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Intellego (ARGP)

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Tuesday 26 October, 2010


Interim Results for the 6 months to 30 Septembe...

                                                                 26 October 2010

                             Intellego Holdings plc
                         ('Intellego' or 'the Company')


The  Board  of  Intellego,  the  AIM  traded eLearning and compliance courseware
solutions  business, announces its unaudited interim  results for the six months
to 30 September 2010.


  * Revenues  are up  17% to £1,002,444  in the  first half of current financial
    year to March 2011 (2009: £854,067)
  * Net  profits of £63,734 have been achieved against last year's net losses of
  * Earnings per share are now positive at 0.02p per share (2009: loss per share
    of 0.02p)
  * Intellego  has benefited from  a combination of  a growing sales pipeline in
    our  target  markets  generated  by  a  new  sales  team  and  the impact of
    continuous overheads reductions
  * Recently  appointed channel development partners  are expanding the business
    in key market sectors
  * Investment in excess of £50,000 has been made in new product libraries,
    providing on-line courses in financial services and business compliance
    (anti-money laundering, data security, data protection and employment


  * The  outlook is for continued profitable trading  for October and to the end
    of the year
  * The sales team has expanded to eight personnel representing 40% of the
    company's staff to focus on vertical market sectors
  * Marketing  spend  is  being  increased  in  the second half to support sales
    delivery  and to increase  market awareness of  our new products and bespoke
    content solutions
  * Contributions from the sale of the NetDimensions distribution business and
    the Creditors Voluntary Arrangements are being released over the full
    financial year

Commenting  on these results Chairman Angus  Forrest, said: "The benefits of the
changes and investments introduced by the new executive team are feeding through
to the bottom line. The Company has recorded its first interim net profit in its
history.  We are  confident that  the business  will continue  to build  on this
performance with its new sales and product initiatives."


For further enquiries please contact:

Intellego Holdings plc                        Tel: 0208 977 8744
Angus Forrest / Robert Murphy

Beaumont Cornish Limited                        Tel: 020 7628 3396
Roland Cornish

Rivington Street Corporate Finance Limited        Tel: 020 7562 3373
Jon Levinson

Intellego Holdings plc

Unaudited Condensed Consolidated Interim Financial Statements for the period
30 September 2010

Chairman's Interim Statement at 30 September 2010

The benefits of the changes introduced by the new executive team are beginning
to be reflected in these interim accounts with the Company showing a profit for
the first time in its history.  The first six months show revenues of £1,002,444
(2009: £854,067) with a net profit of £63,734 (2009: net loss of £323,315).
 This improvement is in line with the reports in the annual accounts and at the

The positive results have been generated from a combination of greater sales
focus, the sale of our own higher margin products & services, the sale of part
of the business, further cost reductions and the release of CVA liabilities.

The Half Year

As noted in the annual report and accounts, we sold the EKP software
distribution business in April 2010 to NetDimensions (UK) Limited, for whom we
continue to act as a partner and reseller. The transaction's impact on our
results this period included the recognition of £176,000 in sales and an overall
28% improvement in gross margin to 77% from 49% last year. The Company Voluntary
Arrangements (CVAs) have reduced and phased the payments to our trade and HMRC
creditors, the benefit of which is partly realised in the current period through
a reduction in costs amounting to £106,816. The balance sheet shows net
liabilities of £624,712 although a further benefit from both these sources
amounting to £533,238 will be released in the second half.  Current liabilities
have been reduced by more than £1,000,000 and are now equivalent to net current

The cost reduction programme implemented over the last six month produced
annualised savings of £273,800.

The business is now focused on specific products and bespoke content development
within specialist markets, from which we expect to benefit from greater
expertise and deeper market penetration.  Over the six months with a smaller
workforce the employee balance has changed with the headcount percentage in
sales doubling and in-house production reducing by a third. The emphasis is
towards a flexible structure composed of an internal team of client facing and
design oriented subject matter experts supported by out-sourced contractors.

