Preliminary Results

ITIS Holdings PLC 11 June 2007 ITIS Holdings plc ('ITIS' or the 'Company') Preliminary Results for the year ended 31 March 2007 ITIS Holdings plc, a leading road traffic information and data specialist is pleased to announce its preliminary results for the year ended 31 March 2007. HIGHLIGHTS • Turnover up 30.3% to £18.79m (2006: £14.42m) • Full year profit before tax and exceptional items up 140% to £3.90m* (2006: profit of £1.63m) • Full year profit after tax and exceptional items up 361% to £9.45m (2006: profit of £2.05m) • Adjusted ** basic and diluted EPS** was up 271% to 5.2p (2006: 1.4p), after taking into account the deferred tax asset credit of 1.54p per share (2006: nil). Basic and diluted EPS up 357% to 9.6p (2006: 2.1p) • Year end cash balance remains strong at £11.57m (2006: £5.70m) • Company intends to pay a maiden dividend of 1.5p per share, subject to court and shareholder approval • UK business continued to experience growth with solid margins • Excellent progress made with Cellular Floating Vehicle Data (CFVD) with new projects in Australia, Czech Republic, Ireland and Spain • Successful disposal of NavTrak Limited enables the Company to focus solely on traffic information services Stuart Marks, Chief Executive of ITIS, commented: 'I am very pleased to report this strong set of results for the Company which demonstrate the success of our focussed strategy. We have delivered record turnover and profit levels and as the business continues to grow our confidence in our ability to generate cash has led us to propose a maiden dividend of 1.5p per share subject to court and shareholder approval. Whilst last year's revenues were almost entirely UK based, we are now expanding our business internationally and believe that we will start to see new revenue from these international activities to complement steady growth in the UK.' FINANCIAL OVERVIEW For the year ended 31st March 2007, turnover increased by 30.3% to £18.79m (2006: £14.42m). £4.62m of turnover for the year (2006: £4.24m) has been presented as discontinued following the sale on 26 March 2007 of NavTrak Limited ('NavTrak'), the Group's stolen vehicle tracking subsidiary, to Cobra Automotive Technologies spa. Turnover for the year ended 31st March 2007 arose predominantly from the Group's UK business, being traffic data sales to RDS-TMC customers, data sales to local and central Government and other third party organisations and from customers using the Group's various mobile telephone information services. On a Group basis, pre exceptional profit before taxation was £3.90m (2006: £1.63m), and £7.96m (2006: £1.96m) on a post exceptional basis. During the year a deferred tax asset of £1.49m was recognised (2006: £nil), which created a taxation credit of £1.49m in the profit and loss account. Adjusted basic and diluted earnings per share ** were up 271% to 5.2p (2006: 1.4p), after taking into account the deferred tax asset credit of 1.4p per share (2006: nil). Basic and diluted earnings per share were 9.6p (2006: 2.1p). NavTrak was sold for an initial cash consideration of £2.20 million. Additional cash consideration of up to £1.38 million may become receivable by the Group over the next five years, subject to NavTrak meeting certain trading conditions. Boosted by this cash receipt, the year-end cash balance strengthened to £11.57m (2006: £5.70m). The Company is proposing to pay a maiden dividend of 1.5p per share subject to court and shareholder approval. UK BUSINESS REVIEW For the period under review, virtually all of our revenues and profits were generated in the UK. Our growth has been driven from customers' demand to integrate real time traffic information into satellite systems to improve functionality and the driver experience. In particular, our early adoption of RDS-TMC, the international standard for the delivery of traffic to satellite navigation systems, has given us close relationships with eighteen car manufacturers. We are particularly pleased to have renewed contracts with BMW UK Limited for a five year period and with the Ford Motor Company for three years. We remain committed to developing our data quality and service coverage for TMC and recently signed deals with UTV Radio, Guardian Media Group (GMG) and others to acquire further capacity on FM radio to supplement the our national broadcast licence on Classic FM. Apart from competing for contract renewals and tendering for new contracts, from the few manufacturers we do not service, growth in this market is entirely dependant upon our customers selling more navigation