1st Quarter Results
Intec Telecom Systems PLC
08 February 2005
8 February 2005
Intec Telecom Systems PLC
Unaudited results for the three months ended 31 December 2004
Good performance by Singl.eView acquisition drives 53% revenue increase;
continuing cost management brings strong cashflow and earnings ahead of budget
Intec Telecom Systems PLC ("Intec" or "the Company"), a global provider of
enterprise-level software and services, is pleased to announce its unaudited
results for the three months ended 31 December 2004 ("Q1 2005"). A strong first
reported quarter by Intec's recent Singl.eView acquisition, indicating excellent
progress in our ongoing turn around of this business, has increased revenues
over the comparable period in 2004 by 53%. Good cost control, despite investment
in the enlarged business, has delivered EBITDA1 earnings ahead of budget at £2.2
million and adjusted EPS of 0.28p.
In addition to these positive financial results, Intec is experiencing good
momentum in new business wins and high levels of activity in current pipeline
development, most notably several large, multi-product deals, each valued in
excess of $10 million, in late stages of finalisation.
HIGHLIGHTS
• Turnover of £23.9 million increased by 53% (3 months ended 31 December
2003 ("Q1 2004"): £15.6 million).
• Adjusted2 profit before tax of £1.2 million (Q1 2004: £1.6 million) after
continued investment in acquisitions and business development.
• Adjusted EPS of 0.28p (Q1 2004: 0.58p).
• Operating cash inflow of £3.5 million (Q1 2004: outflow of £0.1 million).
• Recurring revenue up 50% to £11.4 million (Q1 2004: £7.6 million).
• Loss before tax of £3.1 million (Q1 2004: loss of £0.8 million), after
depreciation and amortisation of goodwill and intangible assets of £5.2
million (Q1 2004: £2.9 million).
• Substantial increase in balance sheet strength with cash and cash
equivalent investments of £34.2 million (Q1 2004: £13.8 million).
• Gross margin reduced to 61% (Q1 2004: 73%) due largely to short-term
factors following the Singl.eView acquisition.
• Several important new contracts signed since the start of the financial
year.
• Customer installations reach 678 in 471 operators, with over 1,000 staff
now involved in development and delivery of solutions to customers.
"I am very pleased to report that the performance of the Singl.eView business
has exceeded our expectations and, combined with another solid quarter from the
core business, has allowed us to deliver both revenue and earnings ahead of our
budgets," said Intec's Executive Chairman, Mike Frayne. "Our results for the
first quarter of 2005, which for the first time include a full quarter's
contribution from the Singl.eView business acquired in August 2004, are not
directly comparable to any previous period. However, the first quarter of the
year can be the most unpredictable, and these results are therefore a very good
foundation for the rest of 2005."
"Our progress with Singl.eView is very pleasing, and the larger contracts we are
now winning underline the strong opportunities we see ahead," added Chief
Executive Kevin Adams. "Execution across the business is in line with or
exceeding our plans and the core business has not been distracted from its goals
by the demands of taking on a major new line of activity. Our committed revenue
forecast, prospect pipeline and activity levels for the rest of 2005 are also
ahead compared to a year ago, and with a number of large, multi-product deals in
progress we are confident that 2005 will be another successful year for Intec."
For further information:
Mike Frayne, Executive Chairman
Kevin Adams, CEO
Andrew Rodaway, Director of Marketing
Intec Telecom Systems PLC
+44 (0) 1483 745800
+44 (0) 7768 808082
andrew.rodaway@intecbilling.com
www.intecbilling.com
Edward Bridges/James Melville-Ross/Cass Helstrip
Financial Dynamics
+44 (0) 20 7831 3113
intec@fd.com
1EBITDA - Earnings Before Interest, Tax, Depreciation and Amortisation are
stated before exceptional items of £0.3 million relating to the Singl.eView
acquisition, including restructuring costs and professional fees.
2Adjusted earnings- A reconciliation between adjusted profit before tax and the
loss before tax is shown on the financial highlights page.
