Altitude Group Regulatory News (ALT)

19 Sep 2006 07:03

Dowlis Corporate Solutions plc19 September 2006 Date: 19 September 2006On behalf of: Dowlis Corporate Solutions plc ("Dowlis" or "the Company")Embargoed until: 0700hrs Dowlis Corporate Solutions plcUnaudited Interim Results Dowlis Corporate Solutions plc, the marketing, information and logisticssolutions business, today announced its interim results for the six month ended30 June 2006. The key highlights are: • Profit before exceptional items and goodwill amortisation of £0.31m (2005: £0.39m) • Turnover of £9.38m (2005:£8.54m) • Exceptional charge of £0.6m • Profit/(loss) before tax (£0.37m) (2005:£0.16m) • Profit/(loss) per ordinary share (0.81p) (2005:1.43p) • Net cash of £0.37m (2005:£0.4m) • Disappointing performance from the corporate promotional products business • Acquisition of Ross and Envoy businesses • Strong growth in trade supply and information services businesses • Appointment of Barrett Bedrossian as Group FD and Craig Slater as Non-Executive Director Post Balance Sheet Events • Acquisition of Customer Focus (Software) Limited renamed Industry Software Limited Enquiries: Dowlis Corporate Solutions plc www.dowlis.comMartin Varley (Chief Executive) 0870 224 6677Barrett Bedrossian (Finance Director) 07775 848 252 Redleaf Communications Emma Kane/Sanna Lehtinen 020 7822 0200 Corporate Synergy PLCRhodri Cruwys 020 7448 4400 Zeus CapitalAlex Clarkson 0161 831 1512 • Publication quality photographs are available via Redleaf. CHAIRMANS STATEMENTFOR THE PERIOD ENDED 30 JUNE 2006 Trading Results The Group reports a profit before exceptional items and goodwill amortisation of£0.31m (2005:£0.39m) from sales of £9.38m (2005:£8.54m) in the six months to 30June 2006. These results include four months contribution from 'Ross' theGlasgow based distributor which was acquired in February 2006 and five monthsfrom Envoy the catalogue publishing business which was acquired in January 2006. After an exceptional charge of £0.60m (explained further below) and goodwillamortisation, the Group's operating loss before taxation was £0.37m (2005:profitof £0.16m), representing a loss per ordinary share of 0.81p (Dec 2005: profit of1.43p). The Group's result reflects a disappointing performance from the corporatepromotional products business which has now been restructured, implementingsubstantial cost savings over the past three months. This performance hashowever been partially offset by encouraging sales growth and profits from boththe acquisitions and the information service and distribution division. The balance sheet remains strong, with net cash of £0.37m (2005:£0.40m), thisbeing achieved despite a net cash outlay of £0.9m in acquiring both the Ross andEnvoy businesses. Exceptional Charge To take full advantage of the potential arising from the merger of CorporateSolutions and Dowlis and in order to improve profits in the traditionalpromotional products division we have restructured that business. As a result,we have reduced ongoing costs in this specific area and diverted some resourcesto the faster growing trade supply and information services divisions. This resulted in an exceptional charge recognised in the period of £0.6m whichcomprised £0.15m asset write-offs and £0.45m staff redundancy costs. Theresulting annual reduction in overheads achieved from this exercise is £0.53m. The changes made in the business do not reduce capacity, nor will they have anydetrimental impact on customers. Indeed, we expect the revised structure toimprove customer service through a clearer account management structure. Progress against strategy Our strategy is based largely upon the ability to acquire businesses that canoperate more profitably and grow more rapidly as part of our Group and theexpectation that our distribution and information offerings will provide strongand highly profitable growth. Early indications are that the Envoy and Ross acquisitions prove the first ofthese aims. Each of these businesses has exceeded our initial expectations atthe time of acquisition, with Envoy attracting additional customers due to theenhanced product offering through the use of 'group' resources such astechnology. Ross has recently won a number of new orders helped by the increasedbuying power of the group and greater comfort that customers take from dealingwith a larger company. Similarly, we are very pleased with progress in Trade Only where the productsales division has grown sales strongly in the period. The Information Servicesdivision has also performed strongly, with many new suppliers joining theproduct portal in the first six months of the year. We expect this business tocontribute significantly to the Group's expansion. A segmental analysis ofturnover and operating profit is shown within this report. Post Balance Sheet Event In continuing