units year on year. We believe that there are now over 550,000 devices receiving our TMC service and this number will continue to grow. Last month we simultaneously launched an enhanced mobile IVR (Interactive Voice Response) service and increased our presence on the web with a totally redesigned site at www.keepmoving.co.uk. Amongst many new options, the IVR now offers callers the opportunity to record their own eyewitness report. The Company provides its traffic information to twenty Personal Navigation Device (PND) and aftermarket manufacturers and to support mapping and routing organisations, such as the AA and Multimap. The PND market continues to attract new entrants of which ITIS will be supplying traffic to Thinkware Systems, a new entrant to the UK market, and Road Angel who are for the first time integrating traffic into their navigation products. The Company has a powerful real time and historic data set which supports all of the UK business. Outside of organic growth from its existing customers, the Company intends to build on several strong and long term relationships to develop service enhancements that will be valued by drivers whilst creating new revenue streams. INTERNATIONAL BUSINESS REVIEW ITIS enjoys a reputation for innovation, high levels of data quality and commercial success. All of these attributes have enabled us to develop our business outside the UK with local partners who can benefit from our technology and expertise. As we found when we launched the business in the UK, developing a new market successfully can take time with considerable effort spent on pilot schemes before a national service can be implemented. We have proven in the UK that our technologies are robust and scaleable which allow us to quickly scope the potential of a new market and to work closely with partners to establish a business model and demonstrate the viability of the services. Whilst our strategy is to qualify new prospects by speed and potential, business models and start up costs can vary from country to country. USA On 6th December 2005, the Company announced that an agreed form contract with the Missouri Department of Transportation ('MODOT') had been approved by the Missouri Highways and Transportation Commission. However, as previously highlighted, due to circumstances beyond ITIS' control, this project remained undelivered in the year ended 31 March 2007. During this time both ITIS and its US partner, Delcan, remained in contract with MODOT whilst seeking a solution, with its involvement. Whilst Missouri has the potential to provide us with an excellent reference site, the financial contribution from delivering this contract is expected to be modest. OTHER COUNTRIES Activities outside the UK and the US are now beginning to show their true potential. We are pleased to announce today that we have reached agreement to provide traffic information services in the Republic of Ireland through a new licensing deal. Under this arrangement our partner, iTraffic, has secured the cooperation of a mobile operator which has become a de facto requirement for us when launching our services into a new country. We have also licensed our technology in a second European country and the system is currently being rolled out nationwide. More details will be announced shortly once our partners have made their own press announcements Other European activity includes a pilot with a mobile operator based in Spain to provide traffic information in Barcelona and the launch of a traffic service in Prague. In Australia we have successfully provided our RDS-TMC software platform for Intelematics a wholly owned subsidiary of Royal Automobile Club of Victoria and have completed a successful demonstration of our CFVD technology through our partner Traffic Intelligence for Optus. Optus are a leading mobile operator, who are part of the SingTel group, one of Asia's leading communications groups with operations in more than twenty countries and territories around the world. CURRENT TRADING & PROSPECTS The Board is encouraged with the Company's progress and believes that it can build upon the success in the UK and start to generate revenues internationally. The current financial year has started well and the Board remains confident about the Company's future prospects. Footnotes * 2007 2006 Profit on ordinary activities before taxation £7,959,752 1,960,324 Less: exceptional profit on sale of discontinued operations ( £4,056,923) - Less: exceptional income (331,268) Profit before taxation and exceptional items £3,902,829 1,629,056 ** The profit basis for adjusted earnings per share has been calculated to include only continuing operations and to exclude the impact of exceptional items. A reconciliation between profit for the financial year and the profit used to calculate the adjusted earnings per share figures is shown below. 