Final Results

County Contact Centres PLC 05 August 2002 COUNTY CONTACT CENTRES PLC FINAL RESULTS CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 30 JUNE 2002 The Business Review explains how your executive team is running the company and I hope you agree that they are delivering the turnaround strategy mentioned in my half yearly report. At the AGM last year we changed the name of the group to better reflect the call centre and specialist software products offered by the group and in April 2002 the COUNTYWeb directory and its associated internet services was sold. Existing COUNTYWeb share certificates still remain valid. The Board, whose effectiveness is crucial to delivering shareholder value, has been together since the company was formed and is now working extremely well, playing to the strengths of each individual member. I have been asked, and have agreed subject to shareholder approval, to serve until November 2004. The directors' salary cuts, implemented last year, were restored in April. Effectively therefore, adjusted for RPI, the Board is on exactly the same salaries as they were 21/2 years ago, apart from one merit rise. As you will remember all the directors voluntarily sacrificed their original options in 2001 and we propose, under the terms of the existing scheme, to grant options with a total value of up to twice current remuneration to all the directors at an exercise price of 10% above the average closing market price over the three days following the Annual General Meeting. Options will also be offered to key staff members. This means that option holders gain no benefits from the first 10% rise in the share price. Options can be realised on the following formula between three and ten years from their grant: If the share price Percentage of options is at or above realisable 25p 25% 40p 50% 65p 75% 100p 100% Additional grants to existing option holders, which will again reflect a 10% premium, will not be made for two years from the AGM and, in addition, will not be offered until the shares have reached a market price of at least 40p. The company's cash position, supplemented by a Research and Development recovery of £116,642 from the Inland Revenue in July, is adequate to support our business plans. Summary The company is now on a sound platform and the Board is confident, having re-engineered the business and set ambitious targets that we can continue to deliver improved results. Peter Brown Chairman 5th August 2002 BUSINESS REVIEW FOR THE YEAR ENDED 30 JUNE 2002 Since the interim accounts for the half year to December the group has continued to make strong progress in re-engineering its business model. This project has now started to bear fruit and, with a solid business base, the outlook is most encouraging for the year ahead with the company now concentrating on the provision of a 24 hours a day, 7 days a week out of hours and overflow telephony service and the development and sale of call centre contact relationship management software. Pre-tax losses continue towards breakeven with the unaudited six monthly splits showing the following trend: £ Pre-tax loss for the six months to 30th June 2001 (2,273,968) Pre-tax loss for the six months to 31st December 2001 (475,781) Pre-tax loss for the six months to 30th June 2002 (59,242) The group's future is dependent on the continued growth of both the Ansaback and CallScripter businesses, more details of which are set out below. The directors are confident that this growth can be achieved. Ansaback The Ansaback division has had a tremendous surge since the start of the calendar year, mainly brought about by a complete shake up of the monthly charging terms. Historically our business was quoted on a "per call basis" and in January this was reviewed and most clients switched to "per minute billing". This was generally well received as it is a much more equitable billing regime, but not unexpectedly this resulted in the departure of several low priced clients. The complete transition to our own CallScripter software package has had significant operational benefits, as all client scripts now automatically "pop" on agent's screens when calls are presented. Previously this was a manual selection and is now not only more efficient, but eradicates selection errors. Having a single system also makes training new agents much easier and new staff are quick to adapt to the new user-friendly system. The CallScripter software also assists the sales team who can now have client scripts created at very short notice, and quickly respond to client requests for seasonal changes, which provides for even greater client satisfaction. The new software has the ability for clients to login from remote access and either collect or view their messages and data. These developments also offer the added possibility of additional referrals from other divisions of companies currently using our services. One of the benefits of developing our own software package is that we do not incur any annual charges and additional costs for upgrades. This will start to have a beneficial impact as the call centre fills to its capacity, which we anticipate towards the end of 2003. During the year a large blue chip call centre in the North East vetted our business, to allow them to pass over clients deemed too small for their organisation. These customers needed to be handled by a responsible 24-hour operation, and the quality of these referrals has been excellent. Providing we maintain our standard of service, there should be further business from this source in the future. The number of accounts for whom we currently provide services, including many blue chip organisations, has risen by 33% from 169 clients at the time of purchase to a new total of 225. Billable minutes have also improved with minutes billed increasing by 21% in the quarter to July. The sales team has been strengthened and further sales and support staff will