ABAL.L Regulatory News (ABAL)

12 Jun 2007 07:02

Imaginatik PLC12 June 2007 Imaginatik Plc ("Imaginatik" or the "Company") Preliminary Results for the year ending 31 March 2007 Imaginatik plc (AIM: IMTK), a leading provider of Innovation and CollaborativeProblem Solving software and process, announces its first preliminary resultssince its successful admission to trading on AIM in December 2006. Financial Highlights • Turnover up 77% to £2.5m (2006: £1.4m) • Operating loss before exceptionals of £0.4m (2006: profit £0.05m) • Loss before tax of £1.1m (2006: profit £0.02m) • Cash at bank and in hand of £0.9 (2006: £0.14) • Company raised £1.5m (net of expenses) in December 2006 by way of a placing Corporate Highlights • Consolidation of industry leading position with addition of GE Aviation, IBM, KPMG and Lexmark as clients, among others • Appointment of UK MD; with 4 pilot projects signed in the UK and Europe, post period end • Total number of active customers on pilot and long term contracts at year end was 50, (2006: 37) • Strengthening of the partnership with IBM Chief Executive, Mark Turrell commented: "This has been a year of transition,establishing the foundations for further growth supported by a successful IPO onAIM. Whilst the process of the IPO was time consuming and did have a temporaryadverse effect on the operational performance of the business, the Directorsconsider the IPO an integral part of the Company's business development plan.With the progress that has been made since the start of 2007, and the changingdynamics of the market, we look forward to continued success in the future. "Since we came to market, we have signed further European projects andstrengthened relationships with our European partners, enhancing our capacity toassist major global organisations to innovate. This is partly a function of oursuccess in bringing our offering to the market, but also the result of a muchgreater appreciation by the market of the business benefits that can be derivedfrom tapping into the 'collective genius' within organisations." For further information please contact: Imaginatik plc Tel: 020 7917 2975Mark Turrell, CEO / Shawn Taylor, CFO WH Ireland Tel: 0121 616 2101Tim Cofman / Katy Birkin ICIS Tel: 020 7651 8688Tom Moriarty / Laura Cocker Chairman's Statement Imaginatik was admitted to the market in December 2006 and I am delighted to beable to report to shareholders on a successful year. Since its inception in 2000, Imaginatik has grown into an international company,providing market leading innovation technology and services to some of theworld's top organisations. In the last year we have expanded our offices in boththe UK and US, and this year achieved revenue growth of almost 80% to £2.5m. We are the leading global provider of innovation and problem-solving technologyand services. No other company has our depth of experience in this field, andthis is undoubtedly the key to our continued growth. The innovation market isgrowing at pace, both in the US, which continues to be our core market, and nowalso in the UK and Europe. Our blue chip client base continues to grow andincludes companies such as AstraZeneca, Chevron, Cargill, Coca Cola, ColgatePalmolive, General Electric, Hewlett-Packard, IBM, Merck, Pfizer, Weyerhaeuserand Whirlpool. We intend to continue this momentum into the next financial yearand beyond. The successful IPO in December of last year gave us the funds to invest infurther marketing and people, enabling us to capitalise on our market-leadingposition. I am delighted to welcome Geoff Carss as UK Managing Director withadditional responsibility for the Company's strategic partner programme. Sincejoining us in January 2007, Geoff has driven a successful programme here in theUK, increasing our UK client base to 6 companies, all of which are currentlyworking on pilot programmes. We hope to update shareholders on progress withthese pilots in the coming months. We were very proud to be given the Queen's Award for International Trade inApril 2007 in recognition of our substantial growth in overseas earnings and ourcommercial success. This is a great endorsement of our fast developing business. I would like to take this opportunity to thank our employees, partners andshareholders for their continued support. The current year has started slowerthan we would have liked but we are still looking forward to further progressfor the full year. Howard Cleveley MarshallNon-Executive Chairman12 June 2007 Chief Executive's Review The year ended 31 March 2007 has seen the achievement of a significant milestonein the development of Imaginatik. The Board took the decision to list on AIM atan early stage in our development, in order to gain access to funding and giveus the additional credibility of being a public company as we looked to enterthe next stage of our growth. Following our flotation and fund raising inDecember 2006, our efforts have now turned to the execution of our growthstrategy, and the delivery of our award winning software to an ever increasingnumber of global clients. In order to achieve scale in the business, we have increased our headcount from17 people at 31 March 2006 to 35 at 31 March 2007. The growth was mainly withinsales, marketing, development and customer support, with the geographical splitof the Company remaining evenly divided between the US and UK. Products and Services