Chairman's and CEO's Statement
Intec Telecom Systems PLC - Q1 2005
Overview
Intec is undergoing a period of transition, as we move from being a vendor of
several important point products to a tier one vendor supplying critical OSS/BSS
solutions to major companies. Our results for the first quarter, which include a
full contribution from Singl.eView, reflect this transition. While the headline
revenue and earnings numbers, and the turn around progress with Singl.eView, are
very encouraging, particularly given the investment in time and effort that goes
into the integration of a large acquired business, we are aware that the
underlying business model is changing. Not only are we a larger organisation,
the balance of revenue sources, which in core Intec has been very stable for
some time now, has shifted towards a greater contribution from major projects,
including some key contracts in the next generation services space. At the time
of writing we are finalising a major Singl.eView contract in Africa, which is
around twice the size of our previous largest deal, and several other deals of
similar size are in the pipeline. We consider this a very positive development,
but one that must be managed carefully as we move forward into 2005.
Operational review
In the first three months of our 2005 business year we secured 10 new licence
contracts, the majority with new name customers, representing important business
in all of our four operating regions, EMEA, North America, CALA and
Asia-Pacific. This brings our total of customers to 471, with 678 installations.
New customers were secured in nine countries, including the US, Saudi Arabia,
Bangladesh, Morocco, Israel, Ireland, Turkey, Thailand, and Australia. A notable
win was in Saudi Arabia with Saudi Telephone Corporation, our first OSS/BSS
client in the country, and the leading communications provider in the region.
With the changes due to the Singl.eView acquisition it is not possible to
directly compare the current results on a regional basis with the prior period,
as the geographical spread of the acquired business was quite different to Intec
previously, with a greater predominance of Singl.eView business in EMEA and
North America. However all areas have performed satisfactorily, with new
business wins signed and good development of their pipelines for 2005. Our
visible revenues against full year expectations are ahead of the figure at this
point a year ago, a very encouraging result given the much larger revenue
target. Intec continues to have a very effective sales and marketing
organisation, combined with good indirect channels through business partners and
system integrators.
New licences were signed for InterconnecT, Inter-mediatE, InterconnecT CABS,
Intec DCP, InterconnecT OR as well as a number of Singl.eView upgrades. We now
have over 210 InterconnecT family installations worldwide, over 140
Inter-mediatE installations, 68 Intec ASF DCP installations, over 135
InterconnecT CABS customers, and 67 Singl.eView customers. During Q1 we ran
highly successful User Conferences in our EMEA, Asia-Pacific and CALA regions
with over 400 delegates attending the events.
Products
Intec continues its policy of substantial investment in its products and
technology base. Intec now employs around 340 people in its Product Operations
organisation, based from a number of development centres. A large number of
staff are now based in relatively low cost locations such as Cape Town and
Brisbane, enabling Intec to deliver maximum value for its development spend.
Intec has carrier grade products in retail billing and customer management
(Singl.eView), interconnect billing and settlement (InterconnecT family),
convergent mediation (Inter-mediatE), service activation (Inter-activatE),
dynamic charging (Intec DCP), content partner management (InterconnecT CPM), and
optimised routing (InterconnecT OR), plus various additional solutions.
Telmate
In November 2004 Intec announced that it had invested £1.5 million in
Denmark-based OSS specialist Telmate. Telmate, which currently has a
distribution agreement with Intec, has developed a strong capability in
providing software for the management and routing optimisation of wholesale
telecoms traffic. These capabilities are complementary to Intec's current market
leading position in intercarrier billing systems and, as part of the new
agreement, will be sold as part of Intec's InterconnecT range. Intec has already
integrated Telmate products with its own systems, and has secured a contract
approaching £500,000 in value with a European carrier, under its current
distribution agreement.
Staff and infrastructure
Intec's policy is to locate sales and support staff near to the customers they
serve, and to develop and support products from the most effective locations.
Our Regional Centres are in Woking, UK; Atlanta, US; Sao Paulo, Brazil; and
Kuala Lumpur, Malaysia. We also have sales support offices in just over 20
additional locations. Staff numbers at the end of the quarter stood at 1,392,
compared with 672 a year ago. Around 620 staff were acquired with Singl.eView.
The balance of staff expertise in Intec is now geared towards the delivery of
projects to customers, with over 1,000 people now directly involved in the
development, implementation and support of our technology. This, combined with
Intec's expertise in installing almost 700 systems in over 70 countries, gives
us an ability that we believe is the equal of any comparable supplier to tackle
major OSS/BSS projects. We are therefore carefully tracking and developing our
resource requirements in the light of the business opportunities we see ahead to
ensure that we continue to meet our customer delivery commitments and achieve
the high levels of customer satisfaction and retention that we have historically
enjoyed. Our regional structure also allows us to position these resources close
to our customers and to build a business model which is appropriate for the
territories we focus on.
