Interim Results
Access Intelligence PLC
06 July 2005
FOR RELEASE 7.00AM 6 JULY 2005
ACCESS INTELLIGENCE PLC
(Range of companies providing information, advice and services to small and
medium sized businesses and the public sector)
ACQUISITION OF DUE NORTH
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 31 MAY 2005
GROUP NOW TRADING PROFITABLY
Unaudited Unaudited Audited
6 months ended 6 months ended 13 June 2003 to
31 May 31 May 30 Nov
2005 2004 2004
£000s £000s £000s
Turnover 391 299 543
Loss before tax (53) (179) (381)
Profit /(loss) before tax and
goodwill amortisation 8 (118) (259)
Loss per share (0.10p) (0.63p) (1.59p)
Dividend Nil Nil Nil
* Turnover up 31% from the similar period last year
* Two acquisitions completed since period end
- Acquisition of Due North Ltd. completed on 5 July 2005, a
subscription based developer and provider of e-commerce solutions,
for an initial consideration of £1.5 million
- Acquisition of Ridgeway Technologies Ltd. completed on 27 June 2005
and will be fully integrated with Backup and Running
* Continuing to look for new businesses to join the group
* Second half has started well
* Group now trading profitably before goodwill amortisation
For further information:
Access Intelligence plc
Jeremy Hamer (Chairman) 01904 520840
Brendan Austin (Chief Executive) 01904 520840
Colin Davies (Finance Director) 01904 520840
Beattie Financial
Brian Coleman-Smith / Jo Clewlow 020 7053 6400
Background Note:
Following the acquisition of Due North, Access Intelligence has five operating
subsidiaries:
* The Marketing Guild, based in York, which provides marketing advice
and support to small and medium sized businesses. This is in the form of
newsletters, consultancy, lead generation and member's services.
* Wired Gov, based in Stockport, provides an online information service
delivering press releases from over 100 government and public sector
bodies. Subscribers can customise the service specifying the agency or
topic they require.
* Backup and Running, based in York, provides an online data storage and
disaster recovery service, which the client can customize to their own
requirements. The service offers significant advantages over other
alternative systems in that it backs up automatically and can provide a
complete backup history for at least three years.
* Willow Starcom (Ridgeway Technologies), based in Chorley, provides
specialist IT services across a broad range of market sectors that
include data storage, backup and recovery, network design support and
consultancy and hardware and software maintenance support services. It
has growing recurring revenues from these activities of over £1million
per annum.
* Due North, based in Newcastle-Upon-Tyne, is a developer and provider of
e- commerce solutions, primarily to the public sector and emergency
services. The range of products includes an e-tendering module combined
with an e-auction module.
ACCESS INTELLIGENCE PLC
('Access Intelligence' or 'the Company')
(Range of companies providing information, advice and services to small and
medium sized businesses and the public sector)
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 31 MAY 2005
Results
This morning we have announced our second acquisition to have taken place in the
last nine days and we are now pleased to announce our results for the six months
to 31 May 2005. Turnover in the first half of the current year was £391,000
(2004: £299,000) an increase of over 30% on the comparable period in 2004 and we
are pleased to report a profit before tax and goodwill amortisation of £8,000
(2004: loss of £118,000).
The group is now trading above breakeven on a monthly basis, before goodwill
amortisation, and is building its subscription base every month.
During the period under review the group successfully raised £2.8m net by the
placing of 30 million shares at 10p per share to several institutional
investors. On 2 June we announced the acquisition of Ridgeway Technologies,
which was completed on 27 June 2005. This company will complement the activities
of Backup and Running in data storage and recovery. We anticipate the two
businesses will be fully integrated within the next 3 months.
At this stage the Group does not intend to pay an interim dividend. However,
when recurring revenues build, creating a strong positive cash flow, the board
intends to implement a progressive dividend policy.
The Marketing Guild
The Marketing Guild continues to build its membership at the Platinum level
where contribution and retentions are higher. During the period we reintroduced
member conferences, which non-members can attend for a fee. We successfully
recruited several new Platinum members at this conference and intend to hold
further conferences later in the year.
