19 Nov 2008 07:00
19 November 2008
Intellego Holdings plc
('Intellego' or 'the Company')
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2008
The Board of Intellego, the AIM traded eLearning and compliance courseware solutions business, is pleased to announce its unaudited interim results for the six months to 30 September 2008.
HIGHLIGHTS
50% increase in revenues to £1,110,494 (2007:£740,557)
60% increase in gross profit to £847,844 (2007: £530,498)
53% reduction in EBITDA loss to £50,602 (2007: £107,493)
Deferred income and Forward order book £416,000 (2007: £152,000)
Bolt on acquisitions and integration of Professional Development Partnership Limited and the assets of Zenosis Limited
Commenting on these results Chairman Angus Forrest, said,
"In the current trading period, sales activity is significantly ahead of last year with an increased forward order book and buoyant prospect list. This is a reflection on the investment made in all aspects of the Company's infrastructure and particularly with emphasis on the sales and marketing activities. However, as I mentioned in the annual report, there is a trend among our customers to take longer in their decision making.
We have instigated a programme to enable the Company to better weather a recession in the event that there is an impact on the training market. The Company's strengths in eLearning should provide us with significant opportunities to grow the business despite the current economic conditions as eLearning is demonstrably effective as a method of training at significantly lower cost than traditional instructor led training."
Intellego Holdings plc Tel: 0845 0583960
Angus Forrest / Ranjit Roy-Choudhuri
Beaumont Cornish Limited Tel: 020 7628 3396
Roland Cornish
Bishopsgate Communications Limited Tel: 020 7562 3350
Maxine Barnes / Nick Farmer
intellego@bishopsgatecommunications.com
Please see below for Chairman's statement and financials
Intellego Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements for the period ended 30 September 2008.
Chairman's Statement
I am pleased to report that during the period under review, Intellego's financial performance has improved with sales growing significantly by 50% to £1,110,494 (2007 £740,557) and gross profit rose 60% to £847,844 whilst EBITDA loss reduced to £50,602 (2007 loss: £107,493)
The Board has, over the past 24 months, been concentrating on increasing the scale of the business and improving its financial performance. I am pleased to report that progress is being made in achieving these objectives, and that the business has operated profitably in the second quarter of the financial year.
A measure of the achievements over the past 18 months is that the revenue in the half year to 30 September 2008 of £1,110,494 is more than was achieved in the full year to 31 March 2007 of £1,051,746
The emphasis on the next phase of development is to improve profitability and increase recurring revenues. Intellego will also look to complement organic growth through acquisition.
Acquisitions
This year we have acquired and integrated two businesses, The Professional Development Partnership Limited (PDPL) and Zenosis. They strengthen our offerings in the financial services and pharmaceutical sectors. We are expanding both businesses and are confident that the purchase price will be recovered within 12 months.
Both these businesses offer opportunities for significant repeat revenues and cross-selling the other products and services offered by Intellego. Additionally, and in contrast to our previous acquisitions we have been able to make significant reductions in the overheads of these businesses.
We have reviewed several other opportunities, but to date we have not been able to agree terms for their acquisition.
In addition to pure acquisition we have also been developing other relationships to both in-license and out-license products.
Current trading and prospects
In the current trading period, sales activity is significantly ahead of last year with a buoyant prospect list. This is a reflection on the investment made in all aspects of the Company's infrastructure and particularly with emphasis on the sales and marketing activities. However, as I mentioned in the annual report, there is a trend among our customers to take longer in their decision making.
We have instigated a programme to enable the Company to weather a recession in the event that there is an impact on the training market. The Company's strengths in eLearning should provide us with significant opportunities to grow the business despite the current economic conditions as eLearning is demonstrably effective as a method of training at significantly lower cost than traditional instructor led training.
Our emphasis is and will continue to be enhancing the value of the business for our shareholders. As well as growing organically we are reviewing several acquisition opportunities.
