27 Jun 2016 07:00
IS Solutions Plc
(the "Group" or "Company")
Final Results for the year ended 31 March 2016
and
Notice of Annual General Meeting
"Strong finish to the year achieving an uplift in revenue and profitability - dividend up 257%"
London: Monday 27 June 2016: IS Solutions Plc (Symbol: ISL) publishes the Group's Annual Report & Accounts for the year ended 31 March 2016 http://www.rns-pdf.londonstockexchange.com/rns/2750C_-2016-6-24.pdf
The Chairman's letter and financial statements for the year ended 31 March 2016 can be read in full in the attached Report; a summary is provided below:
Year ended 31 March 2016 audited | six-months ended 30 September 2015 unaudited* | 15-months ended 31 March 2015 audited | % period-on- period growth | |
Revenue -Continuing business (IS Solutions) -Celebrus Technologies (Celebrus) |
£15.30m £3.30m |
£7.04m £1.43m |
£12.29m £0.55m (six weeks) |
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£18.60m | £8.47m | £12.84m | 45% | |
Gross profit | £9.21m | £3.96m | £4.67m | 97% |
GP margin | 49.52% | 46.75% | 36.37% | +1315 bps |
Underlying pre-tax profit**
| £3.50m | £1.54m | £1.22m | 187% |
Adjusted fully diluted EPS | 8.24p | 3.36p | 3.86p | 113% |
Total dividend for the year (includes proposed final dividend of 1.5p) | 2.00p | 0.50p | 0.56p | 257% |
Strong cash generation - gross cash position | £5.00m | £2.09m | £0.09m | 5456% |
* The unaudited interim figures are as reported at the Half-year ended September 2015 released on 24 November 2015 ** Before amortisation of intangibles and share-based payment charges and 2015-acquisition costs of (£0.54m)
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Ø Our successful business model has driven both top and bottom line increases for the Company with growth coming from its core data analytics business which has shown a substantial improvement period-on-period of 126% | ||||
Ø Our focus on the application of data to the fundamentals of our clients' business needs has led to substantial growth in our project work and will fuel growth in our recurring revenue going forward | ||||
Ø The combination of the established and well respected brands of IS Solutions and Celebrus has opened up a number of cross-selling opportunities and, at the same time, it has created a much more balanced business with stronger higher margin license sales and progressively greater project and recurring revenue | ||||
Year ended 31 March 2016 audited | six-months ended 30 September 2015 unaudited* | 15-months ended 31 March 2015 audited | % period on period growth | |
£'000 | £'000 | £'000 | ||
Licence sales | 2,974 | 1,448 | 1,927 | 54% |
Projects | 10,666 | 4,768 | 6,146 | 74% |
Recurring income | 4,969 | 2,254 | 4,766 | 4% |
£18,609 | £8,470 | £12,839 | 45% | |
Peter Simmonds, Chairman, IS Solutions commented: "Our business is driven totally by data - the Group is operating in a market where business intelligence and analytics is one of the fastest and exciting growing software markets and with our extensive technical 'know-how' and skills base we are able to further build on our current market position within the data solutions arena both in the domestic and overseas markets."
"Over the last twelve months, we have seen strong demand for our offering across both brands which has manifested in the number of major projects being secured with new and existing customers operating within the retail and financial services sectors. In addition, these new projects, will generate recurring revenue, which is very reassuring in terms of cashflow and working capital. It is encouraging to report that in 2016 demand continues for our services; we are in dialogue on a number of other exciting projects and this underpins our confidence in our pipeline of prospects."
Peter Kear, CEO added: "This is a very exciting time for the business - over the last five years the IS Solutions historic model has developed its core strategy to progressively build a data analytics business. Our new market focus brings together existing fields of expertise and new skills to create a comprehensive and cohesive range of data solutions. In order to reflect this step-change the Board has already announced its intention, subject to shareholder approval in July 2016, to rename the Company and rebrand it D4t4 Solutions Plc.
"Our emphasis on data is an evolution of many years of experience in providing solutions for clients' data needs. In recent years, this has taken shape around our growing capabilities in enabling our customers to profit from their data in terms of organising it, monetising it and gaining benefit from it. The new areas of the business take us to the next level of data solutions and create further pull-through opportunities for the more established parts of the business."
"All of this bodes well for the future and the Board is confident that the Company can deliver another year of solid progress and will achieve current market expectations for the year ending 31 March 2017."