There are still further efficiencies to be realised but cost reduction is
unlikely to fall from current levels as we begin to invest some of the savings
in our sales team, new products and marketing initiatives.

Since the end of 2009 we have won three large new customer contracts for our
products and bespoke content. Each of these should develop into long term
relationships with contract values likely to be in excess of £100,000 over three
years. We are also developing channels to market and these channel partners are
beginning to contribute to our market presence and sales growth.

Markets and Products

Intellego's strategy is focused on the sale of content and related services
supported by a smaller software business on the back of which we convert
customer interest into the sale of content development and training services.
 This offers higher sales values, greater margins (77% compared to 49% as stated
above) and greater recurring revenues.  Our typical customers are medium and
large organisations operating in the financial services, retail, pharmaceutical
and healthcare markets and any others with compliance requirements.  We are
differentiating ourselves in our markets through expert knowledge of those

Custom content
E-learning courses developed specifically to a customer's requirement are one of
the Company's core offerings. We develop high quality learning products based on
a combination of expert sector knowledge, consulting, and expertise in
technology and methodology to transfer knowledge, to alter behaviour and to
improve risk management.

Published content and training courses
A recently formed division is selling products and courses developed by
Intellego on Anti-Money Laundering, Data Protection, Data Security and Equality.
Various other courses are in development for launch later this year.

We have begun to market a range of courses and learning products for a new set
of financial services exams, the RDR Level 4, which will be required for 50,000
wealth managers from 2012.  We offer a full set of JO modules and are developing
a range of RO modules which introduce innovative features to assist candidates
both to learn and measure their progress.

Several co-ordinated marketing activities have commenced which support the sales
team by raising Intellego's profile in order to generate sales leads and to
promote the value of the Company's products and services as a combined solution.
 The benefit of this activity will be realised not only this financial year to
31 March 2011 but also in future years.


We intend to build on the success of the first half year's results based on
existing activity levels, supported by a sales pipeline with a value of £2.4
million. We expect a positive net earnings result for the full year as our
product and marketing investments continue, sales improve and costs stay

I would like to thank every member of Intellego's staff for their contribution
in what has been a difficult period of change and to every shareholder for your
continued support.

Condensed  consolidated interim  statement of  comprehensive income  for the six
months ended 30 September 2010

                      Unaudited                  Unaudited
     Six months to 30 September Six months to 30 September               Audited
                           2010                       2009 Year to 31 March 2010

Note                          £                          £                     £

Continuing operations
 Revenue         1,002,444   854,067        1,853,266

 Cost of sales   (233,533)   (436,475)   (1,037,843)

 Gross profit    768,911     417,592     815,423

Operating charges before depreciation and
Amortisation                                     (599,297) (648,686) (1,524,226)

EBITDA before restructuring costs                169,614   (231,094) (708,803)

Restructuring costs                                                  (66,000)
                                                 (6,601)   -

EBITDA after restructuring costs                 163,013   (231,094) (774,803)

Depreciation and amortisation                                        (233,451)
                                                 (88,729)  (78,879)

Operating profit / (loss)                        74,284    (309,973) (1,008,254)

Finance income                                   -         -         -

Finance cost                                     (10,550)  (13,352)  (35,561)

 Profit / (loss) before tax expense   63,734   (323,325)   (1,043.815)

Tax expense                   -                10               -

Profit / (loss) for the
period attributable to equity
holders of the company        63,734           (323,315)        (1,043,815)

Other comprehensive income /                                    -
(expense)                     -                -

Total comprehensive income /
(expense) attributable to
equity holders of the company

                              63,734           (323,315)        (1,043,815)

                              ================ ================ ================

Earnings / (loss) per share attributable to the equity
 holders of the company during the period

Basic and diluted earnings
/(loss) per share
                            0.02p             (0.02p)           (0.58p)

                            ================= ================= ================

Condensed consolidated interim statement of financial position

                                        Unaudited          Unaudited 31 March
                                30 September 2010  30 September 2009 2010