Financial analysis
Revenue for the period at £23.9 million was up 53% over the equivalent period in
2004 (£15.6 million). Of the £23.9 million revenue, Singl.eView contributed £9.7
million, slightly ahead of expectations at this stage. The previous Intec
standalone business contributed £14.2 million which, while slightly behind the
very strong first quarter experienced in 2004, was in line with management
expectations. Adjusted profit before tax is slightly lower at £1.2 million (Q1
2004: £1.6 million), due in part to higher costs incurred in transitioning to a
larger business.
Adjusted earnings after tax, excluding a charge of £4.0 million for amortisation
of goodwill, were £0.8 million (Q1 2004: £1.2 million) representing adjusted EPS
of 0.28p (Q1 2004: 0.58p). These figures are ahead of internal budgets due to
ongoing cost saving programmes in many areas.
New licence sales, at £3.5 million, or 15% of turnover, were steady compared to
the previous period, reflecting the normal pattern of sales in a first quarter.
Recurring revenues at £11.4 million are up 50%, reflecting both a steadily
growing customer base and low customer churn in the core business as well as the
contribution from Singl.eView. Professional services income increased strongly
to £9.1 million, up 94% as a result of the bias towards major projects in
Singl.eView, as well as ongoing good project and milestone completions in Intec.
All regions made satisfactory contributions in the period, with EMEA
contributing 50% of turnover, North America 26%, CALA 7% and Asia-Pacific 17%.
With the acquisition of Singl.eView, gross margin decreased to 61% (Q1 2004:
73%). Some reduction of gross margin is to be expected with the acquisition of
Singl.eView and the resulting growth in the proportion of revenue derived from
professional services. However, gross margin in Q1 has been further impacted by
the run out of low margin inherited contracts, and the initial low level of
utilisation in the acquired professional service group, combined with ongoing '
proof of concept' projects which we expect to deliver new business in the near
future. As a result of current and expected contracts wins, we believe that
gross margin will improve during the course of the year.
All key operating costs rose compared to the smaller business of last year.
Distribution costs rose 65% to £4.6 million as a result of an expanded sales
group, increased commission payments from higher sales and the generally higher
costs associated with bidding major projects. Total administrative costs
increased 41% to £13.3 million, with increases coming from higher goodwill
amortisation and depreciation charges following the Singl.eView acquisition.
There was a gain on foreign exchange translation differences of £0.7 million.
Development expenditure was up 30% at £3.9 million, a very satisfactory result
given the growth in overall revenues of 52%, reflecting the growing maturity of
Intec's business model. The increase comes from a broader product portfolio,
particularly Singl.eView, plus ongoing investment in new versions of core
products. Goodwill amortisation charges have increased from £2.3 million in Q1
2004 to £4.0 million in the current period, reflecting additional goodwill
amortisation from the acquisition of Singl.eView.
Operating cash inflow of £3.5 million in Q1 represents a very satisfactory
result for a period of investment in new products, acquisition integration and
increased working capital expenditure in the enlarged business. Cash and cash
investments at £34.2 million have increased substantially by £20.4 million since
31 December 2003 as a result of both operating cash inflow and new money raised
in conjunction with the Singl.eView acquisition.
Outlook
Intec continues to develop good market demand for its core products, as well as
a growing pipeline for its recent acquisition, of Singl.eView. We believe that
customers are investing again in new systems and legacy system replacements.
Intec is well positioned to benefit from both trends. Competition for new
business remains strong, yet we are winning substantial new multi-product
contracts, and the Board is confident that 2005 will be another year of success
for the enlarged business.
Mike Frayne, Executive Chairman, and Kevin Adams, CEO.