ENQUIRIES |
IS Solutions Plc Peter Kear, Chief Executive Officer or Carmel Warren, Chief Financial Officer Tel: +44 (0) 1932 893333 or email: moreinfo@issolutions.co.uk
finnCap (Nominated Adviser & Broker) Ed Frisby/Emily Watts - Corporate Finance or Stephen Norcross - Corporate Broking Tel: +44 (0) 20 7220 0500
TooleyStreet Communications (IR & Media Relations) Fiona Tooley: Tel: +44 (0) 7785 703523 or email: fiona@tooleystreet.com |
EDITOR'S NOTE |
IS Solutions Plc Accreditation: ISO27001; PCI (DSS): Follow us at: https://www.linkedin.com/company/is-solutions-plc. |
Established in 1985, IS Solutions is a data solutions company focusing on three revenue streams, namely license sales, projects and recurring revenue. The acquisition of Celebrus Technologies has further strengthened its position as a leading player in the field of Analytics which is now its fastest growing sector. Specifically, IS Solutions specialises in bringing together a range of components from various technology vendors to create unified systems for end-user clients. The business employs 120 staff, including 3 in the US and 28 in Chennai, India, who provide sales, product development and support skills. It also has a strong blue chip client base which includes Toyota and Toshiba as well as Saga, NHS, Compare The Market™, URENCO, Marks & Spencer and HSBC.
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IS Solutions Plc
Summary of Financial Statements
of results for the year ended 31 March 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2016 | |||
Year ended 31 March 2016 | 15-months ended 31 March 2015 | ||
£'000s | £'000s | ||
Continuing operations | |||
Revenue | 18,609 | 12,839 | |
Cost of sales | (9,395) | (8,170) | |
Gross profit | 9,214 | 4,669 | |
Distribution costs | (3,958) | (2,451) | |
Administration expenses | (1,985) | (1,557) | |
Other operating income | 22 | 25 | |
Profit from operations | 3,293 | 686 | |
Investment income | 1 | 4 | |
Finance costs | (76) | (38) | |
Profit before tax | 3,218 | 652 | |
Tax | (278) | (120) | |
Profit for the period | 2,940 | 532 | |
Other comprehensive income | |||
Gains on property revaluation | 48 | 57 | |
Total comprehensive income for the period attributable to equity holders of the parent | 2,988 | 589 | |
Earnings per share | |||
Basic | 8.17p | 1.99p | |
Diluted | 7.64p | 1.92p | |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT for the year ended 31 March 2016 |
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Share Capital £'000 | Share premium £'000 | Revaluation Reserve £'000 | Own Shares £'000 | Equity reserve £'000 | Retained earnings £'000 |
Total £'000 |
| |||
Balance at 1 January 2014 | 509 | 1,893 | 171 | (2) | 2,856 | 5,427 | ||||
Total comprehensive income | 57
| 532 | 589 | |||||||
Issue of share capital | 199
| 4,677
| 4,876 | |||||||
Dividends paid | (285) | (285) | ||||||||
Purchase of own shares | (154)
| (154) | ||||||||
Sale of own shares | 76
| (50) | 26 | |||||||
Share-based payments | 4 | 4 | ||||||||
Deferred tax on outstanding share options |
91
|
91 | ||||||||
Contingent shares | 1,289
| 1,289 | ||||||||
Balance at 1 April 2015 | 708
| 6,570
| 228 | (80)
| 1,380
| 3,057
| 11,863 | |||
Total comprehensive income | 48 | 2,940 | 2,988 | |||||||
Issue of share capital | 24 | 548 | 572 | |||||||
Dividends paid | (380) | (380) | ||||||||
Purchase of own shares | (291) | (291) | ||||||||
Sale of own shares | 348 | (297) | 51 | |||||||
Share-based payments | 38 | 38 | ||||||||
Deferred tax on outstanding share options |
|
|
|
|
206 |
155
|
361 361 | |||
Amortisation | 49 | 49 | ||||||||
Contingent shares | (646) | 40 | (606) | |||||||
Balance at 31 March 2016 | 732 | 7,118 | 276 | (23) | 940 | 5,602 | 14,645 | |||
CONSOLIDATED BALANCE SHEET as at 31 March 2016 | ||
2016 £'000 | 2015 £'000 | |
Non-current assets | ||
Goodwill | 8,696 | 8,696 |
Other intangible assets | 1,754 | 2,014 |
Property, plant and equipment | 2,615 | 2,414 |
Deferred tax assets | 792 | 698 |
13,857 | 13,822 | |
Current assets | ||
Trade and other receivables | 2,757 | 4,823 |
Cash and cash equivalents | 5,007 | 95 |
7,764 | 4,918 | |
Total assets | 21,621 | 18,740 |
Current liabilities | ||
Trade and other payables | (5,045)
| (4,427) |
Tax liabilities | -
| (59) |
Borrowings | (397)
| (454) |
(5,442) | (4,940) | |
Non-current liabilities | ||
Borrowings | (1,183) | (1,537) |
Deferred tax liabilities | (351) | (400) |
(1,534) | (1,937) | |
Total liabilities | (6,976) | (6,877) |
Net assets | 14,645 | 11,863 |
Equity | ||
Share capital | 732 | 708 |
Share premium account | 7,118 | 6,570 |
Revaluation reserve | 276 | 228 |
Own shares | (23) | (80) |
