Interim Results

Iomart Group PLC 16 August 2000 iomart Group plc Interim results for the six months ended 30 June 2000 iomart Group plc ('iomart'), the Glasgow based telecommunications and internet services business, presents its consolidated interim results, which include the results of its subsidiary, iomart Limited, for the six month period ended 30 June 2000. Financial Highlights * Six month turnover of £1.53 million, on target * Loss before tax of £1.61 million, less than anticipated * June 2000 monthly access minutes 100% up from December 1999 * Number of business web sites paying recurring subscriptions up to 1250 at period end, 34% with e-commerce capability * £19 million net raised from new investors following successful AIM flotation in April 2000 Business Development Highlights * Launch of ADSL broadband services announced * Strategic partnership agreed with Sendmail Inc for provision of secure and reliable business class e-mail * Madasafish portal enhanced with introduction of new content partnerships * New unmetered access services to be launched shortly * Staff numbers increased from 76 at 31 December 1999 to 126 at 30 June 2000 * Glasgow office moved to new purpose built facility Angus MacSween, Chief Executive Officer, commented : - 'iomart has made strong progress. The numbers of users for both ISP and web hosting services have increased dramatically. Our overriding aim is to ensure our customers receive a very high quality service and we have continued to invest in our network and infrastructure, as well as successfully recruiting a pool of talented and experienced management. The imminent arrival of ADSL broadband services creates new opportunities for iomart in what we believe will be a rapidly growing market. We intend to position iomart as a significant player in bringing this exciting technology to the UK market.' 16 August 2000 Enquiries: iomart group plc Tel: 020 7457 2020 (today) Angus MacSween, Chief Executive 0141 931 7000 (thereafter) David Harrison, Finance Director College Hill Tel: 020 7457 2020 Chelsea Allen Email:chelsea.allen@collegehill.com iomart Group plc Interim Report Six Months Ended 30 June 2000 Chief Executive Officer's Review On 19 April 2000, shares in iomart Group plc were admitted to and issued on the Alternative Investment Market (AIM), raising £19 million net after expenses through a placing and public offer. These results represent our first as a publicly listed company. They also cover our first full six month period of revenue generation - although trading began late 1998, first customer revenues only started in August 1999. Financial Results Turnover for the six months ended 30 June 2000 was £1.53 million, of which £0.72 million was from the consumer market and £0.81 million from our business services. Analysed on a product basis, internet access contributed £0.94 million and web hosting £0.59 million. Total operating expenses amounted to £3.10 million. The main categories of expenditure were staff costs of £0.98 million, revenue share of £0.24 million, marketing costs of £0.62 million, depreciation/amortisation of £0.38 million and other costs of £0.88 million. Other operating income of £0.17 million relates to grants received. The operating loss for the period was £1.40 million and the loss before tax was £1.61 million. Loss per share was 4.1 pence on both a basic and a diluted basis. Cash balances at 30 June 2000 amounted to £16.88 million. Consumer Market Our user base has grown strongly during the period. The Madasafish ISP has recorded 105,000 new signups and the number of access minutes for the month of June 2000 at 29 million minutes is double the December 1999 figure. The user churn rate has remained relatively constant over the period, averaging 3.2%. Very significant progress has been made in establishing the Madasafish brand as a distinctive offering with high appeal to its target market. The Madasafish portal has benefited from several important new content partnerships, including those with travelstore.com for travel services, anytimenow.com for on-line diaries and fool.com for financial information. Following an agreement with yack.com, Madasafish launched its unique MadLive channel, effectively a 'Radio Times' guide to the internet, informing users about live internet events and providing access to them. The past few months have seen considerable turbulence in the UK ISP market caused by the appearance of 'unmetered' access offered at unsustainable prices. Whilst a number of major ISPs have announced their unmetered products, these have generally experienced considerable start up problems and have struggled to deliver reliable customer service. In our view many of these services are unlikely to be financially viable in the long term. iomart has chosen