7 February 2005
FINANCIAL HIGHLIGHTS
3 months ended 31 December 2004
Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
Note 2004 2003 2004
£000 £000 £000
TURNOVER 23,860 15,631 68,828
Adjusted profit before tax (i) 1,211 1,553 8,277
EBITDA before exceptional items (ii) 2,184 2,171 10,667
Operating loss (3,328) (768) (1,369)
Basic loss per share (1.17) p (0.53) p (0.80) p
Adjusted earnings per share (iii) 0.28 p 0.58 p 3.57 p
Notes to the Financial Highlights:
(i) Loss before tax (3,144) (753) (1,187)
Amortisation of goodwill and other 4,012 2,306 8,762
intangibles
Exceptional items 343 - 702
Adjusted profit before tax 1,211 1,553 8,277
(ii) Adjusted profit before tax 1,211 1,553 8,277
Net interest income (184) (15) (182)
Depreciation 1,157 633 2,572
EBITDA before exceptional items 2,184 2,171 10,667
(iii) Adjusted earnings per share calculation
based on the following adjusted
earnings after tax:
Loss after tax (3,508) (1,102) (1,737)
Amortisation of goodwill and
other intangible assets 4,012 2,306 8,762
Exceptional items 343 - 702
Adjusted earnings after tax 847 1,204 7,727
KEY CUSTOMER DATA
31 December 30 September 31 December
2004 2004 2003
Number Number Number
Cumulative:
Contracted customer base 471 465 396
Total contracted installations 678 668 563
CONSOLIDATED PROFIT AND LOSS ACCOUNT
3 months ended 31 December 2004
Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
Note 2004 2003 2004
£000 £000 £000
TURNOVER 2 23,860 15,631 68,828
Cost of sales (9,222) (4,141) (19,550)
GROSS PROFIT 14,638 11,490 49,278
Distribution costs (4,649) (2,823) (13,068)
Administrative expenses:
Development expenditure (3,914) (3,017) (11,494)
Amortisation of goodwill and other intangible (4,012) (2,306) (8,762)
assets
Exceptional administrative expenses (343) - (702)
Other administrative expenses (5,048) (4,112) (16,621)
Total administrative expenses (13,317) (9,435) (37,579)
GROUP OPERATING LOSS (3,328) (768) (1,369)
Interest receivable and similar income 224 43 287
Interest payable and similar charges (40) (28) (105)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (3,144) (753) (1,187)
Tax charge on loss on ordinary activities 3 (364) (349) (550)
RETAINED LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION (3,508) (1,102) (1,737)
Loss per share - basic 4 (1.17)p (0.53)p (0.80) p
Earnings per share - adjusted 4 0.28 p 0.58p 3.57 p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
3 months ended 31 December 2004
Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Loss for the period (3,508) (1,102) (1,737)
Exchange translation differences arising on
foreign currency net investments (1,260) (828) (868)
Total recognised losses during the period (4,768) (1,930) (2,605)
CONSOLIDATED BALANCE SHEET
31 December 2004
Unaudited Unaudited Audited
31 December 31 December 30 September
Note 2004 2003 2004
£000 £000 £000
FIXED ASSETS
Intangible assets 100,222 66,797 103,459
Tangible assets 7,430 4,227 7,530
Investments 5 5 6
107,657 71,029 110,995
CURRENT ASSETS
Stocks - 3 -
Debtors 5 37,531 23,513 40,634
Investments 13,428 2,354 3,966
Cash at bank and in hand 20,751 11,482 28,216
71,710 37,352 72,816
CREDITORS: amounts falling due within one year 6 (10,113) (7,921) (8,962)
NET CURRENT ASSETS 61,597 29,431 63,854
TOTAL ASSETS LESS CURRENT LIABILITIES 169,254 100,460 174,849
CREDITORS: amounts falling due after
more than one year 7 (2,831) (33) (2,817)
PROVISIONS FOR LIABILITIES AND CHARGES 8 (2,935) (1,984) (3,403)
ACCRUALS AND DEFERRED INCOME 9 (26,006) (10,555) (26,399)
TOTAL NET ASSETS 137,482 87,888 142,230
CAPITAL AND RESERVES
Called up share capital 10 3,000 2,101 2,998
Share premium account 10 160,480 239,347 160,462
Merger reserve 10 6,768 6,768 6,768
Own shares 10 (95) (481) (95)
Foreign exchange reserve 10 (3,114) (1,814) (1,854)
Profit and loss account 10 (29,557) (158,033) (26,049)
EQUITY SHAREHOLDERS' FUNDS 137,482 87,888 142,230
RECONCILIATION OF MOVEMENT IN CONSOLIDATED SHAREHOLDERS' FUNDS
3 months ended 31 December 2004
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Loss for the financial period (3,508) (1,102) (1,737)
Other recognised losses relating to the period (1,260) (828) (868)