our strategy to deliver complete business solutions for ourindustry, on 3 July 2006 the Group announced the acquisition of 80% of CustomerFocus (Software) Limited, since renamed Industry Software Limited (ISL). Thesynergies between ISL, a provider of marketing business software designed forthe SME market, and the Group, mean that we are well placed to enhancesignificantly our technology offering. Board Changes On 9 June 2006, we announced the appointment of Barrett Bedrossian as GroupFinance Director and Craig Slater as a Non Executive Director. Barrett worked in a variety of financial and operational roles for 14 years atProduct Plus International, a subsidiary of 4imprint Group plc. Craig Slater hasworked for a number of quoted companies, including 4imprint Group plc as C.O.O. Outlook We are confident that the strategy set out at the time of our admission to AIMis both appropriate and deliverable. Our recent acquisitions have provedsuccessful to date and the Trade Only product and information offerings aremarket-leading and high growth. These are both key elements of our strategy. The performance of the traditional promotional merchandise business has howeverbeen disappointing. In the short term we will continue to take action to improveprofits in this area but the full benefit of these actions are unlikely to befelt until 2007. We remain confident that decisive short-term actions already executed and aclear focused strategy will ensure the business performs broadly in line withthe previous year and place it in a position to take advantage of the futurebenefits of the lower cost base now in place. Colin CookeChairman19 September 2006 DOWLIS CORPORATE SOLUTIONS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE PERIOD ENDED 30 JUNE 2006 Unaudited Unaudited Audited 6 months 6 months 17 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note £ 000's £ 000's £'000's Turnover 2 9,376 8,540 26,225 Cost of sales (6,277) (5,824) (17,709) ------- ------- ------- Gross profit 3,099 2,716 8,516 Administrative expenses (3,476) (2,494) (7,162)------------------------------- ------- ------- -------Operating profit before exceptional items and goodwillamortisation 313 392 1,582Goodwill amortisation (90) (170) (228)Operating exceptional items - Admin (600) - -------------------------------- ------- ------- -------Operating (loss)/profit on ordinary activities 2 (377) 222 1,354 Non-operating exceptionalitems - - (446) Other interest receivable andsimilar income 10 5 22 Interest payable and similarcharges (2) (63) (170) ------- ------- -------(Loss)/profit on ordinaryactivities before taxation (369) 164 760 Tax on (loss)/profit on ordinary activities 64 (102) (380) ------- ------- -------(Loss)/profit on ordinaryactivities after taxation (305) 62 380 ======= ======= ======= Earnings per share p p p Basic 3 (0.81) N/A 1.43Diluted 3 (0.81) N/A 1.43 The profit and loss account has been prepared on the basis that all operationsare continuing operations. There are no recognised gains and losses other thanthose passing through the profit and loss account. DOWLIS CORPORATE SOLUTIONS PLC CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2006 Unaudited Unaudited Audited 30 June 30 June 31 December 2006 2005 2005 £000's £000's £000'sFixed assetsIntangible assets 2,360 1,727 1,669Tangible assets 834 427 815Investments - 3 - -------- -------- -------- 3,194 2,157 2,484 -------- -------- --------Current assetsStocks 1,295 1,020 1,245Debtors 4,769 4,614 4,918Cash at bank and in hand 374 400 1,537 -------- -------- -------- 6,438 6,034 7,700Creditors: amountsfalling due within one year (4,188) (5,735) (4,596) -------- -------- --------Net current assets 2,250 299 3,104 -------- -------- --------Total assets lesscurrent liabilities 5,444 2,456 5,588 Creditors: amountsfalling due aftermore than one year (6) (1,165) (15) Provisions for liabilities (77) - (77) -------- -------- -------- 5,361 1,291 5,496 ======== ======== ========Capital and reservesCalled up share capital 3 151 100 150Share premium account 3 5,135 765 4,966Profit and loss account 3 75 426 380 -------- -------- --------Shareholders' funds 5,361 1,291 5,496 ======== ======== ======== DOWLIS CORPORATE SOLUTIONS PLC CONSOLIDATED CASH FLOW STATEMENTFOR THE PERIOD ENDED 30 JUNE 2006 Unaudited Unaudited Audited 6 months 6 months 17 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000's £000's £000's Net cash outflow fromoperating activities (251) (98) 930 Returns on investments and servicingof financeInterest received 10 10 22Interest paid (2) (100) (167)Interest element offinance lease rentals - (2) (3) Net cash inflow/(outflow)for returns oninvestments and servicingof finance 8 (92) (148) Taxation (168) (88) (96) Capital expenditurePurchase of tangiblefixed assets (103) (163) (660)Sales of tangible fixedassets 15 3 14 Net