ARGP.L Regulatory News (ARGP)

2 Nov 2005 07:00

Intellego Holdings PLC02 November 2005 For immediate Release2 November 2005 INTELLEGO HOLDINGS PLC ("Intellego" or "the Company") Unaudited Interim results for the half-year to 30 September 2005 The Board of Intellego, the AIM listed training and support services business,specialising in the provision of rapid e-Learning solutions, is pleased toannounce organic sales growth of 80% in its unaudited interim results for thehalf-year to 30 September 2005. HIGHLIGHTS • Sales up by over 80% to £313,859 (six months to 2 October 2004, £172,926). • Gross profit up to £227,541 (2004: £118,316) representing 92% growth. • Loss before tax £179,915 (2004: loss £69,547) in line with budget. • Significant new customer wins including: Norwich Union and two NHS Trusts. • Quality of margin at top end of Board's expectations, reflecting continuing shift to a services based business increasing the value added and value per sale. • Acquisition of Modinex Limited, to enable the Group to broaden its offering with a world class product delivered as a turnkey solution for the SAP training market. • Discussions in hand to expand commercial relationship and secure improved terms with key suppliers. • Outlook - the second half has started well with continuation of the growth in sales achieved in the first half Commenting on today's results, Mike Couzens, Chairman of Intellego Holdings plc,said: "The Company's strong performance in the six months to 30 September 2005demonstrates our capability to maintain sales growth on a larger base ofrevenue. We are enjoying this growth as a consequence of new partnerships,high-profile customer wins and repeat sales from existing customers. The operating loss incurred is in line with our budget and reflects theinvestments that we are making in expanding our sales-force and our technicalservices delivery capability." ---ENDS--- Enquiries : Intellego Holdings Plc Tel : 0870 428 1250Edward ArnettAndy Greenwww.intellego-holdings.com Beaumont Cornish Limited, Nominated Adviser Tel: 0207 628 3396Roland CornishNoelle Greenaway Bishopsgate Communications Limited Tel: 0207 430 1600Dominic BarrettoMaxine Barnes CHAIRMAN'S STATEMENT The Company's strong performance in the six months to 30 September 2005demonstrates our capability to maintain organic sales growth on a larger base ofrevenue. Turnover in the period, supported by a series of significant newcustomer wins, rose by over 80% to £313,859 (six months to 2 October 2004,£172,926). Gross profit increased by over 92% to £227,541 (2004: £118,316). The value andquality of our gross margin was exceptional at 72.5% (2004: 68%). This wasachieved with an increase in the proportion of technical services delivered withproducts, which in the period was 54% (2004: 30%). Notably, Intellego securedtwo important content development contracts; firstly with DHL in the UnitedKingdom and Switzerland, (who are existing users of the XStream "Rapid"e-learning authoring tools) and secondly, Davis Langdon and Seah International,a world leading firm of chartered quantity surveyors, construction costconsultants and project managers. The Company incurred pre-tax losses in the period of £179,915 (six months to 2October 2004, pre tax loss £69,547), in line with the Board's expectations andbudget at this stage in the development of the Company. Product update and new client winsThe Company has now secured over 100 customers, the majority of which are largecorporate or government organisations, in: transport and distribution;telecommunications; local government; higher education; financial services andthe travel & leisure sectors. New customers secured include; Norwich Union, CapGemini and two NHS Trusts. Our focus remains on providing quality solutions which enable organisations toaddress the development of customised workforce training materials for complexenterprise software applications, such as those provided by Oracle, SAP andSiebel. The Board believes that this market will present higher barriers toentry for competition versus more general purpose business skill subject areas. The Board is also seeing a significant rise in the level of interest in thedeployment of Learning Management Systems ("LMS"). In the period we have soldsix such systems, ranging from entry level solutions for the NSPCC and others,through to our contracts with OKI (a market leader in the global colour printermarket) and Berwin Leighton Paisner solicitors (named law firm of the year in2004 by the Lawyer Magazine) for highly specified enterprise solutions. TheBoard believes that the LMS is now recognised as the key enabling technologybehind e-learning adoption, as it provides not only the