Issue of share capital net of associated expenses 20 685 55,316
Decrease in contingent consideration - (236) (236)
Increase in own shares - (386) -
(Decrease)/increase in shareholders' funds (4,748) (1,867) 52,475
Opening shareholders' funds 142,230 89,755 89,755
Closing shareholders' funds 137,482 87,888 142,230
CONSOLIDATED CASH FLOW STATEMENT
3 months ended 31 December 2004
Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
Note 2004 2003 2004
£000 £000 £000
Net cash inflow/(outflow) from operating (i) 3,541 (142) 4,595
activities
Returns on investments and servicing of finance
Interest received 215 43 288
Interest element of finance lease rental payments (8) (7) (83)
Interest paid and similar items (6) (21) (23)
201 15 182
Taxation
Overseas taxation paid (187) (412) (1,123)
Capital investment
Payments to acquire tangible fixed assets (1,194) (462) (2,367)
Proceeds on disposal of fixed assets 16 - -
(1,178) (462) (2,367)
Acquisitions
Investment in subsidiaries (1,545) - (42,567)
Net cash acquired with subsidiaries 1,532 - 1,354
(13) - (41,213)
Cash inflow/(outflow) before management of
liquid resources and financing 2,364 (1,001) (39,926)
Use of liquid resources
Decrease in cash investments/term deposits 1,677 3,262 1,652
Financing
Issue of ordinary share capital 20 62 56,840
Share issues costs charged to the share premium
Account - - (1,760)
Loan - - 2,223
Capital element of finance lease rental payments (44) (36) (152)
Increase in cash in the period (ii),(iii) 4,017 2,287 18,877
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
3 months ended 31 December 2004
Unaudited Unaudited
3 months 3 months Audited
ended ended Year ended
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
(i) Reconciliation of operating loss to net cash inflow/
(outflow) from operating activities
Operating loss (3,328) (768) (1,369)
Depreciation 1,157 633 2,572
Amortisation of goodwill and other intangible assets 4,012 2,306 8,762
Loss on disposal of fixed assets 15 2 45
(Increase)/decrease in stock - (2) -
(Increase)/decrease in debtors 3,456 (1,748) (6,300)
(Increase)/decrease in creditors (1,771) (562) 885
Net cash (outflow)/inflow from operating activities 3,541 (139) 4,595
(ii) Reconciliation of net cash flow to movement
in net funds
Increase in cash in the period 4,017 2,287 18,877
Net cash outflow/(inflow) from decrease/(increase) in
debt and lease financing 44 36 (2,071)
Net cash inflow from decrease in liquid resources (1,677) (3,262) (1,652)
Change in net funds resulting from cash flows 2,384 (939) 15,154
New finance leases - - (201)
Translation differences (343) (532) (383)
Movement in net funds 2,041 (1,471) 14,570
Net funds at 1 October 29,700 15,130 15,130
Net funds at 31 December / 30 September 31,741 13,659 29,700
(iii) Analysis of movement in net funds
' Audited Unaudited
1 October Exchange 31 December
2004 Cash flow movement 2004
£000 £000 £000 £000
Cash in hand and at bank 28,216 4,017 (618) 31,615
Debt due after one year (2,223) - - (2,223)
Finance leases (259) 44 - (215)
Term deposits 3,966 (1,677) 275 2,564
29,700 2,384 (343) 31,741
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
3 months ended 31 December 2004
1. BASIS OF PREPARATION
The interim financial information has been prepared in accordance with
accounting policies set out in, and consistent with, the Group's 2004 financial
statements except for the taxation charge for the period which is based on the
estimated charge for the year ending 30 September 2005.
The interim financial information is neither reviewed nor audited and does not
comprise statutory accounts for the purposes of Section 240 of the Companies Act
1985.
The abridged information for the year ended 30 September 2004 has been extracted
from the Group's statutory accounts for that period, which will be filed with
the Registrar of Companies following the 2004 Annual General Meeting. The
Auditor's report on the statutory accounts of the Group for that period was
unqualified and did not contain a Statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985.
The interim financial information was approved by the Board of Directors on 7
February 2005.
