AGM Statement & Trade Update
Anite Group PLC
24 September 2003
For immediate release Wednesday, 24 September 2003
Anite Group plc
AGM Statement & Trading Update
At the Annual General Meeting of Anite Group plc, the international IT solutions
and services company, to be held later today, Alec Daly, Chairman, will make the
following remarks:
Current Trading and outlook
'The current financial year has started slowly but in line with our expectations
with overall trading conditions remaining tough. As previously indicated, in
view of these trading conditions, the restructuring programme and other one off
costs, together with higher development spending, profitability in the first
half will be down on the previous half year but again in line with our
expectations. Although only four months into the current financial year our full
year expectations have not changed.
In early September we reached a final settlement with the Group's former Chief
Executive. The severance payment of £725,000, which has been paid in part, is
subject to full mitigation provisions.
John Hawkins made a significant contribution to Anite but his departure
recognised that a different kind of Chief Executive was required to achieve the
consolidation of the business. We wish him well in his future ventures.
We continue to make progress in restructuring the business having successfully
completed the headcount reduction of 130 at a cost of £2.1m, as well as
resolving a number of other issues in respect of past acquisitions and
contracts.
As previously indicated the local government applications solutions part of our
Public Sector business continues to present a challenge to management and whilst
the implementation of the cost reduction and cash management plans are well
underway and achieving results, making the fundamental changes to its business
will take time.
Strong cash generation has remained a characteristic of Anite's business and
will enable the Group to pay out £7.8m of acquisition and earnout commitments by
the end of September (out of £11m anticipated to be paid in the first half)
whilst keeping well within its banking facilities. Net debt is, as expected,
anticipated to peak in the first half due to lower profitability, restructuring
costs and earnout payments.
In the year to date order intake has progressed well, although sales are
slightly lower than the previous year. This combined with continuing progress on
cash management and cost reduction plans means that profitability for the full
year remains consistent with our expectations.
The Group has seen encouraging order intake of £54.6m in the year to date. The
strongest performance continues to be within Public Sector where a number of new
orders have been signed, and also with some encouraging orders in Telecoms -
Travel and Consultancy have remained weak as expected.
We intend to announce a trading update for the six months ended 31 October 2003
in November.
Earnout renegotiations update
'In July we indicated that 100% of the Group's total potential earnout
liabilities had been realised, renegotiated or capped. Further progress has been
made in renegotiating Parsec's earnout due to some major changes in that
business.
Agreement has therefore been reached with the vendors of Parsec to settle their
outstanding earnout (maximum total of £6.8m payable in Anite's financial year
2005/6) for £873,000, to be paid in guaranteed loan notes, repayable after one
year. This, together with other minor adjustments, has reduced the total future
cash earnout liability from £25.4m to £19.5m, whilst bringing forward all
remaining 2005/6 financial year liabilities, thus ensuring that all outstanding
earnouts will have been paid out by the year ended 30 April 2005, subject to
performance.'
Chief Executive & succession planning
'I am pleased to report considerable progress in our search for a new Chief
Executive. We are currently in final negotiations with an individual and hope to
make an announcement very soon.
Following an appointment, David Thorpe, the Group's interim Chief Executive,
after a short period of transition, will revert to being a non-executive
director of the Group.
Against the recent changes, the key task of the Board has been to stabilise and
strengthen the management of the business whilst ensuring an element of
continuity. Thus I have stood for re-election with the intention of remaining
Chairman for at least another year to bring about a restructuring and
strengthening of the Board.
Once the new Chief Executive has been appointed, and assuming that continuing
progress is made by the Group in 2004, having been Chairman for nearly 8 years
it is right and proper that I stand down and my successor be identified. To that
end the Board will be strengthened during the current financial year and
succession plans announced at the 2004 AGM.'
- Ends -
For further information, please contact:
Anite Group plc www.anite.com
David Thorpe, interim Chief Executive 0118 945 0129
Christopher Humphrey, Group Finance Director
Weber Shandwick Square Mile
Reg Hoare/Sara Musgrave 020 7076 0700
This information is provided by RNS
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