Idea Central is a software platform that enables our customers to solve businesschallenges rapidly and efficiently, providing benefits to the business in real,measurable, ways. During the year our product development has been focused onfurther increasing the scalability as well as the usability of our software,while better aligning the processes and systems to human behaviour. To that end- in conjunction with a partner we have worked with for a number of years - wedeveloped Orchid, an additional software module that incorporates an innovationpersonality test which integrates with the existing Idea Central softwareenvironment. This is a module that further helps differentiate the Company fromits competitors. The second release of the Orchid module will be launched in thenext few months. Early in 2007, we took the decision to accelerate an investment in our servercapacity, laying the foundations for the future scaling of the business. Thisadditional server capacity directly enabled us to support our first event forover 100,000 users post year end with Hewlett-Packard. Customer Growth We saw a significant increase in customer numbers over the period, with anadditional 8 customers moving from pilot contracts onto an annual contractduring the year, bringing the total number of customers on annual contracts to38. At the end of the period we had 12 companies on pilot contracts with us,compared to 6 at the end of March 2006, and we will be working to move them ontoannual contracts in the current financial year. Of particular note was the evolution of General Electric's account from a pilotproject to an annual contract. Also of significance was a project carried out byPfizer, a long-standing customer, which initiated the first open deployment ofour Idea Central software, allowing people outside of the organisation to takepart in its Pfizer Incubator programme, via an online portal. At the Imaginatik User Group Conference held in Boston in May 2007, Whirlpoolannounced that within a two month period the use of Idea Central had resulted inthe identification of $38m of cost savings - a great endorsement of the power ofour software and innovation process. Another client to benefit from our technology is Weyerhaeuser, which in thefirst two years of using Idea Central delivered $40m in net benefits. Chevronhas also benefited from the use of our software, as it was able identify sevenkey initiatives to boost customer loyalty for the Chevron franchise network. The Board believe that we are currently on average approximately 3% deployedacross all of the organisations in which we have an installation of oursoftware. Part of our growth strategy therefore is to continue to work withexisting customers on extending our reach into other areas of theseorganisations, including via the development of their open innovation platforms.During the period, Dow Chemical, Pfizer and Weyerhaeuser all increased theirnumber of annual licences and their use of our system. Partnering and Reselling A significant development towards the end of the year has been the introductionof our strategic partner programme. In this financial year our partnership withIBM in particular has had a material impact on our business. We currently have amaster service agreement with IBM in both the US and in Europe, allowing us topartner on specific opportunities. We are now examining ways in which we canfurther strengthen that relationship and expect to be able to updateshareholders in due course. We are also in the process of identifying additional consulting alliancepartners. We anticipate that this initiative will enable us to speed up thesales cycle, justify a higher price point and enable the winning of largerrevenue deals, whilst reducing our go-to-market cost and the overhead requiredfor the delivery of our services. Sales Strategy and Market As stated in our Admission Document we are seeing a considerable increase in thelevel of interest in innovation as a business process. This market dynamic isbeing jointly driven at board level and from within IT departments as well as bysales, marketing and HR departments, all of which are increasingly being given aremit to develop an innovation infrastructure. The pressure to innovate isgrowing as company boards are seeing the real and substantial benefits beingachieved by their competitors who have invested in this area, as they seek toincrease margins and gain competitive advantage. With this in mind, and by focusing on developing the right partner channels, wehave been able to rapidly gain access to the very top levels within major globalorganisations. We continue to build a large pipeline of opportunities both in the US and Europeand are confident of our ability to convert these opportunities and maintainhigh rates of growth in the coming year. Marketing Activities As a result of a growing awareness of the innovation market, the number ofspecific innovation related conferences has significantly increased in the lastyear. We sponsored and helped organise the first major UK innovation conference,hosted by the Financial Times in December 2006, and also sponsored the Front Endconference in Munich in January 2007, the Front End conference in Boston in May2007 and the World Innovation Forum in New York in June 2007. The funding fromthe IPO has enabled us to expand our presence at these conferences and take amore prominent