2006 2007 £ £ Profit for the financial year 9,445,845 2,048,278 _________ _________ 2006 exceptional item - (331,268) Profit on sale of a discontinued operation (4,056,923) - Discontinued operations: operating profit (221,038) (333,519) interest receivable (11,628) (13,123) _________ _________ Adjusted profit 5,156,256 1,370,368 _________ _________ Deferred tax credit (1,491,830) - Adjusted profit (from continuing operations, excluding deferred tax 3,664,426 1,370,368 credit) _________ _________ Preliminary announcement of results for the year ended 31 March 2007 Consolidated profit and loss account 2007 2006 Restated (Note 4) £ £ Turnover Continuing operations 14,171,896 10,177,457 Discontinued operations 4,616,585 4,238,656 __________ __________ Total Turnover 18,788,481 14,416,113 Cost of sales (8,179,828) (6,982,244) __________ __________ Gross profit 10,608,653 7,433,869 Distribution costs (116,605) (106,179) Administrative expenses (6,912,267) (5,523,966) __________ __________ Operating profit 3,579,781 1,803,724 Operating profit - continuing operations 3,358,743 1,138,937 Exceptional item - continuing operations - 331,268 Operating profit - discontinued operations 221,038 333,519 Operating profit 3,579,781 1,803,724 Profit on sale of discontinued operations 4,056,923 - Interest receivable and similar income 323,755 158,723 Interest payable and similar charges (707) (2,123) __________ __________ Profit on ordinary activities before taxation 7,959,752 1,960,324 Current tax on ordinary activities (5,737) 93,350 Deferred tax credit 1,491,830 - __________ __________ Total tax on profit on ordinary activities 1,486,093 93,350 __________ __________ Profit on ordinary activities after taxation 9,445,845 2,053,674 Minority interests - (5,396) __________ __________ Profit for the financial year 9,445,845 2,048,278 __________ __________ Basic and diluted earnings per share from continuing 5.2 1.4 operations (pence)* Adjusted basic and diluted earnings per share from 3.7 1.4 continuing operations (pence)**, excluding in 2007 a 1.5p per share deferred tax credit Basic and diluted earnings per ordinary share (pence) 9.6 2.1 __________ __________ The accompanying notes are an integral part of this consolidated profit and loss account. *Excludes exceptional items, the profit on the sale of NavTrak and net interest receivable of £11,628 (2006 - £13,123) relating to discontinued operations. **Excludes exceptional items, the profit on the sale of NavTrak, net interest receivable of £11,628 (2006 - £13,123) relating to discontinued operations and the impact of a deferred tax credit of £1,491,830. Consolidated statement of total recognised gains and losses 2007 2006 Restated (Note 4) £ £ Profit for the financial year 9,445,845 2,048,278 Currency translation difference (1,649) 1,858 __________ __________ Total recognised gains and losses relating to the year 9,444,196 2,050,136 __________ __________ Consolidated balance sheet at 31 March 2007 2007 2006 Restated (Note 4) £ £ Fixed assets Intangible assets 684,838 617,812 Tangible assets 932,997 659,746 __________ __________ 1,617,835 1,277,558 __________ __________ Current assets Stocks - 374,998 Debtors - due within one year 6,182,635 4,300,432 - due after more than one year 98,337 40,000 Cash at bank and in hand 11,571,102 5,697,498 __________ __________ 17,852,074 10,412,928 Creditors: Amounts falling due within one year (3,291,283) (4,434,618) __________ __________ Net current assets 14,560,791 5,978,310 __________ __________ Total assets less current liabilities 16,178,626 7,255,868 Creditors: Amounts falling due after more than one year (61,396) (601,991) Provisions for liabilities and charges - (54,459) __________ __________ Net assets 16,117,230 6,599,418 __________ __________ Capital and reserves Called-up share capital 5,230,270 5,230,270 Share premium account 38,070,740 38,070,740 Profit and loss account (27,440,187) (36,888,816) Other reserve 256,407 178,025 __________ __________ Equity shareholders' funds 16,117,230 6,590,219 Minority interests - equity - 9,199 __________ __________ Total capital employed - equity 16,117,230 6,599,418 __________ __________ Consolidated cash flow statement for the year ended 31 March 2007 Note 2007 2006 £ £ Net cash inflow from operating activities 2 4,774,220 