrus Technologies (Celebrus)	£15.30m £3.30m	£7.04m £1.43m	£12.29m £0.55m (six weeks)
	£18.60m	£8.47m	£12.84m	45%
Gross profit	£9.21m	£3.96m	£4.67m	97%
GP margin	49.52%	46.75%	36.37%	+1315 bps
Underlying pre-tax profit**	£3.50m	£1.54m	£1.22m	187%
Adjusted fully diluted EPS	8.24p	3.36p	3.86p	113%
Total dividend for the year (includes proposed final dividend of 1.5p)	2.00p	0.50p	0.56p	257%
Strong cash generation - gross cash position	£5.00m	£2.09m	£0.09m	5456%
* The unaudited interim figures are as reported at the Half-year ended September 2015 released on 24 November 2015 ** Before amortisation of intangibles and share-based payment charges and 2015-acquisition costs of (£0.54m)
Ø Our successful business model has driven both top and bottom line increases for the Company with growth coming from its core data analytics business which has shown a substantial improvement period-on-period of 126%
Ø Our focus on the application of data to the fundamentals of our clients' business needs has led to substantial         growth in our project work and will fuel growth in our recurring revenue going forward
Ø The combination of the established and well respected brands of IS Solutions and Celebrus has opened up a        number of cross-selling opportunities and, at the same time, it has created a much more balanced business        with stronger higher margin license sales and progressively greater project and recurring revenue
	Year ended 31 March 2016 audited	six-months ended 30 September 2015 unaudited*	15-months  ended 31 March 2015 audited	% period on period growth
	£'000	£'000	£'000
Licence sales	2,974	1,448	1,927	54%
Projects	10,666	4,768	6,146	74%
Recurring income	4,969	2,254	4,766	4%
	£18,609	£8,470	£12,839	45%

Peter Simmonds, Chairman, IS Solutions commented: "Our business is driven totally by data - the Group is operating in a market where business intelligence and analytics is one of the fastest and exciting growing software markets and with our extensive technical 'know-how' and skills base we are able to further build on our current market position within the data solutions arena both in the domestic and overseas markets."

"Over the last twelve months, we have seen strong demand for our offering across both brands which has manifested in the number of major projects being secured with new and existing customers operating within the retail and financial services sectors.  In addition, these new projects, will generate recurring revenue, which is very reassuring in terms of cashflow and working capital.  It is encouraging to report that in 2016 demand continues for our services; we are in dialogue on a number of other exciting projects and this underpins our confidence in our pipeline of prospects."

Peter Kear, CEO added: "This is a very exciting time for the business - over the last five years the IS Solutions historic model has developed its core strategy to progressively build a data analytics business.  Our new market focus brings together existing fields of expertise and new skills to create a comprehensive and cohesive range of data solutions.  In order to reflect this step-change the Board has already announced its intention, subject to shareholder approval in July 2016, to rename the Company and rebrand it D4t4 Solutions Plc.  

"Our emphasis on data is an evolution of many years of experience in providing solutions for clients' data needs.  In recent years, this has taken shape around our growing capabilities in enabling our customers to profit from their data in terms of organising it, monetising it and gaining benefit from it.  The new areas of the business take us to the next level of data solutions and create further pull-through opportunities for the more established parts of the business."

"All of this bodes well for the future and the Board is confident that the Company can deliver another year of solid progress and will achieve current market expectations for the year ending 31 March 2017."

ENQUIRIES

IS Solutions Plc Peter Kear, Chief Executive Officer or Carmel Warren, Chief Financial Officer Tel: [phone] or email: [e-mail] finnCap  (Nominated Adviser & Broker) Ed Frisby/Emily Watts - Corporate Finance or Stephen Norcross - Corporate Broking Tel: [phone] TooleyStreet Communications (IR & Media Relations) Fiona Tooley: Tel: [phone] or email: [e-mail]

EDITOR'S NOTE

IS Solutions Plc Accreditation: ISO27001; PCI (DSS): Follow us at:  https://www.linkedin.com/company/is-solutions-plc.

Established in 1985, IS Solutions is a data solutions company focusing on three revenue streams, namely license sales, projects and recurring revenue.  The acquisition of Celebrus Technologies has further strengthened its position as a leading player in the field of Analytics which is now its fastest growing sector.  Specifically, IS Solutions specialises in bringing together a range of components from various technology vendors to create unified systems for end-user clients.  The business employs 120 staff, including 3 in the US and 28 in Chennai, India, who provide sales, product development and support skills. It also has a strong blue chip client base which includes Toyota and Toshiba as well as Saga, NHS, Compare The Market™, URENCO, Marks & Spencer and HSBC.

