Final Results

CPL RESOURCES PLC 13 October 1999 Preliminary Announcement of Results for the Year Ended 30 June, 1999 HIGHLIGHTS 1999 1998 Increase Euro'000 Euro'000 % Turnover 20,761 11,901 74.4 Profit before tax 3,153 1,154 173 Profit per ordinary share 6.6c 2.2c 199 At a meeting of the Board of Directors, the financial statements of the Group for the year ended 30 June, 1999 were approved. The Group profit and loss account balance sheet and cash flow statement, with comparative figures for the previous year, are attached. The following is the text of the Chairman's statement. CHAIRMAN'S STATEMENT Results & Financial Position The year ended 30 June 1999 was the most successful to date for CPL Resources, culminating in the admission of the company to the Developing Companies Market (DCM) and the Alternative Investment Market (AIM) in June 1999. Profits and earnings per share for the year were in line with the forecast made at the time of flotation. Turnover for the year was more than 70% higher than the previous year, reflecting substantial growth in all areas of business. At 15.4%, the Group's operating margin for the year was strong. The Group's financial performance and financial position are dealt with more fully in the Chief Executive's Review. Remuneration As part of the Group's policy to attract and retain quality staff, a staff share option scheme was established during the year. The scheme is available to all full time employees and full time executive Directors. Corporate Governance The Board seeks to adhere to the highest standards of corporate governance at all times. Details of compliance are set out in full in the Directors' Report. It is the Board's policy to comply with best practice in this crucial area at all times. Appointment of Directors The Board is delighted to welcome Peter Malone and Pat Garvey to the Board as non-executive Directors with effect from 22 June 1999 and looks forward to availing of their extensive business experience and expertise. Our People Ours is, by definition, a real 'People Business'. Its success is directly attributable to the talent, energy and commitment of our team. On behalf of the Board I would like to express our appreciation and gratitude for all the hard work and efforts of all our people during the year. The flotation process imposed significant additional demands on many of them and they all responded to the challenge with energy and enthusiasm. Outlook Record levels of sales and profitability was achieved in the past year despite ever increasing competition. The Directors believe that the Group will continue to grow strongly for the following reasons: * the significant growth of the IT market from which a high proportion of the Group's turnover is derived; * the growth of IT contracting as a result of an increasing appreciation of the benefits of outsourcing by companies and an increasing trend towards freelancing by IT professionals; and * the range of opportunities to expand the Group's business both geographically and by market sector, through continued organic growth and by acquisition. The Directors believe that the Group's current operating formula provides a sound base for the future, which we view with confidence. Profits before tax for the year ended 30 June 1999, amounted to Euro3.15 million, an increase of 175% on the previous year. Turnover for the year amounted to Euro20.7 million, an increase of 73.7% on the previous year and basic earnings per share increased from 2.2 cents at 30 June 1998, to Euro 6.6 cents at 30 June 1999. JOHN HENNESSY Chairman CHIEF EXECUTIVE'S REVIEW The last year has been one of the most successful for CPL. In 1999 we obtained a Stock Exchange listing on the Developing Companies Market (DCM) and the Alternative Investment Market (AIM). Our financial performance was strong; we increased sales by 74% to Euro20.8 million and operating profits to Euro3.2million. Basic earnings per share increased from Euro2.2 cents at 30 June 1998, to Euro6.6 cents at 30 June 1999. Growth Each of our Divisions performed at record levels with growth in overall gross profit of 78%. Our contracting company CPL Solutions provides IT professionals on a contract basis to a wide range of indigenous / international clients. Turnover in this division has increased by 70% over the previous year. A number of important new clients were gained and demand for experienced IT contractors remained high during the year. Computer Placement places IT professional into technical, middle and senior management positions, on a permanent basis. This company increased its turnover by 89% over the previous year. This growth has been achieved through the strong partnerships we have developed with our key clients. Computer Placement has been particularly successful in winning new preferred supplier agreements. People The skills and experience of our people is fundamental to our ability to grow. The quality and range of our service offerings depends entirely on their dedication and