sponsorship position. We have also seen a significant increase inthe number of attendees at our semi-annual user group events, with attendance upthreefold on the meetings held in 2006. In the last few months we have begun a series of webinars aimed at new prospectsas well as existing clients, as a means of demonstrating our capabilities anddifferentiating ourselves from our competitors. Geographic Expansion Since the appointment in January 2007 of Geoff Carss as UK Managing Director, wehave seen a significant increase in opportunities within the UK and Europe. Postyear end we have signed pilot contracts with several major UK organisations,including COSI, KPMG, Norwich Union, as well as a project for the internal useof our system within IBM. We are seeing new opportunities in the Australasian market through IBM, as wellas in Western Europe. The level of penetration of our type of technology remainsextremely low in the majority of markets and we expect to quickly benefit fromour first-mover advantage. Financial Review Turnover for the year ended 31 March 2007 grew by 77% to £2,491,708 (2006:£1,410,610). This was driven by increased sales into the customer base, andadditional customer acquisition in the US, UK and Europe. Revenue split betweenthe geographies was 95% USA and 5% UK and Europe (2006: USA 86%, UK 14%). The operating loss before exceptional items for the year was £432,567, movingfrom a profit of £46,618 in the previous year. This result was driven byincreased staff costs and operating charges, including the costs of the improvedserver capacity. There were exceptional costs of £611,930 (2006: £nil) inrespect of share awards provided to the key management team responsible for thefuture development of the business. We incurred an interest charge of £92,930(2006: £28,977) which arose mainly from the interest charged on various loannotes provided to the Company by certain employees and other individuals. Theseloan notes were converted into equity at the time of the IPO. This resulted in aloss before tax of £1,128,976 for the year (2006: profit of £17,641). Cash atbank and in hand at the year end was £862,446 (2006: £142,426). We raised £1.5 million (net of expenses) in December 2006 via a placing of27,793,345 ordinary shares at 7.5p per share, to fund the continued developmentof the business through the addition of further sales executives, marketingresources and implementation staff in both the US and UK, enabling the Companyto take advantage of the expanding market for its products. Board Appointments I would like to thank Howard Marshall, our Non-executive Chairman, and PaulMorland and Phil Nutburn, our Non-executive Directors, for their time andongoing support and guidance during the IPO process, and I look forward to theircontinuing support as we seek to grow our business. Current Trading and Prospects This has been a year of transition, establishing the foundations for furthergrowth supported by a successful IPO on AIM. Whilst the process of the IPO wastime consuming and did have a temporary adverse effect on the operationalperformance of the business, the Directors consider the IPO an integral part ofthe Company's business development plan. With the progress that has been madesince the start of 2007, and the changing dynamics of the market, we lookforward to continued success in the future. Since we came to market, we have signed further European projects andstrengthened relationships with our European partners, enhancing our capacity toassist major global organisations to innovate. This is partly a function of oursuccess in bringing our offering to the market, but also the result of a muchgreater appreciation by the market of the business benefits that can be derivedfrom tapping into the 'collective genius' within organisations. Mark TurrellChief Executive12 June 2007 Preliminary announcement of results for the year ended 31 March 2007 Consolidated profit and loss account Results before Exceptional Exceptional Note items items 2007 2006 £ £ £ £ Turnover 2,491,708 - 2,491,708 1,410,610 Other external charges (176,664) - (176,664) (61,582)Staff costs 2 (1,693,704) (611,930) (2,305,634) (791,649)Depreciation written off tangible fixed assets (18,626) - (18,626) (2,888)Other operating charges (1,035,281) - (1,035,281) (507,873) ______ ______ ______ ______ Operating (loss)/profit (432,567) (611,930) (1,044,497) 46,618 Interest receivable 8,451 - 8,451 -Interest payable (92,930) - (92,930) (28,977) ______ ______ ______ ______ (Loss)/profit on ordinary activities before taxation (517,046) (611,930) (1,128,976) 17,641 Taxation - - ______ ______ (Loss)/profit on ordinaryactivities after taxationtransferred to reserves (1,128,976) 17,641 ______ ______ (Loss)/earnings per share: Basic and diluted 3 (2.43p) 1,102.56p ______ ______ All amounts relate to continuing activities. Preliminary announcement of results for the year ended 31 March 2007Reconciliation of movements in shareholders' funds 2007 2006 £ £ (Loss)/profit for the year (1,128,976) 17,641Shares issued at nominal value 72,875 -Share premium arising on issue 1,690,235 -Share-based payments 446,949 - ________ ________Net increase in shareholders' funds 1,081,083 17,641 ________ ________Opening shareholders' deficit (469,600) (487,241) ________ ________ Closing shareholders' funds/(deficit) 611,483 (469,600) ________ ________ Preliminary announcement