administrative andcontent management back-bone, but more importantly the framework for reportingon workforce competency and return on investment calculations. In the periodunder review, the Company secured 17% of its revenue from LMS licence sales,compared with 2% in the six months ended 2 October 2004. Entry into SAP Training MarketOn 29 June 2005, Intellego announced its entry into the SAP training market inthe UK having signed a partnership agreement with the German based TeamTraining Net GmbH (TTN). At the core of this partnership with the Berlin based SAP training solutionsprovider is an agreement that grants Intellego exclusive distribution rights inthe United Kingdom and Republic of Ireland to TTN's business systems trainingand process documentation authoring software for two years effective 1 July2005. Acquisition of Modinex Limited (now renamed Intellego TTS)On 1 July 2005 the Company announced that it had acquired Modinex Limited (nowrenamed Intellego TTS) in order to provide a more complete service-basedsolution for training in the SAP arena. The consideration for the acquisitioncomprises the issue of up to 4,900,000 Ordinary shares at 5.38p per share beingthe market value of the shares at the date of acquisition. The number of sharesto be issued will be determined according to the achievement of certainperformance targets. The Board simultaneously reported that HB Corporate hadplaced 2,100,000 Ordinary Shares of 0.5p at 5p raising £98,900 net of expenses,the funds raised providing additional working capital for the enlarged Intellegobusiness. Intellego wins St Mary's NHS Trust, Kingston Hospital NHS Trust and XeroxaccountsIn September and October, Intellego announced important new customer wins withSt Mary's NHS Trust and Kingston Hospital NHS Trusts respectively. Intellego hasprovided both NHS Trusts with an e-Learning solution based upon the XStreamprogramming-free technologies which will enable IT Training staff at bothhospitals to develop internally e-Learning programmes for a number of theiroperational software systems including the patient administration system. Additionally, during September, Intellego announced an important new customerwin with Xerox, where Intellego has provided an e-Learning solution to enableXerox to develop workforce training programmes for their SAP operationalsoftware systems both in the UK and in other selected European counties. The Board is proud to add Xerox, St Mary's NHS Trust and Kingston Hospital NHSTrust, to Intellego's existing blue-chip customer base. Strengthening the teamIn the period, the team was strengthened with the non-board appointments of twohighly experienced sales executives from the e-learning industry, both of whomhave, in the period, secured new customers for the Company Additionally, to prospect for new opportunities, the Company has established atelesales operation comprising both employed and outsourced telesales resource.This team is operating in conjunction with an outsourced telesales team, inorder to support the Company's ambitions for rapidly growing revenue lines. The Board has also recruited additional technical personnel to ensure that ourcustomers are well trained in the use of our technologies and supported to ahigh standard. The Board believes that high calibre technical services willincrease customer satisfaction and ultimately ensure repeat business. Post Balance Sheet EventsIn October the Board commenced discussions with NetDimensions Limited of HongKong (an existing supplier to the Company) with a view to securing improvedcommercial terms and expanding of the scope of its relationship to includedirect and indirect sales of the NetDimensions LMS. As already noted the Companyhas, in the period under review, seen significant growth in its sales of LMStechnologies and expects a continuation of this demand. Net Dimensions hasnumerous prestigious customers such as: HSBC; ABN Amro; ING and Cathay PacificAirways. The Board is pleased to report that these discussions have positivemomentum and a further announcement can be expected shortly. To enable the Company to fully exploit the potential of the proposed enhancedrelationship with NetDimensions the Board is considering a placing of OrdinaryShares to provide increased working capital for the enlarged business. OutlookHistorically, we have seen that our turnover is weighted 35/65 towards thesecond half of the financial year, (October to March). We anticipate that thispattern will at least be reflected in the current financial year as we seeincremental growth from Intellego TTS (our SAP training division), which has,since joining the Group in July this year generated a significant pipeline ofnew business