to delay its own unmetered service until it can be confident of delivering a suitable high quality product at a sensible price. An announcement on the launch of this product is due shortly. At the time of flotation, we outlined plans for an additional ISP, to be called 'Jings' and with a focus on regional content. However in light of the confusion surrounding the unmetered issue, we have chosen to delay this until the ISP market stabilises. A range of Premium Rate Services is also under development for launch shortly. Business Services We continue to work successfully with Virgin Net supporting their Virginbiz.net web-hosting offering targeted at the business market. We have also extended our involvement with Freeserve and will be supporting their new clearlybusiness.co.uk joint venture with Barclays Bank. At the end of June 2000, over 11,000 web sites for business customers had been created. Of these, we had 1250 sites paying recurring subscriptions, with the rate of monthly signups for such sites continuing to increase. Some 34% of our subscription sites had e-commerce capability. We anticipate significant growth in our own web hosting services. Following a reassessment of our branding, we have decided not to proceed with the Winbiz brand, preferring instead to use the iomart name for our business products. In June 2000, we announced an agreement with globalfarmers.com who are launching a new ISP and on-line trading platform targeted at the agricultural community. iomart will build and host the service, giving globalfarmers.com the benefit of iomart's world class internet infrastructure. Similar types of arrangements are in place with MRI Modems and 365 Corporation. We now offer co-location services in London and Edinburgh data centres. Several customers are already confirmed in advance of a full launch during third quarter 2000. We also announced a key strategic partnership with Sendmail Inc. focussing on business e-mail applications. Sendmail are the world leader in the provision of high volume, high security e-mail delivery. This partnership will provide iomart with access to a major e-mail ASP platform enabling us to attack the fast growing business mail outsourcing market. Broadband Launch During the period, we have worked with BT as one of the small number of trialists for the introduction of ADSL broadband services in the UK. Recently, we were pleased to announce the full commercial launch of our own ADSL service which will offer the benefits of this new technology to both our business and consumer markets, working through the iomart B2B channel and the Madasafish consumer brand respectively. We foresee rapid growth in the demand for ADSL services in the UK and plan to become a significant player in the provision of this technology. With the introduction of local loop unbundling in the UK during the next year, we will invest in our own ADSL infrastructure, ensuring that we remain at the forefront in this market. We are working with AboveNet to arrange joint co-location in a nation- wide spread of Points of Presence, giving iomart favourable access to a nation-wide Internet Protocol backbone (2.5 Gbps). Continued Recruitment We have been recruiting very actively during the period and have seen our workforce grow from 76 to 126 at June 2000 of whom 90 are based at our dedicated Net Centre in Stornoway. David Harrison joined the Board as our Finance Director in May 2000, bringing wide experience in international financial management, company acquisitions and business strategy. During the period we have been pleased to welcome a number of talented and experienced senior managers and continue to seek further people of similar calibre. In July 2000, we moved our Glasgow office to a new purpose built 10,000 square feet facility at the West of Scotland Science Park. Strategic Update Our objective is for iomart to be an integrated telecommunications and internet services company with a substantial customer base and a scalable infrastructure that can support the delivery of a wide range of services, especially those reliant on broadband technology. Everything we do will be underpinned by our focus on high standards of customer care and quality of service. In the business market, we will use ADSL as the entry point to build long term customer relationships to which we can add web services, other telephony services and ASP applications such as the Sendmail e-mail platform and Microsoft packages. Our consumer activities will concentrate on growing the Madasafish brand including the introduction of effective unmetered services, offered in combination with other telephony products. Prospects Our marketplace has experienced considerable change and upheaval over the past few months and we expect this to continue for the