Access Intelligence Regulatory News (ACC)

26 Jul 2007 07:01

Access Intelligence PLC26 July 2007 FOR RELEASE 7.00AM 26 July 2007 ACCESS INTELLIGENCE PLC ("Access Intelligence" or "the Group") "Access Intelligence is a software and Computer Services group of companies providing business critical and legislative driven services to both public and private sectors on a recurring basis" UNAUDITED INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 31 MAY 2007 Unaudited Unaudited Audited 6 months ended 6 month ended Year ended 31 May 2007 31 May 2006 30 Nov 2006 £000s £000s £000sTurnover 1,738 1,764 3,677(Loss)/profit before tax,goodwill and amortisation (114) 192 558(Loss)/profit before tax (323) 46 92Adjusted earnings per share (0.08p) 0.2p 0.55pDividend Nil Nil Nil Key messages * Contract delays at MS2M and a drop in storage solution sales at Willow Starcom reduce H1 2007 profits * Framework contract won for the North West County Councils by Due North, now enabling us to work with any public authority in England and Wales * Approximately £400,000 of long term public sector contracts won by Compliance Software * MS2M to launch a new series of internet based compliance services in the Autumn targeted at financial services, retail and automotive sectors * Encouraging response to a strategic review at Willow Starcom that identified e-mail archiving as the leading proposition for the company going forward * A 10% increase in Group recurring revenues to £186,000 per month * Net cash of £693,000 For further information: Access Intelligence plc Jeremy Hamer (Chairman) 01904 520840Brendan Austin (Chief Executive) 01904 520840Colin Davies (Finance Director) 01904 520840 Blue Oar Securities PlcDavid Seal / Shane Gallwey 020 7448 4400 Cubitt Consulting Ltd Brian Coleman-Smith / James Verstringhe / Leanne Denman 020 7367 5100 Background note Access Intelligence is a group of Software and Computer Services companiesproviding business critical compliance and legislative driven services to bothpublic and private sectors on a recurring revenue basis. Since the flotation onAIM in November 2003, the Group has made three acquisitions. The Group today Access Intelligence is based in York with subsidiaries in York, Stockport,Greater Manchester, Chorley, Lancashire and Newcastle upon Tyne. The company has two principal divisions which are: • Compliance software and services division: This includes a range of software including The Virtual Compliance OfficerTMwhich enables companies in the retail financial services sector to support theircustomer acquisition process whilst also ensuring that they comply with everincreasing regulations from the EU and the FSA. ProContractTM our suite of sourcing and procurement software streamlines andreduces costs of tendering and contract management for both buyers and suppliersin the public and private sectors. The government has the objective that allpublic sector bodies comply with its directive to use methods such as electronictendering for goods and services in order that it can meet its plannedreductions in public spending. • Data management division: The architecture and provision of high availability systems for mission criticalapplications that enable customers' data to be available at all times in theevent of computer failure. Backup & RunningTM our online offsite data storage and retrieval via secure datacentres. Email archiving. There is an ever increasing compliance emphasis driven byinitiatives such as Sarbannes-Oxley to ensure data is held appropriately and canbe retrieved easily when required. The business model The Group's income strategy is to build repeating revenues delivered throughrecurring contracts ranging between one and five years. This model providesexcellent visibility of future revenues and, with effective customer retention,outstanding gross margins over the longer term. The strategy for growth The strategy is to acquire businesses which have good management and high growthpotential that fit the revenue model while, at the same time, adding value tothe Group's existing services. The businesses acquired will have substantial autonomy to develop within budgetsagreed with the Group Chief Executive and Finance Director, whilst benefitingfrom the experience and cross selling opportunities provided by being part of anexpanding group of companies. New companies to the group can take advantage ofback office facilities where appropriate thus enabling them to concentrate onthe core activities of customer acquisition, service delivery and productdevelopment. At this stage of the Group's development, the Central Group Executive Team,which is based in York, will be kept to a maximum of four people, includingsupport staff. The Non-Executive Directors will continue to be involved insourcing and evaluating potential acquisitions and monitoring the performance ofthe Group. ACCESS INTELLIGENCE PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2007 Chairman's Statement I am pleased to announce our results for the 6 months ended 30 May 2007. Despitean encouraging start the first half has faltered due to contract delays at MS2Mand a drop in storage solution sales at Willow Starcom. As a result our internalprofit expectations for the year ending 30 November 2007 have been reduced.Despite this setback, progress has been considerable on a number of fronts andwe remain optimistic about the potential for both our Data Management andCompliance divisions going forward. Results Group turnover was broadly in line with last year at £1,738,315 (2006:£1,763,745). The loss before tax and goodwill amortisation and interest was£117,707 (2006: Profit £190,359). The adjusted loss per share slipped to (0.08p)(2006: 0.20p). The Group had net cash at 31 May of £693,000. The Group is notproposing