Wired Gov
Wired Gov continues to build advertising revenues. This has been helped by the
growth of the subscriber base, which now exceeds 12,000. In addition, the very
recent launch of our first newsletter proved successful with all the advertising
for the first edition being completely sold.
Back up and Running
Back up and Running announced during the period that it had secured preferred
supplier status with ABTA. This was a significant strategic step, as it will
help Backup and Running expand its customer base from a strong reference
platform. We continue to develop our systems to improve customer service and
facilities.
Acquisition update
Ridgeway Technologies
The acquisition of Ridgeway Technologies was completed on 27 June 2005. The
company, which trades as Willow Starcom, specialises in providing managed
services in the following areas:
- data storage and recovery
- network management and support
The technology fits in well with Back up and Running and is a complementary
product offering. We therefore see many cross selling opportunities as well as
the enhancement of customer service and product development resources. These two
businesses will be fully integrated within the next 3 months and we expect
strong growth following the integration.
We acquired the entire issued share capital of Ridgeway Technologies for an
initial consideration of £700,000, of which £650,000 was satisfied in cash and
the balance by the issue of 500,000 new Ordinary Shares. At the time of the
acquisition, Willow Starcom had net cash of £206,000.
Deferred consideration will be paid on the basis of 5 times the operating profit
of Willow Starcom over £100,000 for the year ended 31 December 2005, subject to
a maximum deferred payment of £1.1 million.
Due North
The acquisition of Due North, a developer and provider of e-commerce solutions,
primarily to the public sector and emergency services, was completed yesterday.
The range of products include an e-tendering module combined with an e-auction
module. The company produced turnover of £695,000 and unaudited operating
profits of £213,000 for the 9 months to May 2005.
The initial consideration for Due North is £1.5m, of which £1m has been paid in
cash and £500,000 has been satisfied by the issue of 4,686,034 new ordinary
shares at 10.67p per share in Access Intelligence. As at 5 July 2005, Due North
had £160,000 of net assets, including net cash balances of £100,000. Additional
consideration will be payable dependent upon the results of Due North for the 2
years ending 30 November 2007. Deferred consideration of up to £600,000 will be
paid for the year ending 30 November 2006 conditional upon operating profits
exceeding £350,000 and further deferred consideration of up to £750,000 will be
payable conditional upon operating profits in the year ending 30 November 2007
exceeding £450,000. The deferred consideration will be satisfied by the issue of
new ordinary shares in Access Intelligence, although, the vendors of Due North
may instead elect to receive up to 20% of the deferred consideration in cash. We
believe the structure of the deal provides an excellent incentive for the
management of Due North to exploit the current market for e-commerce solutions
in the public sector and build up a significant recurring revenue income stream
for the Access Intelligence group.
Following the completion of the acquisitions of Willow Starcom and Due North,
the group will have cash balances of approximately £650,000. Any cash element of
the deferred consideration will be payable from the Group's own resources.
Employees
As ever the continual expansion of our client base would not be achieved without
the effort of all our employees. I would like to thank them all for their hard
work in the period.
Outlook
The group is now trading profitably before goodwill amortisation. We have
budgeted for our existing businesses to deliver further improvements in their
operating performances in the second half of the year while we continue to look
for further businesses to join the group. We are encouraged by the acquisition
opportunities available to us but we will continue to be cautious in evaluating
the businesses before proceeding.
