Arcontech Group Regulatory News (ARC)

12 Oct 2005 07:00

Knowledge Technology Solutions PLC12 October 2005 12 October 2005 KNOWLEDGE TECHNOLOGY SOLUTIONS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2005 Knowledge Technology Solutions PLC ("KTS"), the independent provider ofreal-time market data services, announces its preliminary results for the yearended 30 June 2005. Financial and business highlights: • Turnover up 62% to £1.25 million (2004: £770,185) • Group loss before tax of £966,536 (2004: £940,161) • Cash position of £1.7 million • KTS MarketTerminal with O2 service launched in April, providing mobile access to essential international market data and news • Sales achieved by overseas market data services reseller, broadening international distribution network • In discussions with several large stockbrokers to provide MarketTerminal under their own brand Dr Marc Pinter-Krainer, Chief Executive of Knowledge Technology Solutions PLC,said: "We are pleased to have continued to grow sales and improve our service tocustomers. We recognise, however, that vigorous competition among desktop dataapplications providers has created a tough trading environment, which we areresponding to by pursuing a strategy to broaden and deepen KTS's share of themarket. Whilst this difficult environment has reduced our expectations for nextyear, moving towards profitability remains of paramount importance, and revenuesfrom additional growth opportunities will help accelerate progress in thisregard." Enquiries, please contact: Dr Marc Pinter-Krainer Knowledge Technology Solutions PLC 020 7256 2300Oliver Scott KBC Peel Hunt Ltd 020 7418 8900Neil Boom Gresham PR Ltd 020 7404 9000Rosemary Acfield Chief Executive's Review KTS has made further progress in the year to 30 June 2005. Revenues from ourinternational and UK-only financial news and data services have grown steadilyfrom our install base, now more than 130 separate organisations. These rangefrom investment banks and stockbrokers to legal practices and financial mediaorganisations. However, market conditions for desktop market data displayapplications have been challenging and the Board has been pursuing additionalnew growth activities and business partnerships to complement income fromdesktop subscriptions. During the year, sales increased month-on-month resulting in a year-end turnoverof £1.25m, an increase of 62% compared with the previous year (2004: £770,185).We have continued to work to contain costs, and are pleased that group lossesbefore tax of £966,536 were broadly in line with 2004's (2004: £940,161). Thesmall increase in loss for the year resulted from stepping up investment in ourtechnical and customer support headcount and meeting the cost of internationaldata and news feeds associated with our premium service MarketTerminal. Carefulcost management has allowed our cash position of £1.7m to remain strong,however. As in previous years, we have maintained accounting best practice by writing offresearch and development costs as incurred. We have continued to improve the functionality of both QuoteTerminal andMarketTerminal. New content added to our international service includesextensive foreign exchange data provided by ComStock Europe. With the standardMarketTerminal subscription, users can now access live prices and exchange ratesfor more than 170 currencies, including spot and forward rates as well ashistorical prices. Looking ahead, we are eager to focus on the intrinsic strengths of ourtechnology, which is very flexible and adaptable and requires little or no inputfrom clients when rolled out to individual desktops. Over the next 12 months we will be targeting new corporate clients with a strongly tailored MarketTerminal service that meets precisely their individual needs. For example, if clients require data and live prices from a particular exchange, or wish to have additional functionality, we can provide these at an agreed fee. We expect this approach to reduce our fixed data and exchange feed costs, while providing clients with a stronger, more bespoke, service. Another measure to boost revenues includes expanding our sales reach by usingmarket data services resellers. We have already had success with resellers afterachieving sales with third party distributors in Turkey. Following our positiveexperiences in Turkey we are seeking to broaden our international distributionnetwork to include other European countries. MarketTerminal inherently lendsitself very well to this approach as it is internet-delivered, browser-based andrequires no download or installation. Again, via partnerships, we are in discussions with several large private clientand institutional stockbrokers to provide MarketTerminal under their own brandname. This approach offers the opportunity to reach a far wider user base, whileoffering little risk or cost to KTS. The benefits from partnerships can be seen through collaboration with O2.Launched in April, the KTS MarketTerminal with O2 service provides mobile accessto essential international market data and news delivered via O2's "always on"GPRS, 3G and WLAN data connections. We are pleased to report a growing