foreseeable future. Against this background, we are confident that iomart has the strength and flexibility to grow rapidly, particularly in our range of services to business customers. iomart is totally committed to taking advantage of the significant opportunities in our chosen markets. Angus MacSween Chief Executive Officer 16 August 2000 iomart Group plc Consolidated Profit and Loss Account Six months ended 30 June 2000 6 months ended 18 months ended 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 TURNOVER: continuing 1,530 - 283 operations Operating expenses (3,101) (709) (2,533) Other operating income 170 7 151 OPERATING LOSS: continuing (1,401) (702) (2,099) operations Interest received 215 14 21 Charge on early redemption (333) - - of loan Interest payable and (88) (24) (85) similar charges Net interest (206) (10) (64) LOSS ON ORDINARY (1,607) (712) (2,163) ACTIVITIES BEFORE TAXATION Tax on loss on ordinary - - - activities LOSS ON ORDINARY (1,607) (712) (2,163) ACTIVITIES AFTER TAXATION FOR THE PERIOD Loss per ordinary share (pence) Basic (4.1p) (2.8p) (11.0p) Diluted (4.1p) (2.8p) (11.0p) There have been no recognised gains and losses attributable to the shareholders other than the loss for the current financial period and accordingly, no Statement of Total Recognised Gains and Losses is shown. Comparative information for the 6 months ended 30 June 1999 has been extracted from the management accounts of iomart Limited, and for the 18 months ended 31 December 1999 from iomart Limited statutory accounts. iomart Group plc Consolidated Balance Sheet 30 June 2000 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 FIXED ASSETS Tangible assets 1,555 1,083 1,291 Intangible assets 130 265 198 1,685 1,348 1,489 CURRENT ASSETS Debtors 857 307 370 Cash at bank and in hand 16,884 360 475 17,741 667 845 CREDITORS: amounts falling (1,999) (647) (1,387) due within one year NET CURRENT ASSETS/ 15,742 20 (542) (LIABILITIES) TOTAL ASSETS LESS CURRENT 17,427 1,368 947 LIABILITIES CREDITORS: amounts falling (517) (580) (1,610) due after more than one year 16,910 788 (663) CAPITAL AND RESERVES Called up share capital 538 1,500 1,500 Capital redemption reserve 1,200 - - Share premium account 18,942 - - Profit and loss account (3,770) (712) (2,163) TOTAL EQUITY SHAREHOLDERS' 16,910 788 (663) FUNDS Comparative information for 30 June 1999 has been extracted from the management accounts of iomart Limited, and for 31 December 1999 from iomart Limited statutory accounts. The results for the period ended 31 December 1999 are not statutory accounts. The profit and loss account for the period ended and the balance sheet at 31 December 1999 are an abridged statement of the full accounts of iomart Limited for that period, which have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. iomart Group plc Reconciliation of movements in shareholders' funds Six months ended 30 June 2000 6 months ended 18 months ended 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 Loss for the financial (1,607) (712) (2,163) period New share capital subscribed 19,180 1,500 1,500 Net increase/(reduction) in 17,573 788 (663) shareholders funds Opening shareholders funds (663) - - Closing shareholders funds 16,910 788 (663) Analysis of movements in shareholders' funds Six months ended 30 June 2000 Capital Share Profit Share redempti premium and loss on capita reserve account account l £ 000 £ 000 £ 000 £ 000 Loss for the - - - (1,607) financial period Shares redeemed (1,200) 1,200 - - New share capital 238 - 18,942 - subscribed Net (962) 1,200 18,942 (1,607) increase/(reduction) Opening balance 1,500 - - (2,163) Closing balance 538 1,200 18,942 (3,770) Comparative information for the 6 months ended 30 June 1999 has been extracted from the management accounts of iomart Limited, and for the 18 months ended 31 December 1999 from iomart Limited statutory accounts. iomart Group plc Consolidated Cash Flow Statement Six months ended 30 June 2000 6 months ended 18 months ended 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 Net cash outflow from (1,066) (453) (1,001) operating activities Returns on investments and servicing of finance Bank interest received 215 14 21 Charge on early redemption (333) - - of loan Bank and other loan (33) (1) (13) interest paid Finance lease and hire (55) (23) (72) purchase interest paid Net cash outflow from returns on (206) (10) (64) investments and servicing of finance Capital expenditure Payments to acquire (230) (22) (215) tangible fixed assets Payments to acquire - (282) (282) intangible fixed assets Net cash outflow from (230) (304) (497) capital expenditure Cash outflow before (1,502) (767) (1,562) financing Financing Issue of share capital 19,180 1,500 1,500 New loans - - 1,000 Repayment of loans (1,000) - - Repayment