be recruited in the near future with targets of increasing sales and improving client care. Our campaign work, to win outbound rather that incoming call clients, which started from zero in 2001, now has 10 clients many of whom retain us for monthly pushes on sales and appointment bookings. This area also looks set to develop further over the coming 12 months. CallScripter The package was designed by our own technical team to supersede the inherited call centre software. Written in ASP (Microsoft Active Server Pages), the package has been branded under the name CallScripter and after evaluation by external consultants is now being offered directly to Call Centres, Software Distributors and Telephone Switch Manufacturers. Our suite provides clients with a much improved management information package as well as the ability to quickly amend agent scripts without the need for skilled technical expertise. Call Centre Expo 2001, held in October at the NEC, was the official launch of the package and it met with significant interest, which after extensive customer evaluation culminated in 8 orders. Two of these were substantial sales, the call centres concerned being major players within the UK industry, and this has given the product a significant point of reference. At 30th June 2002, delivered software orders have a value of over £350,000. More recent call centre exhibitions in Berlin, Utrecht and Paris have led to a number of promising demonstrations. We have representatives appointed for the above centres and are planning to extend our base to other regions as quickly as possible. The Paris Expo was used for the launch of the first foreign language version and in July 2002 we also secured our first international order, at a value of £31,000, which has already been installed. Our technical team continues to develop CallScripter and Version 2 with added enhancements is due to be launched in September at the next UK Call Centre Expo at the Birmingham NEC. COUNTYWeb The COUNTYWeb directory and its related internet services was sold in April for £155,000 with a copy of the entire database being retained for our own marketing purposes. Under the terms of the agreement, we will provide hosting and maintain the directory facilities during the transfer to its new service provider, to be completed during August 2002. William A Catchpole 5th August 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2002 2002 2001 £ £ Turnover Continuing operations 1,079,642 134,868 Discontinued operations 219,330 423,091 --------- --------- Turnover 1,298,972 557,959 Cost of sales Continuing operations (603,895) (98,608) Discontinued operations (2,354) (114,145) --------- --------- Cost of sales (606,249) (212,753) Gross profit Continuing operations 475,747 36,260 Discontinued operations 216,976 308,946 --------- --------- Gross profit 692,723 345,206 Administrative expenses Continuing operations (1,220,804) (1,672,527) Discontinued operations (198,746) (2,597,595) --------- --------- Administrative expenses (1,419,550) (4,270,122) Operating profit/(loss) Continuing operations (745,057) (1,636,267) Discontinued operations 18,230 (2,288,649) --------- --------- Operating loss (726,827) (3,924,916) Exceptional Items Profit on disposal of discontinued operations 155,000 - Other interest receivable and similar income 36,828 155,194 Interest payable and similar charges (24) (3,139) --------- --------- Loss on ordinary activities before taxation (535,023) (3,772,861) Tax on loss on ordinary activities 114,953 - --------- --------- Loss on ordinary activities after taxation deducted from reserves (420,070) (3,772,861) ========= ========== Basic loss per share (1.6) p (14.1) p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 30 JUNE 2002 2002 2001 £ £ Loss for the financial year (420,070) (3,772,861) Prior year adjustment - (29,096) --------- --------- Total loss recognised since last financial statements (420,070) (3,801,957) ========= ========== CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2002 2002 2001 £ £ Fixed assets Intangible assets - - Tangible assets 136,596 213,658 -------- -------- 136,596 213,658 Current assets Debtors 566,423 750,733 Cash at bank and in hand 564,964 1,565,760 -------- -------- 1,131,387 2,316,493 Creditors: amounts falling due within one year (301,108) (1,143,206) -------- -------- Net current assets 830,279 1,173,287 -------- -------- Total assets less current liabilities 966,875 1,386,945 -------- -------- Capital and reserves Share capital 268,572 268,572 Share premium account 5,873,199 5,873,199 Other reserve - 25,000 Merger reserve 18,396 18,396 Profit and loss account (5,193,292) (4,798,222) --------- --------- Shareholders' funds 966,875 1,386,945 ========= ========== CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2002 2002 2001 £ £ Net cash outflow from operating activities (1,190,722) (2,832,485) Returns on investments and servicing of finance Interest received 36,828 155,194 Interest paid (24) (3,139) --------- --------- Net cash inflow from returns on investments and servicing of finance 36,804 152,055 --------- --------- Capital expenditure and financial investment Purchase of fixed assets (16,940) (323,335) Proceeds from sale of COUNTYWeb fixed assets 155,000 - Proceeds from sale of tangible fixed assets 15,062 9,523 --------- --------- Net cash inflow/(outflow) from capital expenditure and financial investment 153,122 (313,812) --------- --------- Acquisitions Purchase of Ansaback business - (194,000) --------- --------- Net cash outflow from acquisitions - (194,000) --------- --------- Financing Proceeds from issue of new shares - 1,090,000 --------- --------- Net cash inflow from financing - 1,090,000 --------- --------- Decrease in cash (1,000,796) (2,098,242) ========= ========= This information is provided by RNS The company news service from the London Stock Exchange

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