Interim Results

Eurolink Managed Services PLC 10 December 2002 EUROLINK MANAGED SERVICES PLC Interim Statement For the six month period ended 30th September 2002 Chairman's Statement Introduction and results I am pleased to report turnover for the period up 9% to £4.51 million (2001 £4.13 million) with operating profit at £33,000 (2001 £29,000). Earnings per share were 0.03p (2001 loss per share of 0.38p). Business review In what has been a very difficult market it is satisfying to see an increase in business levels over the corresponding period. As I stated in August, the second quarter of this period was always going to be challenging to maintain utilisation levels of permanent consultants and this has proved to be the case. However, whilst a number of redundancies were announced in the non-core strengths, the majority were rescinded on the strong expectation of securing further significant contracts. The group absorbed the short-term costs associated, impacting the performance in the second quarter, but the quality permanent consultant team has been retained as a result and they are now engaged in client activity. The net effect of the redundancies was to reduce the permanent staff levels by just under 10%. Other areas of the business maintained and improved business levels, assisting in enabling the directors to focus available resources more on new business generation, by increasing the solutions sales team and extending into new product areas where opportunities have presented themselves, in particular IT Learning and Software Testing facilities. These are seen as being both complimentary to existing services as well as being products in their own right thus broadening our portfolio of services and increasing our target marketplace. All these activities involve costs so including redundancies the headline level of overheads is little changed from last year. However, in the first half last year the Group received one-off items of income, such as short-term property rental, which have not been repeated this year. Consequently on a like for like basis the actual level of overheads has reduced by some 8% in this period. Outlook In spite of a generally uncertain market place the directors are confident the increased allocation of resources towards sales generation should be more productive and provide the opportunity to enhance overall business levels in conjunction with long-term existing business relationships. Coupled with cost reductions, which will reflect more fully in the second half the directors are cautiously optimistic of prospects for this period. David Wood Chairman 10th December 2002 Group profit and loss account For the six months ended 30 September 2002 Audited twelve Unaudited six months months to to 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 Turnover 4,512 4,131 9,226 Cost of sales (3,610) (3,247) (7,293) _______ _______ _______ Gross profit 902 884 1,933 Administrative expenses (869) (855) (1,734) _______ _______ _______ Operating profit 33 29 199 Net interest payable (16) (22) (44) _______ _______ ______ Profit on ordinary activities before taxation 17 7 155 Taxation on profit from ordinary activities (note 2) ( 14 ) (47) (106) _______ _______ _______ Profit/(loss) for the financial period 3 (40) 49 _______ _______ _______ Earnings per share Basic 0.03p (0.38)p 0.47p Diluted 0.03p (0.38)p 0.47p _______ _______ _______ All disclosures relate only to continuing operations. There are no recognised gains or losses other than the profit for the period. Group balance sheet As at 30 September 2002 Unaudited Audited 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 Fixed assets Tangible assets 276 326 297 Current assets Debtors Trade debtors subject to financing - 1,754 - Less: non-returnable proceeds - (618) - Other trade debtors 778 - 840 _______ _______ _______ 778 1,136 840 Other debtors and prepayments 907 - 1,090 Cash at bank and in hand 375 379 418 _______ _______ _______ 2,060 1,515 2,348 _______ _______ _______ Creditors: amounts falling due within one year (1,416) (1,009) (1,713) _______ _______ _______ Net current assets 644 506 635 _______ _______ _______ Total assets less current liabilities 920 832 932 Creditors: amounts falling due after more than one - (30) (13) year Provisions and charges Deferred tax (28) (33) (30) _______ _______ _______ 892 769 889 _______ _______ _______ Capital and reserves Called up share capital 208 208 208 Share premium account 103 72 103 Profit and loss account 581 489 578 _______ _______ _______ Equity shareholders' funds 892 769 889 _______ _______ _______ Group cash flow statement For the six months ended 30 September 2002 Audited Unaudited twelve six months to months to 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 Net cash inflow/(outflow) from operating activities 286 351 (98) Returns on investments and servicing of finance Interest paid (16) (22) (44) Net capital expenditure and financial investment (11) 8 9 Taxation UK corporation tax (43) (93) (143) _______ _______ _______ Net cash inflow/(outflow) before financing 216 244 (276) _______ _______ _______ Financing Capital element of finance leases and hire purchase contracts (26) (76) (108) Amount advanced against trade debtors (233) - 591 _______ _______ _______ Net cash (outflow)/inflow from financing (259) (76) 483 _______ _______ _______ (Decrease)/increase in cash in the year (43) 168 207 _______ _______ _______ Reconciliation of operating profit to net cash flow from operating activities Operating profit 33 29 199 Depreciation charges 31 36 67 Loss on sale of tangible fixed assets - 12 9 Decrease/(increase) in debtors 245 256 (538) (Decrease)/increase in creditors (23) 18 165 _______ _______ _______ Net cash inflow/(outflow) from operating activities 286 351 (98) _______ _______ _______ Reconciliation of net cash flow to movement in net debt Opening net (debt)/funds (229) 47 47 (Decrease)/increase in cash in period (43) 168 207 Cash outflow/(inflow) from changes in debt 259 76 (483) _______ _______ _______ Closing net (debt)/funds (13) 291 (229) _______ _______ _______ Notes to the interim statement 1. Preparation of interim report The financial information for the six month period ended 30 September 2002 is unaudited and does not constitute statutory accounts within the meaning of the Companies Act 1985. The accounts have been prepared using accounting policies consistent with those set out in the Group's statutory accounts for the period ended 31 March 2002. The financial information for the period ended 31 March 2002 has been extracted from the statutory accounts of Eurolink Managed Services plc which contained an unqualified audit report and which have been filed with the Registrar of Companies. 2. Tax Unaudited Unaudited Audited six months to six months to twelve months to 30 September 30 September 31 March 2002 2001 2002 £'000 £'000 £'000 United Kingdom corporation tax 16 14 76 Deferred tax (2) 33 30 _______ _______ _______ 14 47 106 _______ _______ _______ 3. Earnings per share The calculation of basic earnings/(loss) per share is based on the profit/(loss) on ordinary activities after taxation of £3,000 (September 2001: £(40,000); March 2002: £49,000). The weighted average number of shares in issue during the period and throughout the previous year was 10,400,000. There is no difference between the basic and fully diluted profit/(loss) per share. 4. Share options Notional gains on options in issue under the companies share option scheme are subject to national insurance costs. At 30 September 2002 no provision was required. 5. Copies of report The Interim Report will be posted to all shareholders and will be available on request from the Company Secretary, Queen Square House, 15 Queen Square, Brighton, BN1 3FD. INDEPENDENT REVIEW REPORT TO EUROLINK MANAGED SERVICES PLC Introduction We have been instructed by the company to review the financial information for the six months ended 30 September 2002 set out on pages 2 to 6 and we have read the other information in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. Where a company is fully listed the directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. The directors of Eurolink Managed Services plc have voluntarily complied with this requirement. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2002. BDO Stoy Hayward, Chartered Accountants, Brighton 10th December 2002 This information is provided by RNS The company news service from the London Stock Exchange

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