to pay an interim dividend on the ordinary shares but remains intenton paying a maiden dividend when appropriate. Recurring revenue at May 2007increased by 10% this financial year to £186,000 per month. The Year in focus The emphasis in the first half has been to develop the profit potential of the 3key businesses we acquired over the last 2 years. Unfortunately this hascoincided with a disappointing sales period but progress nevertheless has beenmade. Willow Starcom: - The market for traditional data storage has been verycompetitive and Willow has, as a result, missed out on a number of contracts. Wehave looked at a number of alternative strategies to improve sales and increasemargins and concluded that e-mail archiving, for which there is an increasingneed, would be the leading proposition for the company. It is early days but theresponse so far has been encouraging. Due North: - Due North has had a good start to the year and has seen itsrecurring revenues climb quite quickly with an increase of 18% at the periodend. It has completed the re-launch of its suite of procurement softwareProContractTM with a significantly enhanced product. Most importantly it landeda framework contract with the North West County Councils which allows Due Northproducts to be used by all public sector authorities in England and Wales goingforward. This means that government bodies can buy ProContractTM without havingto go through the tender process, thus saving them considerable expense. Duringthe period it has secured three contracts with the NHS and is shortlisted on twosignificant private sector deals. Finally it hosted an auction recently onbehalf of a major Police force and saved the force approximately £250,000, whichwas nearly 50% of its initial computer hardware budget. MS2M:- The 6 months ended with a frustrating lack of sales success due mostly toproject delays by two large financial institutions. However, alongside thecompany's core training and competence products for FSA regulated sales forces,the company is about to launch a series of internet based services which willopen up further opportunities with financial services companies and will alsoprovide new prospects in the retail and automotive sectors. The products will befaster and less expensive than existing tools in the market. Followingpre-launch appraisals by industry sources the new service has been identified asa key component in a company's compliance toolkit. Although we budgeted for somesales in the last quarter of this financial year, we expect to see most of thebenefits coming through in the financial year commencing on 1 December 2007. Product Development The Group continues to place great emphasis on developing its product range andthis has continued during the period but, following a review of projects inprogress, the directors have reassessed the carrying value against the expected useful lives of certain previously capitalised projects. Consequently the neteffect on the value of intangible assets in the six month period is relativelyneutral subject to amortisation. Administration Expenses The £280,000 increase in administration expenses is due to MS2M's £220,000 ofadministration costs in the first half not present last year and also astrengthening of our financial accounting team and marketing programmes duringthe period. Our business model and strategy The Group's objective is to acquire and build businesses which providecompliance based software or data management services to both the private andthe public sector by way of recurring revenue contracts lasting between one andfive years. This model should provide excellent visibility of future revenuesand, with effective customer retention, strong gross margins over the longerterm. Staff Our future prosperity is in large measure dependent on the ability and loyaltyof our staff. Their specialist knowledge and skills are key to providing ourvalue added services to our customers. On behalf of the board I would like to thank our employees for their continuedcommitment. Current trading and outlook The second half of the year has started with high levels of pipeline activity inmost areas of the business and the key objective is to convert this activityinto confirmed sales. Although we have downgraded our internal expectations forthe current financial year, there are grounds for optimism based on the currentactivity in the Group's core businesses. The key points to note are: * Due North has a growing number of opportunities in both the public and private sectors and, with its newly won framework agreement, could see a shortening of public sector lead-times. * MS2M has a big opportunity with the autumn launch of its new services. * Willow Starcom is now majoring on e-mail archiving which should take it away from the highly price competitive traditional data storage field while still offering storage infrastructure plus consultancy and support. The strengthening of our product offering over the last 6 months must now beconverted into a strong sales delivery for the Group to fulfill its fullpotential and the sales teams in the operating companies are fully incentivisedto achieve the objectives we have set them. Jeremy HamerChairman26 July 2007 Access Intelligence PLC Consolidated Profit & Loss Statement For the Six Months Ended 31 May 2007 Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 31-May-07 31-May-06 30-Nov-06 £'000 £'000 £'000 Turnover 1,738 1,764 3,677------------------------- --------- --------- --------- Cost of sales (857) (865) (1,653)------------------------- --------- --------- ---------Gross profit 881 899 2,024 Administrative expenses (999) (709) (1,464)------------------------- --------- --------- ---------Operating (loss)/ profit (118) 190 560 Goodwill amortisation (209) (146) (312)------------------------- --------- --------- ---------(Loss)/profit on ordinary activitiesbefore interest (327) 44 248Interest receivable 11 10 17Interest payable (7) (8) (19)------------------------- --------- --------- ---------(Loss)/profit on ordinary activitiesbefore taxation (323) 46 246 Taxation 22 (65) (154)------------------------- -------- --------- ---------(Loss)/profit for the period (301) (19) 92------------------------- -------- --------- --------- (Loss)/profit per share (0.27p) (0.03p) 0.12pFully diluted (loss)/profit per share (0.27p) (0.03p) 0.12p(Loss)/profit per share excludinggoodwill (0.08p) 0.20p 0.55pamortisation------------------------- -------- --------- --------- Access Intelligence PLC Consolidated Balance Sheet For the Six Months Ended 31 May 2007 Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 31-May-07 31-May-06 30-Nov-06 £'000 £'000 £'000 Fixed assetsIntangible assets 8,025 5,697 8,251Tangible assets 188 191 157---------------------- ---------- --------- -------- 8,213 5,888 8,408Current AssetsStocks 313 269 314Debtors 1,239 1,125 1,216Cash at bank and in hand 699 534 1,002---------------------- ---------- --------- -------- 2,251 1,928 2,532 Creditors: amounts due within one year (1,930) (1,356) (2,101)------------------------ -------- --------- --------Net current assets 321 572 431---------------------- ---------- --------- --------Total assets less current liabilities 8,534 6,460 8,839 Creditors: falling due after more thanone year (704) (150) (708) ---------------------- ---------- --------- --------Net Assets 7,830 6,310 8,131---------------------- ---------- --------- -------- Capital and reservesCalled up share capital 549 576 549Share premium account 7,906 6,170 7906Capital redemption reserve 142 - 24Profit and loss account (767) (436) (348)---------------------- ---------- --------- --------Equity shareholders' funds 7,830 6,310 8,131---------------------- ---------- --------- -------- Access Intelligence PLC Consolidated Cash Flow Statement For the Six Months Ended 31 May 2007 Unaudited Unaudited Audited 6 months 6 months Year ended ended Ended 31-May-07 31-May-06 30-Nov-06 £'000 £'000 £'000 Net cash (outflow)/inflow from operatingactivities (11) 104 365 Returns on investments and servicing of financeInterest paid (7) (8) (19)Interest received 11 10 17--------------------------- --------- --------- ---------Net cash inflow/(outflow) from servicingof finance 4 2 (2)--------------------------- --------- --------- ---------Taxation (92) - (43)--------------------------- --------- --------- ---------Capital expenditure and financial investmentPayments to acquire intangible fixedassets - (89) (332)Payments to acquire tangible fixed assets (77) (86) (69)--------------------------- --------- --------- ---------Net cash outflow from capital expenditureand financial investment (77) (175) (401)AcquisitionsPurchase of subsidiary undertaking (5) - (1,708)Net cash acquired with subsidiary - - 818--------------------------- --------- --------- ---------Net cash outflow from acquisitions (5) - (890)--------------------------- --------- --------- ---------Net cash outflow before use of liquidresources and financing (181) (69) (971)FinancingIssue of equity share capital - - 1,500Cost of shares issued - - (101)Repayment of loans (118) - (24)Capital element of leases (4) - (5)--------------------------- --------- --------- ---------Net cash inflow from financing (122) - 1,370--------------------------- --------- --------- --------- (Decrease)/increase in cash (303) (69) 399--------------------------- --------- --------- --------- Notes to the Financial Information For the period 1 December 2006 to 31 May 2007 1. The unaudited results for the six months have been prepared on a basisconsistent with the accounting policies disclosed in the Group's 2006 accountsand do not constitute statutory accounts within the meaning of Section 240 ofthe Companies Act 2. The figures for the period ended 30 November 2006 have been extracted fromthe statutory accounts, which have been delivered to the Registrar of Companiesand received an unqualified audit report. 3. The calculation of earnings per share is based on the (loss)/profit aftertaxation divided by the weighted average number of ordinary shares in issue,being 109,800,999 (6 months to 31 May 2006:68,122,355 and period ended 30November 2006 :74,703,167). 4. The weighted average number of shares used in the calculation of dilutedearnings per share is 109,800,999 (31 May 2006 71,472,355 and period ended 30November 2006: 71,472,355). This has been adjusted for the effect of potentiallydilutive share options granted under the Company's Share Option and ManagementIncentive Schemes. 5. An adjusted earnings per share calculation, which excludes goodwillamortisation, is calculated on the basic earnings per share basis to allowshareholders a clearer understanding of the trading performance of the Company. 6. The tax charge is based on the estimated tax rate for the year to 30 November2007. 7. Reconciliation of Opening Shareholders' Funds. Unaudited Unaudited Audited 6 months 6 months Year ended ended ended 31-May-07 31-May-06 30-Nov-06 £'000 £'000 £'000 Opening shareholders' funds 8,131 5,461 5,461 Preference shares reclassified as debt - - (191) (Loss)/profit for the period (301) (19) 92 Shares issued - 868 2,769------------------ ---------- ----------- ---------Closing shareholders funds 7,830 6,310 8,131------------------ ---------- ----------- --------- 8. This statement is being sent to shareholders of the Company and will beavailable at the Company's Registered Office at Regency House, WestminsterPlace, York Business Park, York, YO24 6RW. This information is provided by RNS The company news service from the London Stock Exchange