of hire purchase (269) (373) (463) and finance leases Net cash inflow from 17,911 1,127 2,037 financing Increase in cash in the 16,409 360 475 period Comparative information for the 6 months ended 30 June 1999 has been extracted from the management accounts of iomart Limited, and for the 18 months ended 31 December 1999 from iomart Limited statutory accounts. iomart Group plc Notes to the Consolidated Cash Flow Statement Six months ended 30 June 2000 1. Reconciliation of operating loss to net cash outflow from operating activities 6 months 18 ended months ended 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 Operating loss (1,401) (702) (2,099) Depreciation 307 101 327 Amortisation of intangible 68 18 84 assets Increase in debtors (487) (307) (370) Increase in creditors 447 437 1,057 Net cash outflow from (1,066) (453) (1,001) operating activities 2. Reconciliation of net cash flow to movement in net debt 6 months 18 ended months ended 30 June 30 June 31 December 2000 1999 1999 £ 000 £ 000 £ 000 Increase in cash in period 16,409 360 475 Cash inflows/(outflows) from debt and lease financing 1,269 373 (537) Change in net debt from cash 17,678 733 (62) flows New hire purchase and finance (197) (1,163) (1,404) leases Opening net debt (1,466) - - Closing net funds/ (debt) 16,015 (430) (1,466) 3. Analysis of change in net debt At Other At 31December Cash non-cash 30 June 1999 flow changes 2000 £ 000 £ 000 £ 000 £ 000 Cash at bank and in 475 16,409 - 16,884 hand Bank loan (1,000) 1,000 - - Finance leases and (941) 269 (197) (869) hire purchase Total debt (1,941) 1,269 (197) (869) Net funds/ (debt) (1,466) 17,678 (197) 16,015 Comparative information for the 6 months ended 30 June 1999 has been extracted from the management accounts of iomart Limited, and for the 18 months ended 31 December 1999 from iomart Limited statutory accounts. iomart Group plc Accounting policies for the Consolidated Interim Statements Six months ended 30 June 2000 The interim statements are prepared in accordance with the accounting standards applicable at 31 December 1999, subject to the additional implications of new Financial Reporting Standards 15 and 16. The implementation of FRS 15 and 16 has had no effect on the results. The particular accounting policies adopted are described below. These interim statements do not comprise statutory accounts. Accounting convention The interim statements are prepared under the historical cost convention. Basis of consolidation iomart Group plc was incorporated on 28 February 2000 and on 14 March 2000 it acquired all of the issued share capital of iomart Limited by way of a share for share exchange. The group interim statements consolidate the interim statements of iomart Group plc and its subsidiary, iomart Limited, under merger accounting principles as if the company had always owned iomart Limited and as though iomart Group plc had always existed. There was no difference between the nominal value of the shares issued by the company and the nominal value of the shares acquired in the purchase of its subsidiary. Intangible fixed assets Software licences are capitalised as intangible assets and amortised over the period of the licence. Tangible fixed assets Depreciation is provided on cost in equal annual instalments over the estimated useful lives of the assets. The rates of depreciation are as follows: Short-term leasehold improvements 25% per annum Computer software and equipment Between 25% and 50% per annum Office equipment and vehicles 25% per annum Grants Amounts receivable as capital grants are treated as deferred income and credited to the profit and loss account by instalments on a basis consistent with the depreciation policy. Revenue grants are credited to the profit and loss account in line with the expenditure to which they relate. Deferred taxation Deferred taxation is provided on timing differences, arising from the different treatment of items for accounts and taxation purposes, which are expected to reverse in the future, calculated at rates at which it is estimated that tax will arise. Leases Assets obtained under finance leases and hire purchase contracts are capitalised at their fair value on acquisition and depreciated over their estimated useful lives. The finance charges are allocated over the period of the lease in proportion to the capital element outstanding. Operating lease rentals are charged to profit and loss account in equal annual amounts over the lease term. Development expenditure Development expenditure is charged to the profit and loss account as incurred. Copies are available for collection from the offices of Peel Hunt, 62 Threadneedle Street, London EC2R 8HP for the next 14 days.

Companies

Iomart Group (IOM)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today