IS Solutions Plc

Summary of Financial Statements

of results for the year ended 31 March 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2016
	Year ended 31 March 2016		15-months ended 31 March 2015
	£'000s		£'000s
Continuing operations
Revenue	18,609		12,839
Cost of sales	(9,395)		(8,170)
Gross profit	9,214		4,669
Distribution costs	(3,958)		(2,451)
Administration expenses	(1,985)		(1,557)
Other operating income	22		25
Profit from operations	3,293		686
Investment income	1		4
Finance costs	(76)		(38)
Profit before tax	3,218		652
Tax	(278)		(120)
Profit for the period	2,940		532
Other comprehensive income
Gains on property revaluation	48		57
Total comprehensive income for the period attributable to equity holders of the parent	2,988		589
Earnings per share
Basic	8.17p		1.99p
Diluted	7.64p		1.92p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT for the year ended 31 March 2016
	Share Capital £'000	Share premium £'000	Revaluation Reserve £'000	Own Shares £'000	Equity reserve £'000		Retained earnings £'000		Total £'000
Balance at 1 January 2014	509	1,893	171	(2)				2,856	5,427
Total comprehensive income			57					532	589
Issue of share capital	199	4,677							4,876
Dividends paid								(285)	(285)
Purchase of own shares				(154)					(154)
Sale of own shares				76				(50)	26
Share-based payments								4	4
Deferred tax on outstanding share options						91			91
Contingent shares						1,289			1,289
Balance at 1 April 2015	708	6,570	228	(80)		1,380		3,057	11,863
Total comprehensive income			48					2,940	2,988
Issue of share capital	24	548							572
Dividends paid								(380)	(380)
Purchase of own shares				(291)					(291)
Sale of own shares				348				(297)	51
Share-based payments								38	38
Deferred tax on outstanding share options						206		155	361 361
Amortisation								49	49
Contingent shares						(646)		40	(606)
Balance at 31 March 2016	732	7,118	276	(23)		940		5,602	14,645

CONSOLIDATED BALANCE SHEET as at 31 March 2016
	2016 £'000	2015 £'000
Non-current assets
Goodwill	8,696	8,696
Other intangible assets	1,754	2,014
Property, plant and equipment	2,615	2,414
Deferred tax assets	792	698
	13,857	13,822
Current assets
Trade and other receivables	2,757	4,823
Cash and cash equivalents	5,007	95
	7,764	4,918
Total assets	21,621	18,740
Current liabilities
Trade and other payables	(5,045)	(4,427)
Tax liabilities	-	(59)
Borrowings	(397)	(454)
	(5,442)	(4,940)
Non-current liabilities
Borrowings	(1,183)	(1,537)
Deferred tax liabilities	(351)	(400)
	(1,534)	(1,937)
Total liabilities	(6,976)	(6,877)
Net assets	14,645	11,863
Equity
Share capital	732	708
Share premium account	7,118	6,570
Revaluation reserve	276	228
Own shares	(23)	(80)
Equity reserve	940	1,380
Retained earnings	5,602	3,057
Attributable to equity holders of the parent	14,645	11,863

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2016
	Year ended 31 March 2016 £'000	15-months ended 31 March 2015 £'000
Operating activities
Profit for the year	2,940	532
Adjustments for:
Depreciation of property, plant and equipment	178	228
Amortisation of intangible assets	260	24
Finance Income	(1)	(4)
Finance Expense	76	38
Share-based payments	38	4
Income tax expense	278	120
Operating cash flows before movements in working capital	3,769	942
Decrease in receivables	2,032	(924)
Increase in payables	618	(87)
Cash absorbed in operations	6,419	(69)
Income taxes paid	(69)	(139)
Net cash used in operating activities	6,350	(208)
Investing activities
Interest received	1	4
Interest paid	(76)	(38)
Purchase of property, plant and equipment	(332)	(171)
Acquisition of subsidiaries net of cash acquired	-	(1,369)
Net cash (used in)/from investing activities	(407)	(1,574)
Financing activities
Issue of new share capital	-	(37)
Dividends paid	(380)	(285)
Contingent shares issued	-	-
New borrowings	-	2,000
Repayment of borrowings	(411)	(212)
Purchase of own shares (net)	(240)	(128)
Net cash (used in)/from financing activities	(1,031)	1,338
Net increase/(decrease) in cash and cash equivalents	4,912	(444)
Cash and cash equivalents at start of year	95	539
Cash and cash equivalents at end of year	5,007	95

CERTAIN NOTES TO THE FINANCIAL STATEMENTS

GENERAL INFORMATION

IS Solutions Plc is a company incorporated in England and Wales and quoted on the AIM Market.  The address of its registered office and principal place of business is disclosed on the inside cover of the financial statements. The preliminary financial information does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006 but is derived from statutory accounts for the periods ended 31March 2016 and 31 March 2015, both of which are audited.  Where interim financial information has been presented, this is derived from the unaudited results for the half-year ended September 2015 released on 24 November 2015.  The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 31 March 2016. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRSs. The statutory accounts for the year ended 31 March 2016 will be delivered to the Registrar of Companies following the Company's Annual General Meeting and can be obtained from the investor section of the Company's website at www.issolutions.co.uk. Statutory accounts for the period ended 31 March 2015 have been filed with the Registrar of Companies. The auditor's report for the year ended 31 March 2016 was unqualified, did not include a reference to any matter to which the auditor drew attention by way of emphasis without qualifying their report and did not contain any statement under section 498(2) or (3) of the Companies Act 2006. BASIS OF PREPARATION The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations as adopted by the European Union and comply with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS.   GOING CONCERN The Group and Company's business activities, together with the factors likely to affect its future development, performance and position are set out above and the risks and uncertainties summarised below. The Group and Company have sufficient financial resources to cover budgeted future cashflows, together with contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Group and Company are well placed to manage their business risks successfully despite the current uncertain economic outlook. Having reviewed the future plans and projections for the business, the Directors believe that the Company and its group undertakings have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

BUSINESS AND GEOGRAPHIC SEGMENTS

Geographical segments: The Group operates entirely within the UK.