                                                £                  £ £


Non-current assets

Property, plant and equipment                    28,022    75,677    51,599

Goodwill                                         206,289   278,295   206,289

Other intangible assets                          177,157   255,752   198,817

                                                 411,468   609,724   456,705

Current assets

Inventories                                      12,000    4,342     12,000

Trade and other receivables                      310,100   455,215   588,856

Cash and cash equivalents                        5,226     39,231    8,029

                                                 327,788   498,788   608,885

Total assets                                     738,794   1,108,512 1,065,590

Current liabilities

Trade creditors and other payables               315,690   667,250   1,268,303

Short-term borrowings                            43,086    123,244   105,449

                                                 358,776   790,494   1,373,752

Deferred income and other provisions             617,307   425,343   409,824

                                                 976,083   1,215,837 1,783,576

Non-current liabilities

Creditors falling due after more than 1 year     275,773   -         -

Long-term borrowings                             111,650   172,270   131,960

Total non-current liabilities                    387,423   172,270   131,960

Total liabilities                                1,363,506 1,388,107 1,915,536

Net assets / (liabilities)
                                                 (624,712) (279,595) (849,946)


Equity attributable to equity holders of the

Share capital                                879,934     831,567     853,017

Share premium account                        1,679,631   1,416,349   1,545,048

Merger reserve                               31,000      31,000      31,000

Shares to be issued                          -           -           -

Profit and loss reserve                      (3,215,277) (2,558,511) (3,279,011)

Total equity
               £                             (624,712)   (279,595)   (849,946)

Condensed consolidated interim statement of changes in equity (unaudited)

                Share                      Merger  Profit and loss
                capital      Share premium Reserve reserve          Total equity

                £            £             £       £                £

Balance at 1                                       (2,235,196)      (118,780)
 April 2009     661,567      1,423,849     31,000

Shares issued   170,000      (7,500)       -       -                162,500

Loss for the
period          -            -             -       (323,315)        (323,315)

Balance at 30
September 2009  831,567      1,416,349     31,000  (2,558,511)      (279,595)

Balance at 1
 October 2009   831,567      1,416,349     31,000  (2,558,511)      (279,595)

Shares issued   21,450       128,699       -       -                150,149

Shares to be
issued          -            -             -       -                -

Loss for the
period          -            -             -       (720,500)        (720,500)

Balance at 31                                      (3,279,011)      (849,946)
March 2010      853,017      1,545,048     31,000

Balance at 1                                       (3,279,011)      (849,946)
 April 2010     853,017      1,545,048     31,000

Shares issued   26,917       134,583       -       -                161,500

Profit for the
period          -            -             -       63,734           63,734

Balance at 30
September 2010  879,934      1,679,631     31,000  (3,215,277)      (624,712)

consolidated interim statement of cash flow
                Unaudited   Unaudited
            Six months to   Six months to       Audited
        30 September 2010   30 September 2009   Year to 31 March 2010

 Note                   £   £                   £

Cash flows from operating activities
Profit / (loss) after taxation                   63,734    (323,315) (1,043,815)

Adjustments for:

      Depreciation                               23,577    27,255    52,887

      Amortisation                               65,152    51,624    108,559

      Impairment                                 -         -         72,006

      Investment income                          -         -         -

      Interest expense                           10,550    13,352    35,561

      Decrease/(increase) in trade and other
receivables                                      278,756   236,587   102,945

      Decrease/(increase) inventories            -         233       (7,425)

      (Decrease)/increase in trade payables      (469,357) 280,737   304,797

Cash used in operations                          (27,588)  (275,001) (374,485)

Interest paid                                    (10,550)  (13,352)  (35,561)

Net cash (used in)/generated from operating
activities                                       (38,138)  (288,353) (410,046)

Cash flows from investing activities

 Investment in content and software      (43,492)   (21,264)   (22,818)

 Interest received                       -          -          -

 Net cash used in investing activities   (81,630)   (21,264)   (22,818)

Cash flows from financing activities
Proceeds from issue of share capital             161,500  (9,580) (312,649)