Equity reserve | 940 | 1,380 |
Retained earnings | 5,602 | 3,057 |
Attributable to equity holders of the parent
| 14,645 | 11,863 |
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 March 2016 | ||
Year ended 31 March 2016 £'000 | 15-months ended 31 March 2015 £'000 | |
Operating activities | ||
Profit for the year | 2,940 | 532 |
Adjustments for: | ||
Depreciation of property, plant and equipment | 178 | 228 |
Amortisation of intangible assets | 260 | 24 |
Finance Income | (1) | (4) |
Finance Expense | 76 | 38 |
Share-based payments | 38 | 4 |
Income tax expense | 278 | 120 |
Operating cash flows before movements in working capital | 3,769 | 942 |
Decrease in receivables | 2,032 | (924) |
Increase in payables | 618 | (87) |
Cash absorbed in operations | 6,419 | (69) |
Income taxes paid | (69) | (139) |
Net cash used in operating activities | 6,350 | (208) |
Investing activities | ||
Interest received | 1 | 4 |
Interest paid | (76) | (38) |
Purchase of property, plant and equipment | (332) | (171) |
Acquisition of subsidiaries net of cash acquired | - | (1,369) |
Net cash (used in)/from investing activities | (407) | (1,574) |
Financing activities | ||
Issue of new share capital | - | (37) |
Dividends paid | (380) | (285) |
Contingent shares issued | - | - |
New borrowings | - | 2,000 |
Repayment of borrowings | (411) | (212) |
Purchase of own shares (net) | (240) | (128) |
Net cash (used in)/from financing activities | (1,031) | 1,338 |
Net increase/(decrease) in cash and cash equivalents | 4,912 | (444) |
Cash and cash equivalents at start of year | 95 | 539 |
Cash and cash equivalents at end of year | 5,007 | 95 |
CERTAIN NOTES TO THE FINANCIAL STATEMENTS |
GENERAL INFORMATION |
IS Solutions Plc is a company incorporated in England and Wales and quoted on the AIM Market. The address of its registered office and principal place of business is disclosed on the inside cover of the financial statements.
The preliminary financial information does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006 but is derived from statutory accounts for the periods ended 31March 2016 and 31 March 2015, both of which are audited. Where interim financial information has been presented, this is derived from the unaudited results for the half-year ended September 2015 released on 24 November 2015. The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 31 March 2016. While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does not in itself contain sufficient information to comply with IFRSs.
The statutory accounts for the year ended 31 March 2016 will be delivered to the Registrar of Companies following the Company's Annual General Meeting and can be obtained from the investor section of the Company's website at www.issolutions.co.uk. Statutory accounts for the period ended 31 March 2015 have been filed with the Registrar of Companies. The auditor's report for the year ended 31 March 2016 was unqualified, did not include a reference to any matter to which the auditor drew attention by way of emphasis without qualifying their report and did not contain any statement under section 498(2) or (3) of the Companies Act 2006.
BASIS OF PREPARATION The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations as adopted by the European Union and comply with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. GOING CONCERNThe Group and Company's business activities, together with the factors likely to affect its future development, performance and position are set out above and the risks and uncertainties summarised below. The Group and Company have sufficient financial resources to cover budgeted future cashflows, together with contracts with a number of customers and suppliers across different geographic areas and industries. As a consequence, the Directors believe that the Group and Company are well placed to manage their business risks successfully despite the current uncertain economic outlook.Having reviewed the future plans and projections for the business, the Directors believe that the Company and its group undertakings have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. |
BUSINESS AND GEOGRAPHIC SEGMENTS |
Geographical segments: The Group operates entirely within the UK.
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IFRS 8, Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and assess their performance.
The information presented to the Chief Executive for the purpose of resource allocation and assessment of segment performance is focused on the type of product sold. The principal activity of the Group is split into three categories of product sold: License sales Project work Recurring revenues.