number ofsales enquiries for this service. Outlook We are pleased to have continued to grow sales and improve our service tocustomers. We recognise, however, that vigorous competition among desktop dataapplications providers has created a tough trading environment, which we areresponding to by pursuing a strategy to broaden and deepen KTS's share of themarket. Whilst this difficult environment has reduced our expectations for nextyear, moving towards profitability remains of paramount importance, and revenuesfrom additional growth opportunities will help accelerate progress in thisregard. Marc Pinter-KrainerChief Executive11 October 2005 *MarketTerminal is a registered trademark Consolidated Profit and Loss AccountFor the year ended 30 June 2005 Note Year ended Year ended 30 June 30 June 2005 2004 £ £Turnover 1 1,250,474 770,185Distribution costs (1,192,594) (686,722)Administrative costs (1,119,527) (1,062,895) -------- --------Operating loss (1,061,647) (979,432)Interest receivable 95,111 39,271 -------- --------Loss on ordinary activities before taxation (966,536) (940,161)Taxation 2 - 92,071 -------- --------Loss on ordinary activities after taxation (966,536) (848,090)Dividends 3 - - -------- --------Retained loss for the year (966,536) (848,090) -------- --------Loss per share 4 (0.65)p (0.71)p -------- --------Diluted loss per share 4 (0.65)p (0.71)p -------- -------- All of the results relate to continuing operations. There are no recognised gains or losses other than the loss for the year. Consolidated Balance SheetAs at 30 June 2005 2005 2004 £ £ Fixed assetsTangible assets 180,027 175,677Investments - - --------- -------- 180,027 175,677 --------- --------Current assetsDebtors 162,926 113,586Cash at bank and in hand 1,716,053 2,702,533 --------- -------- 1,878,979 2,816,119Creditors: amounts falling due within one year (256,099) (234,053) --------- --------Net current assets 1,622,880 2,528,066 --------- --------Net assets 1,802,907 2,757,743 --------- --------Capital and reservesCalled up share capital 148,275 148,015Share premium account 4,777,574 4,766,134Profit and loss account (3,122,942) (2,156,406) --------- --------Equity shareholders' funds 1,802,907 2,757,743 --------- -------- Approved on behalf of the board on 11 October 2005 by: Marc Pinter-Krainer Michael LevyChief Executive Officer Group Finance Director Consolidated Cash Flow StatementFor the year ended 30 June 2005 Year ended Year ended 30 June 30 June 2005 2004 £ £Net cash outflow from operating activities (1,027,646) (809,156) -------- --------Returns on investments and servicing of financeInterest received 95,111 39,271Net cash inflow from returns on investments andservicing of finance 95,111 39,271 -------- --------TaxationCorporation tax refund - 92,071Net cash inflow from taxation - 92,071 -------- --------Purchase of tangible fixed assets (65,645) (53,598)Net cash outflow from capital expenditureand financial investment (65,645) (53,598) -------- --------Net cash outflow before financing (998,180) (731,412) -------- --------FinancingIssue of share capital 11,700 3,123,019Expenses paid in connection with share issues - (128,319)Net cash inflow from financing 11,700 2,994,700 -------- --------(Decrease)/Increase in cash in the year (986,480) 2,263,288 -------- -------- All cash flows relate to continuing operations. Notes to the Preliminary Statement 1 Turnover Turnover is attributable to the principal activities of the Group being the saleof real-time data and analysis services, together with advertising andsponsorship revenue. All turnover arises within the UK. Income is recognised over the contract period. 2 Taxation on loss on ordinary activities As a result of the losses available, no liability to UK corporation tax arose onthe ordinary activities for the year ended 30 June 2005. 3 Dividends The Directors do not recommend the payment of a dividend. 4 Loss per ordinary share The loss per Ordinary Share has been calculated by dividing the loss on ordinaryactivities after tax attributable to shareholders by 148,256,472 (2004:119,973,753), being the weighted average number of Ordinary Shares in issueduring the year, which carry the right to receive a dividend. As a result of theloss for the year there is no difference between the basic and diluted loss pershare. 5 Post balance sheet events There were no events since the balance sheet date, which materially affect theposition of the Group. 6 Annual report and accounts The foregoing financial information does not amount to full accountswithin the meaning of Section 240 of the Companies Act 1985 and has not beenreported on but has been agreed with the Company's auditors. The Annual Reportand Accounts will be filed at Companies House following the Annual GeneralMeeting and will be posted to shareholders shortly. Copies will be availablefrom the Company Secretary at 8th Floor, Finsbury Tower, 103-105 Bunhill Row,London, EC1Y 8LZ. 7 Annual General Meeting The AGM will be held at KBC Peel Hunt Ltd, 111 Old Broad Street, LondonEC2N 1PH, on 28 November 2005 at 9.00 a.m. This information is provided by RNS The company news service from the London Stock Exchange