professionalism. I would like to thank all our employees for their contribution to our success. We will continue to recruit and develop new talent to assist us in growing all our divisions. The Group now employs 79 people compared with 56 in June 1998. Systems During the year we invested in developing and upgrading our computer systems. We installed EZAccess an automated recruiting system which will sustain the Groups anticipated growth both in Ireland and overseas. The Group has conducted a review of key computer systems and the Directors are satisfied that these systems are Year 2000 compliant. Prospects Market conditions were strong in the year under review. General economic buoyancy and the emergence of many new start-ups particularly in the e-commerce and telecommunications areas contributed to the growth in the IT market. CPL is well positioned to take advantage of this growth. Since June 1999 we have established CPL Telecoms to provide both permanent and contract staff to the growing telecommunications industry. We have opened our Belfast office and our regional offices have made an excellent start to the year. Sales in all our divisions are well ahead of the same point last year and we therefore remain confident of the outcome for the current year. Financial Review The results for the year show an increase in the Group's total turnover of 74% to Euro20.8m. Profit after tax of Euro2,185,000 was recorded. Basic earnings per share increased to 6.6 cents, up from 2.2 cents. The Group recorded cash outflows before financing of Euro1 million. The placing generated a cash inflow of Euro2.2 million, resulting in a net cash inflow for the Group for the year of Euro2 million. No dividends were declared or paid during the prior period. The Groups net assets at 30 June 1999 amounted to Euro5,348,000. ANNE HERATY Chief Executive 1999 ANNUAL REPORT AND ANNUAL GENERAL MEETING The 1999 annual report and accounts is being posted to shareholders today and the annual general meeting of the Company will be held on 15 November, 1999. Copies of the annual report will be available to the public at the Company's head office, 83 Merrion Square, Dublin 2. CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 1999 30 June 30 June 1999 1998 Euro'000 Euro'000 Turnover 20,761 11,901 Cost of sales (13,184) (7,642) -------------------------- Gross Profit 7,577 4,259 Administrative expenses (3,755) (2,749) Distribution expenses (621) (347) -------------------------- Operating Profit 3,201 1,163 Interest payable and similar charges (48) (9) Profit on Ordinary Activities before Taxation 3,153 1,154 Taxation on profit on ordinary activities (968) (420) -------------------------- Profit for the Financial Year 2,185 734 Profit and Loss Account, start of year 1,063 329 -------------------------- Profit and Loss Account, end of year 3,248 1,063 ========================== Profit per ordinary share 6.6c 2.2c ========================== CPL RESOURCES PLC CONSOLIDATED BALANCE SHEET - 30 JUNE 1999 30 June 30 June 1999 1998 Euro'000 Euro'000 Fixed Assets Tangible assets 1,040 738 -------------------------- Current Assets Inventory - work in progress 137 51 Debtors 6,947 3,188 Cash at bank and in hand 4,534 515 -------------------------- 11,618 3,754 Creditors : amounts falling due within one year (6,744) (2,925) -------------------------- Net Current Assets 4,874 829 -------------------------- Total Assets less Current Liabilities 5,914 1,567 Creditors: amounts falling due after more than one year (506) (444) Provisions for Liabilities and Charges (60) (60) -------------------------- Net Assets 5,348 1,063 ========================== Capital and Reserves Called up share capital 3,620 3,372 Capital conversion reserve fund 57 - Share premium 1,780 - Merger reserve (3,357) (3,372) Profit and loss account 3,248 1,063 -------------------------- Shareholders' Funds - all Equity 5,348 1,063 ========================== CPL RESOURCES PLC GROUP CASH FLOW STATEMENT - 30 JUNE 1999 30 June 30 June 1999 1998 Euro'000 Euro'000 Net Cash (Outflows)/Inflows from Operating Activities (328) 475 Returns on Investments and Servicing of Finance (48) (9) Taxation (410) (46) Capital Expenditure and Financial Investment (223) (611) -------------------------- Cash Outflow before Financing (1,009) (191) Financing 2,215 403 Amounts due to Shareholders 2,264 - -------------------------- Increase in cash 3,470 212 ========================== Reconciliation of Net Cash Flow to Movement in Net Debt Increase in cash in the year 3,470 212 Cash outflow from decrease in debt and lease financing (114) (460) -------------------------- Movement in Net Debt in the Year 3,356 (248) Net (Debt)/Funds, beginning of year (102) 146 -------------------------- Net Funds (Debt), end of year 3,254 (102) ========================== For further information please contact: Conail O'Morain Anne Heraty Slattery PR CPL Resources plc Tel: 353 1 661 4055 Tel: 353 1 614 6000

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