2. TURNOVER AND SEGMENTAL REPORTING
Turnover by origin Unaudited Unaudited
3 months ended 31 December 2004 3 months ended 31 December 2003
Inter- Inter-
Total segment External Total segment External
Turnover turnover turnover Turnover turnover turnover
£000 £000 £000 £000 £000 £000
United Kingdom 5,969 (6) 5,963 7,201 (224) 6,977
Continental Europe 5,573 (91) 5,482 1,145 - 1,145
Africa 95 - 95 44 - 44
Asia-Pacific 3,316 - 3,316 636 - 636
North America & Canada 9,256 (1,059) 8,197 7,018 (553) 6,465
Central and Latin America 807 - 807 364 - 364
25,016 (1,156) 23,860 16,408 (777) 15,631
Audited Year ended 30 September 2004
Inter-
Total segment External
Turnover turnover turnover
£000 £000 £000
United Kingdom 32,670 (1,849) 30,821
Continental Europe 5,889 - 5,889
Africa 266 - 266
Asia-Pacific 2,126 - 2,126
North America & Canada 29,600 (1,964) 27,636
Central and Latin America 2,090 - 2,090
72,641 (3,813) 68,828
2. TURNOVER AND SEGMENTAL REPORTING (continued)
Turnover by destination Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
United Kingdom 5,462 1,256 7,280
Continental Europe 4,504 3,408 11,030
Eastern Europe 717 1,013 4,599
Middle East 53 257 633
Africa 1,101 934 7,451
Europe, Middle East and Africa (EMEA) 11,837 6,868 30,993
Asia-Pacific 4,130 2,152 9,090
North America and Canada 6,167 4,319 20,756
Central and Latin America 1,726 2,292 7,989
Total turnover by destination 23,860 15,631 68,828
Turnover by activity Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Licence sales 3,453 3,416 19,123
Professional services income:
Implementation and migrations, consulting and 9,049 4,110 17,499
training
Hardware 6 6 466
Non-telecom custom network solutions - 549 1,651
9,055 4,665 19,616
Recurring income:
ASP Service 1,809 1,142 4,337
Volume upgrade licences 2,267 1,295 4,320
Support and maintenance fees 7,276 5,113 21,432
11,352 7,550 30,089
Total turnover by activity 23,860 15,631 68,828
Unaudited 3 months ended 31 December 2004
Profit/(loss) before tax
Exceptional
Before Amortisation of administrative After amortisation
amortisation goodwill expense of goodwill
of goodwill
£000 £000 £000 £000
United Kingdom (2,120) (253) - (2,373)
Continental Europe 3,414 (2,633) (169) 612
Asia-Pacific (52) - (37) (89)
Africa (247) - - (247)
North America & Canada 43 (1,126) (137) (1,220)
Central and Latin America 173 - - 173
1,211 (4,012) (343) (3,144)
Unaudited 3 months ended 31 December 2003
Profit/(loss) before tax
Exceptional
Before Amortisation of administrative After amortisation
amortisation goodwill expense of goodwill
of goodwill
£000 £000 £000 £000
United Kingdom (150) (688) - (838)
Continental Europe 50 (489) - (439)
Asia-Pacific 50 - - 50
Africa (15) - - (15)
North America & Canada 1,716 (1,129) - 587
Central and Latin America (98) - - (98)
1,553 (2,306) - (753)
Audited Year ended 30 September 2004
Profit/(loss) before tax
Exceptional
Before Amortisation of administrative After amortisation
amortisation goodwill expense of goodwill
of goodwill
£000 £000 £000 £000
United Kingdom 1,263 (1,402) (169) (594)
Continental Europe (363) (2,849) (37) (3,459)
Asia-Pacific 55 - - 55
Africa 240 - (137) 240
North America & Canada 7,216 (4,511) - 2,705
Central and Latin America (134) - (343) (134)
8,277 (8,762) (702) (1,187)
Net assets/(liabilities)
by origin Unaudited Unaudited Unaudited Unaudited Audited
31 December 31 December 31 December 31 December 30 September
2004 2004 2004 2003 2004
Excluding Including Including Including
unamortised Unamortised unamortised unamortised unamortised
goodwill goodwill goodwill goodwill goodwill
£000 £000 £000 £000 £000
United Kingdom 14,730 1,617 16,347 11,405 24,293
Continental Europe 11,455 48,123 59,578 11,106 54,793
Africa 249 - 249 (84) 208
Asia-Pacific 2,022 - 2,022 173 (5)
North America & Canada 9,216 49,477 58,693 64,717 62,395
Central and Latin 593 - 593 571 546
America
38,265 99,217 137,482 87,888 142,230
3. TAX CHARGE ON LOSS ON ORDINARY ACTIVITIES
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Current taxation:
UK corporation tax at 30% (2004: 30%) - 34 -