of results for the year ended 31 March 2007Consolidated balance sheet Note 2007 2006 £ £ £ £Fixed assetsIntangible assets 207,510 -Tangible assets 91,991 8,504 _____ _____ 299,501 8,504Current assetsDebtors 797,993 477,732Cash at bank and in hand 862,446 142,426 ________ ________ 1,660,439 620,158 Creditors: amounts falling duewithin one year (1,309,400) (936,391) ________ ________Net current assets 351,039 (316,233) ________ ________Total assets less current assets 650,540 (307,729) Creditors: amounts falling dueafter more than one year (39,057) (161,871) ________ ________ Net assets 611,483 (469,600) ________ ________ Capital and reservesCalled up share capital 72,876 1Share premium account 4 1,690,235 -Profit and loss account 4 (1,151,628) (469,601) ________ ________Shareholders' funds/(deficit) 611,483 (469,600) ________ ________ Preliminary announcement of results for the year ended 31 March 2007Consolidated cash flow statement 2007 2006 Note £ £ £ £ Net cash outflow from operatingactivities 5 (379,024) (76,392) Returns on investments andservicing of financeInterest received 8,451 -Interest paid (105,041) (14,875) _______ _______ Net cash outflow from returnson investments and servicing of finance (96,590) (14,875) TaxationCorporation tax received - 7,198 Capital expenditurePurchase of tangible fixed assets (102,113) (11,392)Purchase of intangible fixed assets (54,510) - _______ _______ Net cash outflow fromcapital expenditure (156,623) (11,392) _______ _______ Net cash outflow before financing (632,237) (95,461) FinancingInception of loans - 293,474Loan repayments (120,712) (6,654)Net proceeds of shares issued 1,472,969 - _______ _______ Net cash inflow from financing 1,352,257 286,820 _______ _______ Increase in cash 720,020 191,359 _______ _______ Preliminary announcement of results for the year ended 31 March 2007Notes to the preliminary announcement 1. Results and accounting policies The preliminary results have been prepared under the historical cost convention,in accordance with applicable Accounting Standards in the United Kingdom andwith the group's accounting policies as will be set out in the financialstatements for the year ended 31 March 2007. The preliminary results wereapproved by an authorised committee of the Board on 11 June 2007 and areunaudited. The financial information contained in this unaudited preliminary announcementdoes not constitute statutory accounts as defined by Section 240 of theCompanies Act 1985. There have been no changes in accounting policy in the year. 2. Exceptional items 2007 2006 £ £ Exceptional staff costs 611,930 - _______ _______ Certain directors and staff were issued shares upon the floatation of thecompany in respect of services to the company. In accordance with FRS 20'Share-based payment' these shares are recognised as an expense in the profitand loss account with a corresponding increase in equity. The exceptional staffcosts include the fair value of the shares issued together with the relatednational insurance and other issue costs. 3. Basic and diluted loss/earnings per share Basic (loss)/earnings per share (EPS) have been calculated in accordance withFRS22 'Earnings per share'. The calculation of EPS is based on losses of£1,128,976 (2006: a profit of £17,641) and on a weighted average number ofordinary shares in issue during the year of 46,456,587 (2006: 1,600). The share options issued on admission to AIM are considered to be anti-dilutive,and therefore diluted EPS equals basic EPS. 4. Reserves Share Profit premium and loss account account £ £ At 1 April 2006 - (469,601)Loss for the year - (1,128,976)Premium on shares issued in the year 1,690,235 -Share-based payments to employees - 446,949 ________ ________At 31 March 2007 1,690,235 (1,151,628) ________ ________ Preliminary announcement of results for the year ended 31 March 2007Notes to the preliminary announcement (continued) 5. Reconciliation of operating loss/profit to net cash outflow from operatingactivities 2007 2006 £'000 £'000 Operating (loss)/profit (1,044,497) 46,618Depreciation 18,626 2,888Share based payments 423,982 -Increase in debtors (320,260) (397,082)Increase in creditors 543,125 271,184 _______ _______ (379,024) (76,392) _______ _______ 6. Analysis of changes in net funds/debt Other non cash 2006 Cashflow changes 2007 £ £ £ £ Bank and cash 142,426 720,020 - 862,446 Debt due within one year:Bank loans (26,616) 19,995 (20,430) (27,051)Other loans (98,333) 23,333 75,000 - Debt due after more than one year:Bank loans (59,487) - 20,430 (39,057)Other loans (102,384) 77,384 25,000 - _______ _______ _______ _______ Net (debt)/funds (144,394) 840,732 100,000 796,338 _______ _______ _______ _______ Non-cash movements to other loans relate to the issue of shares in repayment ofloans. 7. Reconciliation of net cash flow to movement in net funds/(debt) 2007 2006 £ £Increase in cash in the year 720,020 191,359Cash inflow/(outflow) from bank and other loans 120,712 (286,820) _______ _______Change in net funds/(debt) resulting from cashflows 840,732 (95,461) Non-cash changes to net funds/(debt) 100,000 - _______ _______Movement in net funds/(debt) in the year 940,732 (95,461)Net debt at start of year (144,394) (48,933) _______ _______Net funds/(debt) at end of year 796,338 (144,394) _______ ______ This information is provided by RNS The company news service from the London Stock Exchange