Jeremy Hamer
Chairman
6 July 2005
ACCESS INTELLIGENCE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
SIX MONTHS ENDED 31 MAY 2005
Unaudited Unaudited Audited
6 months 6 months 13 June 2003 to
ended ended 30 Nov
31 May 31 May 2004
2005 2004 £000s
£000s £000s
Turnover
Continuing operations 391 299 543
---------- --------- ---------
Operating loss before goodwill
amortisation (53) (114) (251)
Goodwill amortisation (61) (61) (122)
---------- --------- ---------
Operating loss (114) (175) (373)
Interest (payable) / receivable 61 (4) (8)
---------- --------- ---------
Loss before taxation (53) (179) (381)
Taxation - - 41
---------- --------- ---------
Loss after taxation (53) (179) (340)
Dividends - - -
---------- --------- ---------
Retained loss (53) (179) (340)
========== ========= =========
Loss per share (0.10p) (0.63p) (1.59p)
Fully diluted loss per share (0.09p) (0.56p) (1.53p)
Loss per share excluding goodwill
amortisation 0.01p (0.42p) (1.02p)
ACCESS INTELLIGENCE PLC
CONSOLIDATED BALANCE SHEET
AT 31 MAY 2005
Unaudited Unaudited Audited
As at As at As at
31 May 31 May 30 Nov
2005 2004 2004
£000s £000s £000s
Fixed assets
Intangible assets 2,604 2,506 2,433
Tangible assets 102 125 83
---------- --------- ---------
2,706 2,631 2,516
Current assets
Stocks 14 - 14
Debtors 217 96 121
Cash at bank and in hand 2,420 132 31
---------- --------- ---------
2,651 228 166
Creditors: amounts due within one year (210) (176) (361)
---------- --------- ---------
Net current assets (liabilities) 2,441 52 (195)
---------- --------- ---------
Total assets less current liabilities 5,147 2,683 2,321
Creditors: amounts falling due after more
than one year (31) (181) (142)
---------- --------- ---------
Net assets 5,116 2,502 2,179
========== ========= =========
Share Capital and Reserves
Called up share capital 482 332 332
Share premium account 5,027 2,375 2,187
Profit and loss account (393) (205) (340)
---------- --------- ---------
Equity and non-equity shareholders' funds 5,116 2,502 2,179
========== ========= =========
ACCESS INTELLIGENCE PLC
CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 31 MAY 2005
Unaudited Unaudited Audited
6 months 6 months 13 June 2003 to
ended ended 30 Nov
31 May 31 May 2004
2005 2004 £000s
£000s £000s
Net cash outflow from operating (177) (478) (540)
activities
Returns on investments and servicing
of finance
Interest paid - (4) (17)
Interest received 61 - 9
Net cash inflow / (outflow) from
servicing of finance 61 (4) (8)
Capital expenditure
Payments to acquire intangible (22) (7) (98)
assets
Payments to acquire tangible assets (27) (31) (49)
Net cash outflow from capital (49) (38) (147)
expenditure
Acquisition and disposals
Purchase of subsidiary undertaking - - (1,753)
Net cash outflow from acquisitions - - (1,753)
and disposals
---------- --------- ---------
Net cash outflow before use of liquid
resources and financing (165) (520) (2,448)
Financing
Issue of equity share capital 3,000 - 2,727
Cost of share issue (187) - (208)
Repayment of term loans (218) (29) (82)
---------- --------- ---------
Net cash inflow /(outflow) from 2,595 (29) 2,437
financing
---------- --------- ---------
Increase / (decrease) in cash 2,430 (549) (11)
========== ========= =========
ACCESS INTELLIGENCE PLC
INTERIM ACCOUNTS
FOR THE PERIOD 1 DECEMBER 2004 TO 31 MAY 2005
1. The unaudited results for the six months have been prepared on a
basis consistent with the accounting policies disclosed in the
Group's 2004 accounts and do not constitute statutory accounts within
the meaning of Section 240 of the Companies Act.
2. The figures for the period ended 30 November 2004 have been extracted
from the statutory accounts, which have been delivered to the
Registrar of Companies and received an unqualified audit report.
3. The calculation of earnings per share is based on the loss after
taxation divided by the weighted average number of ordinary shares in
issue, being 55,780,851 (6 months to 31 May 2004 - 28,253,378 and
period ended 30 November 2004 - 21,361,595).
4. The weighted average number of ordinary shares used in the
calculation of diluted earnings per share is 55,996,318 (31 May 2004
- 31,800,878 and period ended 30 November 2004 - 22,200,095). This
has been adjusted for the effect of potentially dilutive share
options granted under the Company's Share Option and Management
Incentive Schemes.
5. An adjusted earnings per share calculation, which excludes goodwill
amortisation, is calculated on the basic eps basis to allow
shareholders a clearer understanding of the trading performance of
the Company.
6. This statement is being sent to the shareholders of the Company and
will be available at the Company's Registered Office at Regency
House, Westminster Place, York Business Park, York, YO24 6RW.
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