opportunities. We are maintaining tight control on the operatingcost base of the business and this is not expected to increase significantly inthe second half of the financial year. Overall therefore, the Board expects thatthe improvement will be continued into the second half. In summary, the Company has strong sales pipeline in both its Intellego Systemsand Intellego TTS divisions with over 70 new qualified prospects, this bodeswell for the future. As stated at admission, it remains our intention to scalethe business through selective acquisitions at the appropriate juncture. Summarised unaudited consolidated profit & loss account for Intellego HoldingsPlc for the six months to 30th September 2005 Six months Six months Audited ended ended Year ended Notes 30-Sep-05 02-Oct-04 31-Mar-05 £ £ £Turnover 313,859 172,926 517,812 Cost of Sales (86,318) (54,610) (176,345) ---------- ----------- ---------- Gross margin 227,541 118,316 341,467 Sales and AdministrativeExpenses (397,758) (179,378) (506,996) ---------- ----------- ---------- Operating Loss (170,217) (61,062) (165,529) Interest receivable 277 90 834Interest payable (9,975) (8,575) (11,589) ---------- ----------- ---------- Loss on ordinary activitiesbefore taxation (179,915) (69,547) (176,284) Tax on loss on ordinary - - -activities ---------- ----------- ----------Loss on ordinary activitiesafter taxation (179,915) (69,547) (176,284) ========== =========== ========== Loss per share 1 ( 0.47)p (0.35)p (0.84p) All operations are continuing. There are no recognised gains and losses other than the losses disclosed above Summarised unaudited consolidated balance sheet for Intellego Holdings Plc as at30 September 2005 Audited 30-Sep-05 02-Oct-04 31-Mar-05 £ £ £Fixed assets 279,205 - -InvestmentsIntangible fixed assets 19,195 25,075 22,125Tangible fixed assets 81,022 23,157 64,946 ---------- ---------- -------- 379,422 48,232 87,071 Current AssetsStocks 5,500 2,998 3,996Debtors 530,874 196,740 425,700Cash at bank and in hand 5,471 4,692 200,477 ---------- ---------- -------- 541,845 204,430 630,173 Creditors: amounts falling due within one year (356,755) (250,561) (331,731) Net current assets / (liabilities) 185,090 (46,131) 298,442 ---------- ---------- -------- Total assets less current liabilities 564,512 2,101 385,513 Creditors: amounts falling due after morethan one year (31,274) (38,476) (34,879) ---------- ---------- --------Net assets / (liabilities) 533,238 (36,375) 350,634 ========== ========== ======== Capital and ReservesCalled up share capital 196,000 100,000 185,000Share premium 496,645 - 408,746Shares to be issued 263,620 - -Profit and loss account (423,027) (136,375) (243,112) ---------- ---------- --------Shareholders' funds 533,238 (36,375) 350,634 ========== ========== ======== Summarised unaudited consolidated cash flow statement for Intellego Holdings Plcas at 30 September 2005 Audited Six months Six months year ended ended ended Notes 30-Sep-05 02-Oct-04 31-Mar-05 £ £ £Net cash outflowfrom operating activities 2 (194,636) (2,003) (247,743) Returns on investments andservicing of financeInterest received 277 90 834Interest paid (9,975) (8,575) (11,589) -------- ------- -------- Net cash outflowfrom investmentsand servicing of finance (9,698) (8,485) (10,755) -------- ------- -------- Capital expenditure andfinancial investmentPurchase oftangible fixed assets (23,460) - (45,698)Purchase of investments (15,585) - - -------- ------- -------- (39,045) - (45,698) -------- ------- --------Net cash flowbefore financing (243,379) (10,488) (304,196) -------- ------- -------- FinancingIssue of shares 98,900 15,000 508,747Principalrepayments of loans (5,303) (5,093) (9,929) -------- ------- --------Net cash inflowfrom financing 93,597 9,907 498,818 -------- ------- --------(Decrease)/increase in cash in the period 3 (149,782) (581) 194,622 ======== ======= ======== Notes to the unaudited consolidated interim results 1. Loss per share The loss per share is calculated by reference to the capital structure thatexisted following the acquisition of Intellego Systems Limited by IntellegoHoldings Plc on 17 December 2004: Six months Six months Audited year ended ended ended 30-Sep-05 02-Oct-04 31-Mar-05 Loss per share ( 0.47)p (0.35)p (0.84)p There is no material difference between basic and fully diluted loss per share. The calculation of loss per share is based on the loss on ordinary activitiesfor the period ending 30 September 2005 and 38,118,032 shares, being theweighted average number of shares in issue during the period to 30 September2005. 