1,765,284 __________ __________ Returns on investments and servicing of finance Interest element of finance lease rental payments (707) (2,123) Interest received 323,755 158,723 __________ __________ Net cash inflow from returns on investments and servicing of finance 323,048 156,600 __________ __________ Taxation Foreign tax paid (18,205) (20,300) Research and development taxation credit 23,856 127,124 __________ __________ Net cash inflow from taxation 5,651 106,824 __________ __________ Capital expenditure Purchase of tangible fixed assets (894,958) (489,566) Sale of tangible fixed assets 17,749 - Purchase of intangible fixed assets (381,820) - __________ __________ Net cash outflow from capital expenditure (1,259,029) (489,566) Disposals Proceeds on sale of subsidiary 3 Costs of disposal (164,484) - Net cash balances disposed of with subsidiary undertaking (4,153) - Repayment of loans owed by subsidiary 2,199,997 __________ __________ Net cash inflow from disposals 2,031,363 - __________ __________ Cash inflow before financing 5,875,253 1,539,142 __________ __________ Financing Proceeds on issue of shares - 771,847 Capital element of finance lease rental payments - (28,690) __________ __________ Net cash inflow from financing - 743,157 __________ __________ Increase in cash in the year 3 5,875,253 2,282,299 __________ __________ Reconciliation of movements in group shareholders' funds for the year ended 31 March 2007 2007 2006 Restated (Note 4) £ £ Profit for the financial year 9,445,845 2,048,278 Other recognised gains and losses relating to the year (1,649) 1,858 Proceeds on issue of shares - 771,847 FRS 20 share option charge 82,815 26,128 __________ __________ Net addition to Group shareholders' funds 9,527,011 2,848,111 Opening shareholders' funds 6,590,219 3,742,108 __________ __________ Closing shareholders' funds 16,117,230 6,590,219 __________ __________ Notes 1. Basis of Preparation The financial information set out in this preliminary announcement does not constitute the Group's statutory accounts for the years ended 31 March 2006 or 2007, but is derived from those accounts. Statutory accounts for the year ended 31 March 2006 have been delivered to the Registrar of Companies. The auditors have reported on the accounts for the years ended 31 March 2007 and 2006: their reports were unqualified and did not contain a statement under section 273(2) or (3) of the Companies Act 1985. The financial information set out in this preliminary announcement has been prepared on the basis of the accounting policies as stated in the accounts for the year ended 31 March 2006, except for the adoption of FRS20 (see note 4). A copy of the annual report and accounts will be circulated to all shareholders of the company shortly and copies will also be available for members of the public upon application to the registered office at Fifth Floor, Station House, Stamford New Road, Altrincham, WA14 1EP and on the website www.itisholdings.com. 2. Reconciliation of operating profit to net cash inflow from operating activities 2007 2006 Restated (Note 4) £ £ Operating profit 3,579,781 1,803,724 Depreciation and amortisation of licenses 840,023 552,934 Decrease (increase) in stocks 55,190 (21,447) Increase in debtors (1,145,813) (1,322,584) Increase in creditors 1,500,496 867,563 Decrease in provisions (54,459) (141,034) Profit on disposal of fixed assets (998) - Adoption of FRS 20 26,128 __________ _________ Net cash inflow from operating activities 4,774,220 1,765,284 __________ _________ 3. Reconciliation of net cash flow to movement in net funds 2007 2006 £ £ Increase in cash in the year 5,875,253 2,282,299 Cash outflow from decrease in lease financing - 28,690 __________ __________ Change in net funds resulting from cash flows 5,875,253 2,310,989 Translation differences (1,649) 1,858 __________ __________ Movement in net funds in the year 5,873,604 2,312,847 Net funds brought forward 5,697,498 3,384,651 __________ __________ Net funds carried forward 11,571,102 5,697,498 __________ __________ 4. Restatement of comparative figures FRS 20, Share-based Payment, was adopted in the year. FRS 20 requires the group to recognise a charge in the Profit and Loss account and a credit in equity to reflect the fair value of outstanding share options issued to employees. Share compensation charges have been recognised in the period and the comparative periods have been restated to include a similar charge. This information is provided by RNS The company news service from the London Stock Exchange

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