Condensed consolidated interim income statement
| Unaudited Six months to 30 September 2008 | Unaudited Six months to 30 September 2007 | Audited Year to 31 March 2008 | |||
| Note | £ | £ | £ | ||
| Continuing operations | |||||
| Revenue | 1,110,494 | 740,557 | 1,671,9676 | ||
| Cost of sales | (262,650) | (210,059) | (429,592) | ||
| -------------- | -------------- | ------------ | |||
| Gross profit | 847,844 | 530,498 | 1,242,375 | ||
| Operating charges before depreciation and Amortisation |
(898,446) |
(637,991) | (1,544,233) | ||
| -------------- | -------------- | ------------ | |||
| EBITDA | (50,602) | (107,493) | (301,858) | ||
| Depreciation and amortisation | (51,874) | (27,845) | (77,605) | ||
| -------------- | -------------- | ------------ | |||
| Operating loss | (102,476) | (135,338) | (379,463) | ||
| Investment income | 902 | 1,618 | 3,343 | ||
| Interest expense | (15,967) | (15,391) | (31,998) | ||
| -------------- | -------------- | ------------ | |||
| Loss on ordinary activities before taxation | (117,541) | (149,111) | (408,118) | ||
| Taxation | 6,755 | - | - | ||
| -------------- | -------------- | ------------ | |||
| Loss on ordinary activities after period | (110,786) | (149,111) | (408,118) | ||
| ======= | ======= | ======= | |||
| Basic and diluted loss per share | 4 | (0.09p) | (0.17p) | (0.42p) | |
| ======= | ======= | ======= | |||
Condensed consolidated interim balance sheet
| Unaudited 30 September 2008 | Unaudited 30 September 2007 | Audited 31 March 2008 | |
| £ | £ | £ | |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 72,543 | 83,185 | 81,746 |
| Goodwill | 278,295 | 72,006 | 179,070 |
| Other intangible assets | 323,293 | 63,087 | 142,672 |
| -------------- | -------------- | ------------ | |
| 674,131 | 218,278 | 403,488 | |
| -------------- | -------------- | ------------ | |
| Current assets | |||
| Inventories | 5,475 | 5,976 | 5,472 |
| Trade and other receivables | 976,743 | 413,771 | 576,577 |
| Cash and cash equivalents | 71,520 | 199,177 | 370,738 |
| -------------- | -------------- | ------------ | |
| 1,053,738 | 618,924 | 952,787 | |
| -------------- | -------------- | ------------ | |
| Total assets | 1,727,869 | 837,202 | 1,356,275 |
| ======= | ======= | ======= | |
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | 1,107,671 | 407,578 | 773,020 |
| Short-term borrowings | 302,714 | 119,900 | 150,057 |
| -------------- | -------------- | ------------ | |
| 1,410,385 | 527,478 | 923,077 | |
| Non-current liabilities | |||
| Long-term borrowings | 38,629 | 16,844 | 48,236 |
| -------------- | -------------- | ------------ | |
| Total non-current liabilities | 38,629 | 16,844 | 48,236 |
| -------------- | -------------- | ------------ | |
| Total liabilities | 1,449,014 | 544,322 | 971,313 |
| -------------- | -------------- | ------------ | |
| Net assets | 278,855 | 292,880 | 384,962 |
| ======= | ======= | ======= | |
| EQUITY | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 654,066 | 504,637 | 649,314 |
| Share premium account | 1,423,776 | 1,261,824 | 1,423,849 |
| Merger reserve | 29,387 | - | 29,387 |
| Shares to be issued | 15,000 | - | 15,000 |
| Profit and loss reserve | (1,843,374) | (1,473,581) | (1,732,588) |
| -------------- | -------------- | ------------ | |
| Total equity | 278,855 | 292,880 | 384,962 |
| ======= | ======= | ======= |
Condensed consolidated interim statement of changes in equity (unaudited)
| Share Capital | Share Premium | Merger Reserve | Shares to be Issued | Profit and Loss Reserve | Total Equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 April 2007 | 415,138 | 1,104,574 | - | - | (1,324,470) | 195,242 |
| Shares issued | 89,499 | 157,250 | - | - | - | 246,749 |
| Loss for the period | - | - | - | - | (149,111) | (149,111) |
| --------------- | --------------- | --------------- | --------------- | ----------------- | --------------- | |
| Balance at 30 September 2007 | 504,637 | 1,261,824 | - | - | (1,473,581) | 292,880 |
| ======= | ======= | ======= | ======= | ======= | ======= | |
| Balance at 1 October 2007 | 504,637 | 1,261,824 | - | - | (1,473,581) | 292,880 |
| Shares issued | 144,677 | 162,025 | 29,387 | - | - | 336,089 |
| Shares to be issued | - | - | - | 15,000 | - | 15,000 |
| Loss for the period | - | - | - | - | (259,007) | (259,007) |
| ======= | ======= | ======= | ======= | ======= | ======= | |
| Balance at 31 March 2008 | 649,314 | 1,423,849 | 29,387 | 15,000 | (1,732,588) | 384,962 |
| ======= | ======= | ======= | ======= | ======= | ======= | |
| Balance at 1 April 2008 | 649,314 | 1,423,849 | 29,387 | 15,000 | (1,732,588) | 384,962 |
| Shares issued | 4,752 | (73) | - | - | - | 4,679 |
| Loss for the period | - | - | - | - | (110,786) | (110,786) |
| --------------- | --------------- | --------------- | --------------- | ----------------- | --------------- | |
| Balance at 30 September 2008 | 654,066 | 1,423,776 | 29,387 | 15,000 | (1,843,374) | 278,855 |
| ======= | ======= | ======= | ======= | ======= | ======= |
Condensed consolidated interim cash flow statement
| Unaudited Six months to 30 September 2008 | Unaudited Six months to 30 September 2007 | Audited Year to 31 March 2008 | |
| Note | £ | £ | £ |
| Cash flows from operating activities | |||
| Loss after taxation | (110,786) | (149,111) | (408,118) |
| Adjustments for: | |||
| Depreciation | 20,712 | 18,910 | 47,975 |
| Amortisation | 31,162 | 8,935 | 29,630 |
| Investment income | (902) | (1,618) | (3,343) |
| Interest expense | 15,967 | 15,391 | 31,998 |
