Final Results - Pre-tax Profit Up 28%
Comino Group PLC
8 June 2000
COMINO GROUP plc
FINAL RESULTS ANNOUNCEMENT
Profit up 28%; EPS up 18%; Dividend up 24%; Substantial order book
Comino Group plc ('Comino'), the provider of software solutions for the social
housing, occupational pensions and local government sectors, announces final
results for the year ended 31 March 2000.
Highlights of the results
2000 1999 Increase
* Turnover £20.5m £18.6m 10%
* Turnover continuing
operations £17.1m £14.3m 20%
* Profit before tax £6.0m
Operating profit & interest - £3.47m £2.72m 28%
Profit on disposal - £2.55m
* Earnings per share 30.8p
(now fully taxed)
Operating profit & interest - 17.9p 15.2p 18%
Profit on disposal - 12.9p
* Proposed dividend 3.1p final 2.5p final
* Total dividend 4.65p 3.75p 24%
* Cash balances £12.4m £7.4m
* Sale of non core subsidiary
* Comino now focused on its 3 core sectors under one common brand and
operating structure
* New Universal Pensions Management product wins industry award and orders
* £1m investment in joint venture ISP/ASP/FM company targeting the housing
sector
* Substantial sale opportunities in social housing with existing customers,
including workflow
* Market share gains in local authorities
The Company made the following comments on its results:
'The Comino Group has completed a further year of excellent performance.. and
is resolved to make its brand name synonymous with innovative, quality
software and services.
Regarding Prospects Comino said:
'Comino starts the new financial year with clearly identifiable opportunities,
a substantial order book and a base of recurring revenue from support
contracts for existing customers.'
For further information please contact:
Garth Selvey, Chief Executive tel: 020 7786 9600 on the day
Paul Clifford, Finance Director thereafter: 01628 525433
Peter Binns/Jane Mallinson, Binns & Co tel: 020 7786 9600
Chairman's Statement
The Comino Group has completed a further year of excellent performance. The
non-core business has been sold and the principal operating company, Comino
plc, is now focused on Social Housing, Local Government and Occupational
Pensions under one common brand and operating structure. The company has
established a strong technology platform and is well positioned both to serve
its existing customer base and to develop new products and markets in related
areas.
For the year ended 31 March 2000, profit before taxation was £6.02 million.
This included £3.47 million of operating profit and interest and a capital
gain of £2.55 million from the disposal of the fashion and clothing business
in November of last year. Operating profit and interest were 28% higher than
in the previous year and included £2.92 million attributable to the ongoing
core business.
As expected, sales growth was affected by a slowing in new contracts in the
period up to the millennium. Total turnover increased by 10% to £20.5 million
reflecting a partial year from the disposal. Turnover from continuing
operations increased by 20%. Gross margins were maintained at 69% and
overheads were tightly controlled.
There was a slight shift towards higher margin service revenues, which
compensated for the anticipated downturn in new housing contracts during the
period. The Group is now returning to a more normal and balanced revenue mix,
divided fairly equally amongst annual recurring support, business with the
customer base and new name contracts.
Adjusted EPS of 17.9 pence per share showed an increase of 18%, after being
subjected for the first time to a full tax charge. With the inclusion of the
capital gain, EPS was 30.8 pence per share. Cash balances at the end of the
year were £12.4 million compared with £7.4 million last year. The proposed
dividend of 3.1 pence per share will bring the total for the year to 4.65
pence, an increase of 24% over the previous year.
In Social Housing, there are substantial sales opportunities with existing
customers, where the benefits of Workflow are becoming increasingly apparent.
In Local Authorities, we continue to win market share and we are building the
customer base by the sale of two Revenue & Benefit systems per month. Last
year saw the release of Universal Pensions Management (UPM) as a new
generation product for Occupational Pensions. We enter the new year with
significant new name orders including the West Midlands Pensions Fund. UPM
has won recognition in both the private and the public sectors. It has also
been recognised by the pensions industry itself with the presentation of the
'Systems and Software Provider of the Year' award sponsored by Sun Life
Financial of Canada.
UPM shows what can be achieved in performance and efficiency when Workflow and
Electronic Document Management are used to streamline the business flow and
modernise the customer interface. UPM clearly presents a major growth
opportunity.
The company recently announced a £1 million investment in a joint-venture
company, Comino Montal. This will allow an existing, profitable business to
offer a range of new services to the Comino customer base. Comino Montal will
provide internet access and communications (ISP), facilities for software
rental (ASP), off-site server management and remote network management (FM).
We estimate that there are some 1,000 organisations in Housing alone who could
benefit from ASP services which offer a relatively low cost alternative to
managing their own IT infrastructure. Comino Montal already provides ISP
services for 30 Housing customers and has recently won its first ASP contract
based on Comino's housing software. The operation will become a central
portal to those communities who use Comino software.
Comino starts the new financial year with clearly identifiable opportunities,
a substantial order book and a base of recurring revenue from support
contracts for existing customers.