Proceeds from/(repayment of) long-term bank loan
                                                 (23,845) (9,607) (130,346)

Net cash from / (used) in financing activities      137,655  (19,187)  (442,995)

Net increase / (decrease) in cash and cash
equivalents                                         56,025   (451,875) 10,131

Cash and cash equivalents at beginning of period    (50,799) 239,895   (60,930)

Cash and cash equivalents at end of period          5,226    (211,980) (50,799)

Notes to the condensed consolidated interim financial statements

1General information

The  financial information set out in this  condensed interim report for the six
months  ended 30 September 2010 and  the comparative figures  for the six months
ended  30 September 2009 are unaudited.  The financial information  for the year
ended 31 March 2010 does not constitute statutory accounts as defined in Section
434 of  the Companies Act 2006.  The  Group's statutory financial statements for
the  year ended 31 March 2010, prepared  under International Financial Reporting
Standards   (IFRS),  received  an  unmodified  audit  report,  did  not  contain
statements  under section 498(2) or section 498(3) of the Companies Act 2006 and
have been filed with the Registrar of Companies.

2        Basis of preparation

These  September  2010 condensed  consolidated  interim  financial statements of
Intellego  Holdings plc are for the six months ended 30 September 2010.  They do
not   include  all  of  the  information  required  for  full  annual  financial
statements,  and should be  read in conjunction  with the consolidated financial
statements of the Group prepared under IFRS for the year ended 31 March 2010.

The  accounting policies applied are largely consistent with those of the annual
financial  statements for  the year  ended 31 March  2010, as described in those
financial  statements.  The only exception relates  to the taxation policy.  For
the  purpose  of  the  interims  the  tax  charge  on  the  underlying  business
performance  is calculated by reference to  the estimated effective rate for the
full year.
The group has net liabilities of £624,712 at 30 September 2010.  Net liabilities
would be reduced to £7,405 should all deferred income and provisions of £617,307
(largely  generated from the sale of the NetDimensions business and the CVAs) be
released to profit at 30 September 2010.

 3        Segment analysis

The  accounting policy for identifying segments  is based on internal management
reporting information that is regularly reviewed by the executive.
Intellego  operates  three  main  business  segments  Distribution, Services and
Publishing.   The activity undertaken by the  Distribution segment is the resale
of   software  developed  by  third  parties.   The  Services  segment  includes
consulting,  customisation, the development of content and the integration of e-
learning   systems.    Maintenance   of  these  systems  is  undertaken  by  the
Distribution  segment.  The Publishing  segment includes the  sale of internally
generated  content and products.  The revenues  and net result generated by each
of Intellego Holdings plc's business segments are summarised as follows:

6 months to 30 September 2010
           Distribution   Services   Publishing   Group

           £              £          £            £

 Revenue   426,312        291,646    284,486      1,002,444

 Profit for the period   27,104   18,543   18,087   63,734

6 months to 30 September 2009
           Distribution   Services   Publishing   Group

 Revenue   323,060        366,799    164,208      854,067

 (Loss) for the period   (50,867)   (250,711)   (17,737)   (323,315)

Year to 31 March 2010
           Distribution   Services   Publishing   Group

 Revenue   1,051,588      530,692    270,986      1,853,266

 (Loss) for the period   (463,581)   (477,860)   (102,374)         (1,043,815)

4        Earnings per share

The  calculation of  basic earnings  per share  is based  on a profit before tax
expense  for  the  period  of  £63,734  (losses 31 March 2010: (£1,043,815), 30
September   2009: £323,325)   and   on  263,546,682 ordinary  shares  (31  March
2010: 178,392,927, 30 September  2009: 147,217,459), being the  weighted average
number of ordinary shares in issue during the year.

The profit attributable to ordinary shareholders and the weighted average number
of  ordinary shares for the purpose of calculating the diluted earnings/loss per
share are identical to those used for the basic earnings/loss per share.


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(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
Source: Intellego via Thomson Reuters ONE


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