2. Net cash flow from operating activities Six months ended Six months ended Audited year ended 30-Sep-05 02-Oct-04 31-Mar-05 £ £ £Operating loss (170,217) (61,062) (165,529)Amortisation ofintangible fixedassets 3,130 2,950 5,900Depreciation oftangible fixedassets 7,184 3,301 7,209Decrease/(increase) in stocks (1,504) 502 (496)Increase indebtors (105,174) (17,626) (246,586)Increase increditors 71,945 69,932 151,759 -------- -------- --------Net cash outflowfrom operatingactivities (194,636) (2,003) (247,743) ======== ======== ======== 3. Reconciliation of net cash flow to movement in (net debt) / funds Six months ended Six months ended Audited year ended 30-Sep-05 02-Oct-04 31-Mar-05 £ £ £(Decrease)/increasein cash in theperiod (149,782) (581) 194,622Cash outflow fromdecrease in debtand lease financing 5,303 5,093 9,929 -------- ------- --------Movement in netdebt in the period (144,479) 4,512 204,551Net debt / (Funds)at start of period 111,464 (93,087) (93,087) -------- ------- --------Net debt / (Funds)at end of period (33,015) (88,575) 111,464 ======== ======= ======== 4. Basis of Preparation The accounting policies and presentation of figures in this preliminaryannouncement have been prepared on the same basis as set out in the consolidatedfinancial statements for the year ended 31 March 2005. The financial information set out in the announcement does not constitute thecompany's statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The financial information for the year ended 31 March 2005 is derived from thestatutory accounts which have been delivered to the Registrar of Companies andon which the auditors gave an unqualified opinion. The comparative accounts for the six months to 2 October 2004 are derived fromthe unaudited results of Intellego Systems Limited as an individual company,prior to the acquisition of that company by Intellego Holdings Plc. 5. Date of approval This interim statement was approved by the directors of Intellego Holdings Plcon 1 November 2005. 6. Availability of Information A copy of this statement is available from the Company's place of business forthe next four weeks : 1 Orlando House, High Street, Teddington, Middlesex TW11 8LZ Ends NOTES TO EDITORS About Intellego Intellego is a training and support services business providing e-Learningsolutions addressing; enterprise applications training and high-risk workforcecompetency measurement. Intellego provides its solutions predominantly to organisations with large workforces and where there is a commitment to using e-Learning to modernise and reduce the cost of workforce training. Intellego's solutions are based upon a suite of award-winning programming-freesoftware technologies, which are available exclusively in the UK and Irelandfrom Intellego. Programming-free technologies have the potential to simplify,save time and thereby reduce costs in the courseware development process. Because they are straightforward to learn non-technical staff employed by theuser organisation can contribute to courseware development, therebystreamlining the process. Examples of training materials that can be producedusing Intellego's solutions are; e-Learning courses based upon softwaresimulations, plus skills assessments that establish real-world softwarecompetence and workforce knowledge. Solutions provided by Intellego may also be applied to meet the requirements oforganisations that wish to develop proprietary e-Learning courses andassessments in non IT areas such as; product information and demonstrations, regulatory compliance, internal policies and procedures etc. and helpdesksupport. Intellego was established in 2002 and admitted to trading on the AIM market ofthe London Stock Exchange on 17th December 2004. About Net Dimensions Established in 1999 and head quartered in Hong Kong Net Dimensions providesadvanced software solutions that deliver and manage corporate training,assessment and certification programs. Net Dimensions' main product is the Enterprise Knowledge Platform (EKP), apowerful, multilingual learning management system (LMS) that is used by leadingmultinationals, including HSBC, ING, ABN AMRO, Cathay Pacific Airways and South Africa Telkom. EKP manages the entire learning process - from enrolling students and trackingtheir progress to delivering tests and reporting costs. It is available as EKPBronze, EKP Silver, and as an enterprise solution, EKP Gold. Net Dimensions collaborates with global information technology services firmaand supports interoperability testing and industry standards complianceincluding Microsoft, Oracle, Sybase and Apple. Net Dimensions has a rapidly growing network of offices, partners and resellersin the United States, Latin America, Europe the Middle East and the AsiaPacific region. This information is provided by RNS The company news service from the London Stock Exchange