IFRS 8, Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and assess their performance. The information presented to the Chief Executive for the purpose of resource allocation and assessment of segment performance is focused on the type of product sold. The principal activity of the Group is split into three categories of product sold: License sales Project work Recurring revenues. No allocation of other income and costs to these categories is made because the Directors consider that any such allocation would be arbitrary. Any allocation of assets and liabilities to these categories would also be arbitrary. The reporting below is consistent with that provided to the Chief Executive.

Continuing operations 2016
	Licence sales	Project work	Recurring revenues	Total
	£'000's	£'000's	£'000's	£'000's
External sales	2,974	10,666	5,443	19,083
Adjustment for agency basis	-	-	(474)	(474)
Reported revenue	2,974	10,666	4,969	18,609
Segment result (gross profit)	2,076	4,584	2,554	9,214
Other operating costs and income				(5,921)
Investing and financing activities				(75)
Profit before tax				3,218
Major customers (over 10% of revenue) Customer 1	-	8,660	1,500	10,160

Continuing operations 2015
	Licence sales	Project work	Recurring revenues	Total
	£'000's	£'000's	£'000's	£'000's
External sales	1,927	6,146	6,048	14,121
Adjustment for agency basis	-	-	(1,282)	(1,282)
Reported revenue	1,927	6,146	4,766	12,839
Segment result (gross profit)	537	1,566	2,566	4,669
Other operating costs and income				(3,983)
Investing and financing activities				(33)
Profit before tax				652
Major customers (over 10% of revenue) Customer 1 Customer 2	249 238	4,313 689	544 1,437	5,106 2,364

The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2 of the Annual Report & Accounts for the year ended 31 March 2016.

EARNINGS PER SHARE
	2016	2015
Earnings, being the net profit attributable to equity holders of the parent (£'000)	2,940	532
	Number	Number
Weighted average of ordinary shares in issue	36,118,443	26,784,110
Weighted average of own shares	(125,237)	(111,542)
Weighted average for the purpose of basic earnings per share	35,993,206	26,672,568
Effect of dilutive share options	2,512,249	1,065,704
Weighted average for the purpose of diluted earnings per share	38,505,455	27,738,272

DIVIDENDS
	Year ended 31 March 2016	15-months ended 31 March 2015
Amounts recognised as distributions to equity holders (£'000) Final dividend for the period ended 31 March 2015 of 0.56p (2013: 1.12p) Interim dividend for the year ended 31 March 2016 of 0.50p (31 March 2015: nil)	198 182	285 -
	380	285
Proposed final dividend for the year ended 31 March 2016 of 1.5p	549	198
The Company is proposing a final dividend of 1.5p, which, subject to Shareholder approval at the Annual General Meeting which is being held on 20 July 2016, will be paid on 12 August 2016 to Shareholders on the Register at the close of business on 15 July 2016. The Ordinary shares become ex-dividend on 14 July 2016.  The proposed final dividend has not been included as a liability in the financial statements for the year ended 31 March 2016.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held on Wednesday, 20 July 2016 at 10am at the Group's Registered office: Windmill House, 91-93 Windmill Road, Sunbury on Thames, Middlesex, TW16 7EF.

ELECTRONIC COMMUNICATIONS

The Company is not proposing to bulk print and distribute hard copies of this announcement.  The full Annual Report and Financial Statements for the year ended 31 March 2016 is attached via the link and will be published later today on the Company's website at www.issolutions.co.uk together with the Notice convening the Company's 2016 Annual General Meeting.  Copies of these publications will be sent out to those shareholders who have elected to receive paper communications.  Copies can also be requested via [e-mail] or by writing to: The Company Secretary, IS Solutions Plc, Windmill House, 91-93 Windmill Road, Sunbury on Thames, Middlesex, TW16 7EF.  The Company's news updates, regulatory news, and financial statements, can also be viewed and downloaded from the Group's website.

FORWARD-LOOKING STATEMENTS

The Annual Report & Accounts were approved by the Board of Directors on 24 June 2016.  This document contains certain forward-looking statements which reflect the knowledge and information available to the Company during the preparation and up to the publication of this document.  By their very nature, these statements depend upon circumstances and relate to events that may occur in the future thereby involving a degree of uncertainty.  Therefore, nothing in this document should be construed as a profit forecast by the Company.

 

END

 

 

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