Overseas taxation 364 315 875
Prior year - - (305)
Total current tax 364 349 570
Deferred taxation:
Origination and reversal of timing differences - - (20)
Tax on loss on ordinary activities 364 349 550
4. (LOSS)/EARNINGS PER ORDINARY SHARE
Unaudited Unaudited Audited
3 months ended 3 months ended Year ended
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Basic loss (3,508) (1,102) (1,737)
Amortisation of goodwill and intangible assets 4,012 2,306 8,762
Exceptional items 343 - 702
Adjusted earnings 847 1,204 7,727
Number Number Number
Weighted average number of shares 299,828,929 208,436,038 216,147,912
Pence Pence Pence
Basic loss per ordinary share (1.17) (0.53) (0.80)
Amortisation of goodwill and intangible assets 1.34 1.11 4.05
Exceptional items 0.11 - 0.32
Adjusted earnings per ordinary share 0.28 0.58 3.57
Diluted loss/earnings per share is not presented in respect of outstanding share
options since none of the options are dilutive.
5. DEBTORS
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Trade debtors 21,104 15,071 22,532
Corporation tax recoverable 353 196 349
Overseas tax recoverable 286 88 342
Deferred tax - 243 266
Other debtors 850 186 1,308
Prepayments and accrued income:
Prepayments due within one year 3,902 1,607 4,076
Prepayments due after more than one year 605 596 583
Accrued income due within one year 10,431 5,526 11,478
37,531 23,513 40,634
6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Obligations under finance leases 95 144 128
Trade creditors 4,559 3,106 4,946
Corporation tax 915 1,187 915
Overseas tax 148 127 103
Other creditors including taxation and social security 3,928 3,258 2,870
Deferred/contingent consideration 468 99 -
10,113 7,921 8,962
7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Loan 2,223 - 2,223
Obligations under finance leases 120 33 131
Other creditors 488 - 463
2,831 33 2,817
8. PROVISIONS FOR LIABILITIES AND CHARGES
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Onerous lease commitments 1,891 1,984 2,223
Lease incentives 565 - 607
Other provisions 479 - 573
2,935 1,984 3,403
Onerous lease commitments disclosed above relate to future estimated losses on
sub-let or vacant lease commitments acquired with the Digiquant and Singl.eView
businesses. Amounts provided relate to the period up to the first option to
break on a property in Denmark and properties acquired with the Singl.eView
acquisition. The first option to break for the Denmark property is in 2011 and
accordingly the provision above includes the discounted fair value of the future
losses up to this point.
Lease incentives are in respect of rent free periods on certain properties
leased within the group. The provision is expected to be utilised over the life
of the lease which expires in 2014. The comparatives for the year ended 30
September 2004 have been reclassified to enable a consistent comparison with the
current quarter.
Other provisions disclosed above relate to future estimated costs to complete
certain ongoing legal matters in respect of Singl.eView, a potential repayment
of a grant previously received by Singl.eView and the costs of completing
certain onerous fixed price implementation contracts. These provisions are
expected to be utilised within one year.
9. ACCRUALS AND DEFERRED INCOME
Unaudited Unaudited Audited
31 December 31 December 30 September
2004 2003 2004
£000 £000 £000
Amounts falling due within one year
Accruals 8,358 4,635 8,939
Deferred income 17,648 5,920 17,460
26,006 10,555 26,399
10. STATEMENT OF MOVEMENTS ON RESERVES
Called Share Foreign Profit
up share Premium Merger Own exchange and loss
capital account Reserve shares reserve account Total
£000 £000 £000 £000 £000 £000 £000
At 1 October 2004 2,998 160,462 6,768 (95) (1,854) (26,049) 142,230
Issue of shares 2 18 - - - - 20
Retained loss - - - - - (3,508) (3,508)
Foreign exchange translation - - - - (1,260) - (1,260)
At 31 December 2004 3,000 160,480 6,768 (95) (3,114) (29,557) 137,482
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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