| (Increase) /decrease in trade and other receivables | (382,513) | 89,904 | (10,132) |
| (Increase) / decrease in inventories | (7) | 500 | 1,001 |
| Increase / (decrease) in trade payables | 315,366 | (101,357) | 144,852 |
| --------------- | ----------------- | --------------- | |
| Cash used in operations | (111,001) | (118,446) | (166,137) |
| Interest paid | (15,967) | (15,391) | (31,998) |
| --------------- | ----------------- | --------------- | |
| Net cash used in operating activities | (126,968) | (133,837) | (198,135) |
| --------------- | ----------------- | --------------- | |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment | (11,509) | (4,065) | (26,906) |
| Investment in intangible assets | (94,968) | - | - |
| Overdraft acquired with business | (8,155) | - | (19,991) |
| Acquisition of business | (191,990) | - | (18,750) |
| Interest received | 902 | 1,618 | 3,343 |
| --------------- | ----------------- | --------------- | |
| Net cash used in investing activities | (305,720) | (2,447) | (62,304) |
| --------------- | ----------------- | --------------- | |
| Cash flows from financing activities | |||
| Proceeds from issue of share capital | (9,580) | 246,749 | 532,837 |
| Principle payment of long-term bank loan | (9,607) | (3,616) | (12,135) |
| --------------- | ----------------- | --------------- | |
| Net cash used in financing activities | (19,187) | 243,133 | 520,702 |
| --------------- | ----------------- | --------------- | |
| Net increase / (decrease) in cash and cash equivalents | (451,875) | 106,849 | 260,263 |
| Cash and cash equivalents at beginning of period | 239,895 | (20,368) | (20,368) |
| --------------- | ----------------- | --------------- | |
| Cash and cash equivalents at end of period | (211,980) | 86,481 | 239,895 |
| ======= | ======= | ======= |
Notes to the condensed consolidated interim financial statements
1 General information
The financial information set out in this condensed interim report for the six months ended 30 September 2008 and the comparative figures for the six months ended 30 September 2007 and the year ended 31 March 2008 are unaudited. This financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31 March 2008, prepared under IFRS, received an unqualified audit report, did not contain statements under section 237(2) or (3) of the Companies Act 1985 and have been filed with the Registrar of Companies.2 Basis of preparationThese September 2008 condensed consolidated interim financial statements of Intellego Holdings plc are for the six months ended 30 September 2008 and prepared under IFRS. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group prepared under IFRS, for the year ended 31 March 2008.
The accounting policies applied are largely consistent with those of the annual financial statements for the year ended 31 March 2008, as described in those financial statements. The only exception relates to the taxation policy. For the purpose of the interims the tax charge on the underlying business performance is calculated by reference to the estimated effective rate for the full year.
3 Segment analysis
The Group's primary reporting format is business segment and its secondary format is geographical segment by origin of revenue.
Intellego operates three main business segments Distribution, Services and Publishing. The activities undertaken by the Distribution segment are the resale of software developed by third parties including maintenance and support contracts. The Services segment includes consultancy, customisation, development of bespoke content and integration of e-learning systems. The Publishing segment includes the publishing and sale of internally generated product. The revenues and net result generated by each of Intellego plc's business segments are summarised as follows:
6 months to 30 September 2008
| Distribution | Services | Publishing | Group | |
| £ |
£ |
£ |
£ | |
| Revenue | 431,777 | 581,547 | 97,169 | 1,110,494 |
| Loss | (30,234) | (71,705) | (8,846) | (110,785) |
| ======= | ======= | ======= | ======= | |
| 6 months to 30 September 2007 | ||||
| Distribution | Services | Publishing | Group | |
| Revenue | 343,356 | 304,644 | 92,557 | 740,557 |
| Loss for the period | (91,920) | (47,911) | (9,280) | (149,111) |
| ======= | ======= | ======= | ======= | |
| Year to 31 March 2008 | ||||
| Distribution | Services | Publishing | Group | |
| Revenue | 776,442 | 744,195 | 151,330 | 1,671,967 |
| Loss for the period | (203,644) | (179,065) | (25,409) | (408,118) |
| ======= | ======= | ======= | ======= |
4 Loss per share
The calculation of basic loss per share is based on a loss for the period of £110,786 (31 March 2008: £408,118, 30 September 2007: £149,111) and on 117,078,211 (31 March 2008: 96,896,360, 30 September 2007: 87,502,585) ordinary shares, being the weighted average number of ordinary shares in issue during the year.
The loss attributable to ordinary shareholders and the weighted average number of ordinary shares for the purpose of calculating the diluted loss per share are identical to those used for the basic loss per share. Similarly, the adjusted loss attributable to ordinary shareholders and the weighted average number of ordinary shares for the purposes of calculating the diluted loss per share are identical to those used for the loss per share. This is because the exercise of share options and warrants would have the effect of reducing the loss per share and is therefore not dilutive under the terms of IAS 33.