Interim Results- Replacement

Gresham Computing PLC 12 July 2001 The issuer has made the following amendment to the Interim Results announcement released today at 07:00 under RNS No 7844G. The amendments have been noted by an (*) symbol. There are no material changes to the content of the announcement. The full corrected version is shown below. Gresham Computing plc Interim results for the six months ended 30 April 2001 Gresham Computing plc, provider of enterprise software and solutions, announces its interim results for the six months ended 30 April 2001. The main results highlights are as follows: * Group turnover up 14% to £12.9m (2000: £11.2m) * Gross margins improved a further 5% to 45% (2000: 40%) * Disposal of SIM software testing business clears Group debt and gives financial stability * Strategic alliances with leading solutions providers have considerable ongoing potential Andrew Walton-Green, Chief Executive of Gresham commenting on the results said: 'We believe that the refocused Enterprise Solutions business and the strategic alliances entered into by the Enterprise Software business provide the group with considerable ongoing potential. Our focused strategy, coupled with our strengthened financial status positions the Group well to take advantage of the upturn in demand for our products and services.' For further information, please contact: Gresham Computing plc 01489 555522 Andrew Walton-Green, Chief Executive Dean Osman, Finance Director Square Mile BSMG Worldwide 020 7601 1000 Edward Macquisten Sally Lewis CHAIRMAN'S STATEMENT Group Results Group turnover for the six months ended 30 April 2001 was up 14% to £12.9m (2000: £11.2m). The gross margin improved from 40% to 45% over the same period in the previous year. The group recorded a significantly reduced operating loss before goodwill amortisation of £231,000 (2000: loss £2,254,000) and a loss before taxation of £721,000 (2000: loss £2,723,000). This resulted in a loss per share of 1.71 pence (2000: loss per share 6.06 pence). Operations We have continued our progress in the last six months towards becoming a product-led, sales-driven organisation focused on the provision of software and technology-led solutions to enterprise customers. On 25 June we completed the disposal of the first 50% plus one share of our SIM testing business for up to £6m. The proceeds of this disposal will help us to invest in and develop our on-going businesses from a sound financial platform. Enterprise Software Enterprise Software recorded turnover of £4.2m (2000:£3.8m) an increase of 11% compared with the equivalent period in 2000. This represents a small decrease of seven per cent in turnover compared with the second half of 2000. This is primarily a result of the slow-down in the US economy, which has affected our storage management business in the US. Our strategy of developing partner alliances and distribution arrangements has nevertheless continued and is beginning to bear fruit. In June we were delighted to report the signing of a key alliance with Tivoli to distribute part of our storage management software. This alliance gives us access to a much wider customer base for our storage products, although the impact of this strategic alliance is not expected to be significant until the fourth calendar quarter of this year. We continue to invest in our software products and are expanding and improving our sales resources and routes to market. Enterprise Solutions Enterprise Solutions recorded turnover of £2.2m (2000: £3.9m). The fall in turnover has arisen during a period when this business has been refocused around our core strengths of integration, migration and connectivity powered by our application integration technology Casablanca. This strategy is beginning to work and we are currently pursuing a number of opportunities based around Casablanca. Contract Staff and Recruitment This business contributed a solid performance in the first half of the year with net external turnover of £1.7m (2000: £1.7m). This division also provided £0.9m of resources to SIM during the first half, this turnover is eliminated as inter-group trading but will become external revenue following the disposal of SIM. Disposal of SIM Testing SIM continued its strong performance from the second half of 2000, recording turnover of £4.7m (2000: £1.8m). The growth in turnover has been achieved as a result of the successful implementation of its key account