During the year Gordon Skinner was regrettably obliged to retire as Chairman
through ill health. Gordon was involved with Comino from its inception and
the Board wishes to thank him for his very considerable contribution.
Comino is resolved to make its brand name synonymous with innovative, quality
software and services in its chosen market sectors. We already provide
products which are resilient and systems that provide essential business
functionality. To this, we are now adding the features and benefits which the
internet provides. We are grateful to all our customers and staff for the
contribution which they have made to results for the year just ended and for
helping Comino position itself for an exciting future.
David Quysner
Chairman
Consolidated profit and loss account
for the year ended 31 March 2000
2000 1999
£000 £000
Turnover
Continuing operations 17,125 14,270
Discontinued operations 3,327 4,325
---------- ----------
20,452 18,595
Cost of sales (6,236) (5,784)
---------- ----------
Gross profit 14,216 12,811
Administrative expenses (11,110) (10,377)
---------- ----------
Operating profit
Continuing operations 2,558 2,043
Discontinued operations 548 391
---------- ----------
3,106 2,434
Exceptional item
Profit on disposal of subsidiary 2,549 -
Interest receivable 369 288
Interest payable (4) (4)
---------- ----------
Profit on ordinary activities
before taxation 6,020 2,718
Tax on profit on ordinary activities (1,834) (676)
---------- ----------
Profit on ordinary activities
after taxation 4,186 2,042
Dividends (635) (513)
---------- ----------
Retained profit for the financial year 3,551 1,529
====== ======
Basic earnings per share 30.8p 15.2p
====== ======
Diluted earnings per share 29.9p 14.8p
====== ======
Adjusted earnings per share 17.9p 15.2p
====== ======
The Group had no recognised gains or losses during the year ended 31 March
2000 other than the profit for the year.
Consolidated balance sheet
at 31 March 2000
2000 1999
£000 £000
Fixed assets
Tangible assets 665 649
----------- -----------
Current assets
Stocks 329 859
Debtors 4,754 6,596
Cash at bank and in hand 12,434 7,449
---------- -----------
17,517 14,904
Creditors: amounts falling due
within one year (5,507) (5,678)
----------- -----------
Net current assets 12,010 9,226
----------- -----------
Total assets less current liabilities 12,675 9,875
Creditors: amounts falling due after
more than one year (16) (55)
Deferred income (5,281) (6,545)
----------- -----------
7,378 3,275
=========== ===========
Capital and reserves
Share capital 683 678
Share premium reserve 4,375 4,334
Profit and loss account 2,320 (1,737)
---------- ----------
7,378 3,275
=========== ==========
These financial statements were approved by the Board of Directors on 7 June
2000.
G R Selvey )
Directors
P L Clifford )
Consolidated cash flow statement
for the year ended 31 March 2000
2000 1999
£000 £000
Net cash inflow from operating activities 3,044 4,134
Returns on investment and
servicing of finance
Interest received 369 288
Interest paid (4) (4)
---------- ----------
Net cash inflow from returns on
investments and servicing of finance 365 284
---------- ----------
Taxation (647) (451)
---------- ----------
Capital expenditure
Purchase of tangible fixed assets (512) (341)
Sale of tangible fixed assets 15 29
---------- ----------
Net cash outflow from capital expenditure (497) (312)
---------- ----------
Acquisitions and disposals
Disposal of subsidiary undertaking 3,277 -
---------- ----------
Net cash inflow from acquisitions
and disposals 3,277 -
---------- ----------
Equity dividends paid (550) (502)
---------- ----------
Management of liquid resources
Decrease in short term deposits - 2,200
---------- ---------
Financing
Issue of shares 46 31
Repayment of borrowings (53) (64)
---------- ----------
Net cash outflow from financing (7) (33)
---------- ----------
Increase in cash 4,985 5,320
========== ==========
Notes
1. Earnings per ordinary share have been calculated on the profit for the
financial year of £4,186,000 after taxation and minority interest and on
13,610,139 ordinary shares being the weighted number of ordinary shares
in issue during the year. The calculation of diluted earnings per share
takes account of share options that do not currently rank for dividends
but may do so in the future. The adjusted earnings per share excludes
the profit after tax of £1,750,000 on the disposal of Prologic Computer
Consultants Limited.
2. The financial information set out above does not constitute the statutory
accounts for the period ended 31 March 2000 within the meaning of Section
240 of the Companies Act 1985. Statutory accounts for the year will be
delivered to the Registrar of Companies following the Company's Annual
General Meeting.
3. The annual report and accounts will be posted to shareholders on 8 June
2000 and will also be available on request from the Company's registered
office, Comino House, Furlong Road, Bourne End, Buckinghamshire, SL8 5AJ.
4. The directors are recommending a final dividend of 3.1p per share which,
if approved, will be paid on 27 July 2000 to shareholders on the register
on 23 June 2000.
5. The Annual General Meeting will be held at Binns & Co, 16 St Helen's
Place, London, EC3A 6DF on Friday 7 July 2000 at 11:30 am.
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