cash inflow/(outflow)for capital expenditure (88) (160) (646) Purchase of subsidiaryundertakings (860) (336) (128)Net cash/ (overdrafts)acquired with subsidiary 205 - (541)Payment for intangibleassets - - (120)Deferred considerationpaid - - (214) Acquisitions anddisposals (655) (336) (1,003) Net cash outflow beforemanagement of liquidresources and financing (1,154) (774) (963) Issue of ordinary sharecapital - - 4,500Cost of share issue - - (165)Repayment of bank loan - - (110)Repayment of loan notes - - (1,200)Repayment of loansacquired - - (490)Capital element of hirepurchase contracts (9) (26) (35)Net cash inflow/(outflow)from financing (9) (26) 2,500 -------- -------- --------(Decrease)/Increase incash in the period (1,163) (800) 1,537 ======== ======== ======== DOWLIS CORPORATE SOLUTIONS PLC Reconciliation of operating Unaudited Unaudited Auditedprofit to net cash (outflow)/inflow 6 months 6 months 17 monthsfrom operating activities ended ended ended 30 June 30 June 31 December 2006 2005 2005 £000's £000's £000's Operating (loss)/profit (377) 222 1,354Depreciation of tangible assets 84 79 152Amortisation of intangible assets 90 170 228(Profit)/Loss on disposal of tangible assets (15) 9 39Increase in stocks (27) (33) (188)Decrease/(increase) in debtors 557 (265) (480)(Decrease)/Increase in creditors within one year (563) (280) 153Exceptional items - - (328) ========= ========== ==========Net cash (outflow)/inflow from operating activities (251) (98) 930 DOWLIS CORPORATE SOLUTIONS PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD ENDED 30 JUNE 2006 1 Basis of preparation The results for the six months ended 30 June 2006 and the comparative figures for the six months ended 30 June 2005 are unaudited. They have been prepared on accounting bases and policies that are consistent with those used in the preparation of the financial statements of the Group for the period ended 31 December 2005. The financial information contained in this report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). The results of Dowlis Corporate Solutions Plc for the period ended 31 December 2005 were reported on by the auditors and received an unqualified report and contained no statement under Section 237(2) or (3) of the Companies Act 1985 (as amended). Statutory accounts for the period ended 31 December 2005 have been delivered to the Registrar of Companies. The audited accounts of the group for the seventeen months ended 31 December 2005 were the first prepared after its admission to AIM. The company prepared proforma results for the twelve months ended 31 December 2005 for information purposes only in its annual report for the same period copies of which are available from its registered office. 2 The analysis of turnover and (loss)/profit before taxation and goodwill amortisation by business segment is as follows: Corporate Distribution Total 6 months ended 30 June 2006: £000's £000's £000's Turnover 8,283 1,093 9,376 Operating (Loss)/Profit before exceptional items and goodwill amortisation 72 241 313 Exceptional items (600) - (600) Goodwill amortisation (90) - (90) Operating (Loss)/Profit (618) 241 (377) Corporate Distribution Total 6 months ended 30 June 2005: £000's £000's £000's Turnover 7,498 1,042 8,540 Operating (Loss)/Profit before exceptional items and goodwill amortisation 223 169 392 Exceptional items - - - Goodwill amortisation (170) - (170) Operating Profit 53 169 222 The total turnover of the group for the period has been derived from itsprincipal activity of manufacture and sale of business gifts which is mainlyundertaken in the United Kingdom. DOWLIS CORPORATE SOLUTIONS PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD ENDED 30 JUNE 2006 3 (Loss)/earnings per share: Unaudited Unaudited Audited 6 months 6 months 17 months ended ended ended 30 June 30 June 31 December 2006 2005 2005 £'000's £'000's £'000's Basic and diluted earnings (305) N/A 304 Adjustment for goodwill amortization 90 N/A 184 ----------------- -----------------Adjusted loss before amortization ofgoodwill (215) N/A 488 Adjustment for exceptional items 600 N/A 446 Tax on exceptional items (97) N/A (62) ----------------- -----------------Adjusted loss before goodwill amortizationand exceptional items 288 N/A 872 ========== ========== Earnings per share p p p Basic (0.81) N/A 1.43 Before goodwill amortization (0.57) N/A 2.29 Before goodwill amortization andexceptional items 0.76 N/A 3.74 Diluted (0.81) N/A 1.43 4 Reconciliation of movements in shareholders' funds Share Capital Share premium Profit and Shareholders' £000's £000's Loss Funds £000's £000's At 1st Jan 2006 150 4,966 380 5,496 Shares issued 1 169 - 170 (Loss)/Profit for Financial period - - (305) (305) At 30th June 2006 151 5,135 75 5,361 This information is provided by RNS The company news service from the London Stock Exchange