strategy. The completion of the disposal of the first 50% plus one share of SIM was completed on 25 June 2001. Prior to this date the Group results will include the full results of SIM. Subsequent to this date and until the completion of the disposal of the remaining shares, SIM will be accounted for as an associated undertaking and the Group's results will continue to include 50% of SIM's profit. The disposal proceeds for the first Tranche of SIM shares is for a minimum of £5.25m, which could increase to £6m based on the performance of SIM in the year ending on 31 October 2001. These proceeds have allowed the Group to repay all of its bank borrowings and will help us to invest in and develop our on-going businesses from a sound financial platform. The disposal of the initial Tranche of shares will result in a profit on disposal being recorded in the second half of the year of approximately £2m based on the minimum proceeds. The completion of the disposal of the remaining shares in SIM is contracted to complete by 30 June 2002 and the proceeds for these shares will be based primarily on revenue achieved by SIM in the year ended 30 October 2001. Board I was pleased to announce the appointment of Ted Aves to the board as a non-executive director in June. Ted brings considerable marketing experience to the board and played an important role in the change of strategy at SIM, which has been so successful. I would also like to take this opportunity to thank the staff for their continued support to the business. Outlook The disposal of SIM will not only realise a substantial capital profit but provide us with the resources to fully develop the potential of our software and solutions business. The market conditions being experienced by the ongoing businesses remain difficult, particularly in the US. However, the directors believe that the refocused Enterprise Solutions business and the strategic alliances entered into by the Enterprise Software business provide the group with considerable ongoing potential. We consider that this potential will start to be realised in the fourth quarter of the current year and will provide a strong platform for growth in 2002. Our focused strategy coupled with our strengthened financial status positions the Group well to take advantage of the upturn in demand for our products and services. S J Green 12 July 2001 For further information, please contact: Gresham Computing plc 01489 555522 Andrew Walton-Green, Chief Executive Dean Osman, Finance Director Square Mile BSMG Worldwide 020 7601 1000 Edward Macquisten Sally Lewis GRESHAM COMPUTING plc GROUP PROFIT AND LOSS ACCOUNT for the six months ended 30 April 2001 Six months ended 30 April 2001 Before Goodwill Notes goodwill amortisation £'000 £'000 £'000 TURNOVER Continuing 2 8,184 8,184 Discontinued 2 4,680 4,680 -------------------------------------- 12,864 12,864 Cost of sales 7,090 7,090 -------------------------------------- GROSS PROFIT 5,774 5,774 Administrative expenses 6,005 351 6,356 Administrative expenses - exceptional items 3 - - -------------------------------------- OPERATING (LOSS)/PROFIT (231) (351) (582) Continuing Operations (832) (160) (992) Discontinued Operations 601 (191) 410 Net interest payable (139) (139) -------------------------------------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (370) (351) (721) Taxation on result on ordinary activities - - -------------------------------------- LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (370) (351) (721) Dividends - non-equity interests 33 33 -------------------------------------- Retained loss for the year (403) (351) (754) ====================================== Basic and diluted earnings per share (pence) 4 (0.91) (0.80) (1.71) GRESHAM COMPUTING plc GROUP PROFIT AND LOSS ACCOUNT for the six months ended 30 April 2000(*) Six months ended 30 April 2000(*) Before Goodwill Notes goodwill amortisation £'000 £'000 £'000 TURNOVER Continuing 2 9,376 9,376 Discontinued 2 1,830 1,830 -------------------------------------- 11,206 11,206 Cost of sales 6,754 6,754 -------------------------------------- GROSS PROFIT 4,452 4,452 Administrative expenses 6,032 351 6,383 Administrative expenses - exceptional items 3 674 674 -------------------------------------- OPERATING (LOSS)/PROFIT (2,254) (351) (2,605) Continuing Operations (2,144) (160) (2,304) Discontinued Operations (110) (191) (301) Net interest payable (118) (118) -------------------------------------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,372) (351) (2,723) Taxation on result on ordinary activities (183) (183) LOSS ON ORDINARY ACTIVITIES -------------------------------------- AFTER TAXATION (2,189) (351) (2,540) Dividends - non-equity interests 33 33 -------------------------------------- Retained loss for the year (2,222) (351) (2,573) ====================================== Basic and diluted earnings per share (pence) 4 (5.23) (0.83) (6.06) GRESHAM COMPUTING plc GROUP PROFIT AND LOSS ACCOUNT for the year ended 31 October 2000 (*) Year ended 31 October 2000 (*) Before Goodwill Notes goodwill amortisation £'000 £'000 £'000 TURNOVER Continuing 2 18,792 18,792 Discontinued 2 4,533 4,533 -------------------------------------- 23,325 23,325 Cost of sales 13,796 13,796 -------------------------------------- GROSS PROFIT 9,529 9,529 Administrative expenses 11,357 703 12,060 Administrative expenses - exceptional items 3 1,489 1,489 -------------------------------------- OPERATING (LOSS)/PROFIT (3,317) (703) (4,020) Continuing Operations (3,371) (322) (3,693) Discontinued Operations 54 (381) (327) Net interest payable (253) (253) -------------------------------------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (3,570) (703) (4,273) Taxation on result on ordinary activities (267) (267) -------------------------------------- LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (3,303) (703) (4,006) Dividends - non-equity interests 66 66 -------------------------------------- Retained loss for the year (3,369) (703) (4,072) ====================================== Basic and diluted earnings per share (pence) 4 (7.76) (1.62) (9.38) GROUP BALANCE SHEET at 30 April 2001 at 30 at 30 at 31 April April October 2001 2000 2000 £'000 £'000 £'000 Fixed Assets Intangible assets 7,622 8,447 8,047 Tangible assets 2,521 3,141 2,737 --------------------------------- 10,143 11,588 10,784 --------------------------------- Current Assets Debtors 6,633 6,066 6,851 Cash at bank and in hand 289 105 343 --------------------------------- 6,922 6,171 7,194 Creditors: amounts falling due within one year 6,722 6,309 6,807 --------------------------------- Net Current Assets / (Liabilities) 200 (138) 387 --------------------------------- Total Assets Less Current Liabilities 10,343 11,450 11,171 --------------------------------- Creditors: amounts falling due after more than one year 3,582 2,403 3,658 --------------------------------- 6,761 9,047 7,513 ================================= Capital and reserves Called up share capital 2,714 2,664 2,714 Shares to be issued - 1,616 - Share premium account 5,232 5,230 5,232 Special reserve 313 313 313 Merger reserve 726 - 726 Profit and loss account (2,224) (776) (1,472) --------------------------------- 6,761 9,047 7,513 ================================= Shareholders' funds Equity interests 6,251 8,537 7,003 Non-equity interests 510 510 510 --------------------------------- 6,761 9,047 7,513 ================================= CASH FLOW STATEMENT for the six months ended 30 April 2001 Six months ended Year ended 30 April 30 April 31 October 2001 2000 2000 £'000 £'000 £'000 Operating loss (582) (2,605) (4,020) Depreciation 440 479 938 Provision for diminution in value of leasehold property - - 95 Amortisation 423 421 821 Profit on sale of fixed assets (2) (5) (22) Decrease in debtors 294 2,206 1,406 (Decrease) / Increase in creditors (23) 420 1,580 Foreign exchange movement 19 (41) (103) --------------------------------- Net cash inflow from operating activities 569 875 695 --------------------------------- Returns on investment and servicing of finance Net interest paid (139) (118) (253) Preference dividend paid - - - --------------------------------- (139) (118) (253) --------------------------------- Taxation paid (107) (164) (288) --------------------------------- Capital expenditure and financial investment Payments to acquire tangible fixed assets (115) (298) (503) Receipts from sale of tangible fixed assets 23 32 133 --------------------------------- (92) (266) (370) --------------------------------- Acquisitions Purchase consideration and - (63) (66) acquisition costs of subsidiary undertaking --------------------------------- - (63) (66) --------------------------------- Financing New long term loans - - 500 Receipts from finance lease facility 18 - - Repayments of finance leases and loans (347) (134) (276) --------------------------------- Net (outflow)/inflow from financing (329) (134) 224 --------------------------------- (Decrease)/increase in net cash in the period (98) 130 (58) Opening net cash (83) (25) (25) --------------------------------- Closing net cash (181) 105 (83) --------------------------------- NOTES TO THE INTERIM ACCOUNTS For the six months ended 30 April 2001 1.The interim accounts have been prepared on the basis of the accounting policies set out in the Group's 2000 statutory accounts and are unaudited. The interim financial statements do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2.Segmental Analysis Analysis of turnover by business segment Six months ended 30 Six months ended 30 April 2001 April 2000 Inter- Inter- Segment Segment External Segment Segment External turnover turnover turnover turnover turnover turnover £'000 £'000 £'000 £'000 £'000 £'000 Gresham Enterprise Solutions Enterprise Solutions 2,271 (33) 2,238 3,907 - 3,907 Contract Staff and Recruitment 2,623 (885) 1,738 2,315 (618) 1,697 ------------------------------------------------------ 4,894 (918) 3,976 6,222 (618) 5,604 Gresham Enterprise Software 4,208 - 4,208 3,772 - 3,772 SIM Testing 4,680 - 4,680 1,830 - 1,830 ------------------------------------------------------ 13,782 (918) 12,864 11,824 (618) 11,206 ====================================================== Analysis of turnover by source and destination Source Destination Six months Six months ended 30 ended 30 April April 2001 2000 2001 2000 £'000 £'000 £'000 £'000 United Kingdom 9,506 7,769 8,761 5,701 Europe 162 206 711 2,117 North America 2,474 2,479 2,680 2,626 Rest of the world 892 752 797 762 Inter-segment elimination (170) - (85) - ---------------------------------- 12,864 11,206 12,864 11,206 ================================== 3.Exceptional Items The exceptional costs incurred in the year ended 31 October 2000 comprise the costs of reorganising and restructuring the group; they include compensation for loss of office, redundancy costs, and professional fees related to group restructuring and employee matters. NOTES TO THE INTERIM ACCOUNTS For the six months ended 30 April 2001 4.Earnings per Share The calculation of earnings per ordinary share has been based on the loss attributable to ordinary shareholders, adjusted for preference dividends, of £754,000 (2000: loss £2,573,000, year ended 31 October 2000: loss £4,072,000) and on a weighted average number of shares of 44,078,778 (2000: 42,469,134, year ended 31 October 2000: 43,427,491). Diluted earnings per share are identical to basic earnings per share for all periods shown because potential diluting events would have the effect of reducing the loss per ordinary share. 5.Reconciliation of shareholders' funds Six months Year ended ended 30 April 30 April 31 October 2001 2000 2000 £'000 £'000 £'000 Loss for the period (721) (2,540) (4,006) Exchange difference on retranslation of net assets of subsidiary undertakings 2 (55) (92) ---------------------------- Total recognised gains and losses (719) (2,595) (4,098) Dividends (33) (33) (66) Shares issued - 1,307 2,925 Shares to be issued - (1,309) (2,925) ---------------------------- Total movements during the year (752) (2,630) (4,164) Opening shareholders' funds 7,513 11,677 11,677 ---------------------------- Closing shareholders' funds 6,761 9,047 7,513 ============================ 6.Discontinued Operations On 23 May 2001 the group entered an agreement to dispose of the entire issued share capital of SIM Group Limited to SQS Software Quality Systems AG. The initial consideration was at least £5.25m for 50% of the share capital plus one controlling share and deferred consideration principally based upon SIM Group's future revenues for the remaining shares. The disposal of SIM Group was approved by the shareholders at an extraordinary general meeting on 22 June 2001. Completion of the first tranche of the share sale agreement was on 25 June 2001. In accordance with FRS 3 'Reporting Financial Performance' as the disposal of SIM was completed within three months of the end of the half year, the results of SIM are shown as a discontinued operation. 7.An interim report will be sent to all shareholders by 25 July 2001 and will be available to all members of the public during normal business hours at the company's registered office: Sopwith House, Brook Avenue, Warsash, Southampton, SO31 9ZA.

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