No allocation of other income and costs to these categories is made because the Directors consider that any such allocation would be arbitrary. Any allocation of assets and liabilities to these categories would also be arbitrary. The reporting below is consistent with that provided to the Chief Executive. |
Continuing operations 2016 | ||||
Licence sales
| Project work | Recurring revenues | Total
| |
£'000's | £'000's | £'000's | £'000's | |
External sales | 2,974 | 10,666 | 5,443 | 19,083 |
Adjustment for agency basis | - | - | (474) | (474) |
Reported revenue | 2,974 | 10,666 | 4,969 | 18,609 |
Segment result (gross profit) |
2,076 |
4,584 |
2,554 |
9,214 |
Other operating costs and income | (5,921) | |||
Investing and financing activities | (75) | |||
Profit before tax | 3,218 | |||
Major customers (over 10% of revenue) Customer 1 |
- |
8,660 |
1,500 | 10,160 |
Continuing operations 2015 | ||||
Licence sales
| Project work | Recurring revenues | Total
| |
£'000's | £'000's | £'000's | £'000's | |
External sales | 1,927 | 6,146 | 6,048 | 14,121 |
Adjustment for agency basis | - | - | (1,282) | (1,282) |
Reported revenue | 1,927 | 6,146 | 4,766 | 12,839 |
Segment result (gross profit) | 537 | 1,566 | 2,566 | 4,669 |
Other operating costs and income | (3,983) | |||
Investing and financing activities | (33) | |||
Profit before tax | 652 | |||
Major customers (over 10% of revenue) Customer 1 Customer 2 |
249 238 |
4,313 689 |
544 1,437 |
5,106 2,364
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The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2 of the Annual Report & Accounts for the year ended 31 March 2016.
EARNINGS PER SHARE | ||
2016 | 2015 | |
Earnings, being the net profit attributable to equity holders of the parent (£'000) | 2,940 | 532 |
Number | Number | |
Weighted average of ordinary shares in issue | 36,118,443 | 26,784,110 |
Weighted average of own shares | (125,237) | (111,542) |
Weighted average for the purpose of basic earnings per share | 35,993,206 | 26,672,568 |
Effect of dilutive share options | 2,512,249 | 1,065,704 |
Weighted average for the purpose of diluted earnings per share | 38,505,455 | 27,738,272 |
DIVIDENDS
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Year ended 31 March 2016 | 15-months ended 31 March 2015 | |
Amounts recognised as distributions to equity holders (£'000) Final dividend for the period ended 31 March 2015 of 0.56p (2013: 1.12p) Interim dividend for the year ended 31 March 2016 of 0.50p (31 March 2015: nil) |
198 182 |
285 - |
380 | 285 | |
Proposed final dividend for the year ended 31 March 2016 of 1.5p | 549 | 198 |
The Company is proposing a final dividend of 1.5p, which, subject to Shareholder approval at the Annual General Meeting which is being held on 20 July 2016, will be paid on 12 August 2016 to Shareholders on the Register at the close of business on 15 July 2016. The Ordinary shares become ex-dividend on 14 July 2016. The proposed final dividend has not been included as a liability in the financial statements for the year ended 31 March 2016. | ||
ANNUAL GENERAL MEETING |
The Annual General Meeting will be held on Wednesday, 20 July 2016 at 10am at the Group's Registered office: Windmill House, 91-93 Windmill Road, Sunbury on Thames, Middlesex, TW16 7EF. |
ELECTRONIC COMMUNICATIONS |
The Company is not proposing to bulk print and distribute hard copies of this announcement. The full Annual Report and Financial Statements for the year ended 31 March 2016 is attached via the link and will be published later today on the Company's website at www.issolutions.co.uk together with the Notice convening the Company's 2016 Annual General Meeting. Copies of these publications will be sent out to those shareholders who have elected to receive paper communications. Copies can also be requested via moreinfo@issolutions.co.uk or by writing to: The Company Secretary, IS Solutions Plc, Windmill House, 91-93 Windmill Road, Sunbury on Thames, Middlesex, TW16 7EF. The Company's news updates, regulatory news, and financial statements, can also be viewed and downloaded from the Group's website. |
FORWARD-LOOKING STATEMENTS |
The Annual Report & Accounts were approved by the Board of Directors on 24 June 2016. This document contains certain forward-looking statements which reflect the knowledge and information available to the Company during the preparation and up to the publication of this document. By their very nature, these statements depend upon circumstances and relate to events that may occur in the future thereby involving a degree of uncertainty. Therefore, nothing in this document should be construed as a profit forecast by the Company.
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