D4T4.L Regulatory News (D4T4)

7 Apr 2006 07:01

IS Solutions PLC07 April 2006 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Friday, 7 April 2006 Embargoed: 7.00am IS Solutions plcPreliminary Statement of results for the year ended 31 December 2005 Highlights • Pre-tax profits £241k (2004: £108k) • Profit stated pre-goodwill and provision for historic bad debt and on IFRS basis - post bad debt £127k • Cash increased at year end to £2.087m (2004: £1.910m) • Final dividend proposed of 0.27p per share (2004: 0.2p per share) • Ist quarter 2006 turnover & profits up by 20% • Acquisition of Candric Ltd. Completed March 2006 • Agreements signed with Google & Adobe Chairman Barrie Clark said:"As a result of our focus on broadening the product portfolio with software thatallows us to add value through implementation and training services the boardbelieves that we are now poised to return to significant top line growth." FULL STATEMENT ATTACHED Enquiries:John Lythall, Managing DirectorIS Solutions Plc Citigate Dewe Rogerson LtdTel: 01932 893333 Tel: 0121 455 8370www.issolutions.co.uk -2- Statement by the ChairmanTurnover for the full year at £5.085 million (2004: £5.514 million) was in linewith the Board's expectations and pre-tax, pre goodwill impairment profits of£241k were earned, prior to a provision in respect of a bad debt of £114k. TheBoard has decided to take a prudent approach to the overdue debt mentioned atthe half year and reserve for it fully. The debt stemmed from work done in 2002and whilst the customer continues to trade, IS Solutions retains the ownershipof the IPR of the software developed and will look to sell this to offset someof the provision, though it is not known at this stage what it may realise.Taking this into account, declared pre-tax, pre goodwill profits are £127k (2004: £108k). Earnings per share were 0.37 pence (2004 :Loss 1.17 pence) with net assets at31st December 2005 standing at £2.601 million (2004 (restated under IFRS):£2.573 million). Cash increased in the year to £2.087 million as at 31stDecember 2005 (2004: £1.910 million). At the half year the Board was pleased to announce an interim dividend paymentof 0.13 pence per share reflecting both the improving trading conditions and thestrong balance sheet and cash position of the Group. The second half tradingcontinued in the same vein and the cash has again improved; the Board thereforeis recommending a final dividend of 0.27 pence per share giving 0.4 pence pershare for the full year (2004: 0.3 pence). Subject to shareholders' approval atthe AGM, to be held on the 18th May 2006, this dividend will be paid on the 24thMay to shareholders on the register at close of business on the 28th April 2006. In March of this year we purchased Candric Ltd., a small IT Services businessbased in Windsor, with turnover of £697k and pre-tax loss of £11k in its lastfinancial year to August 2005. It is our intention to relocate the business intoour Head Office in Sunbury as quickly as possible and this, coupled with othercost savings, should allow it to contribute a reasonable level of profit oncethe consolidation is completed. Candric was bought for a total consideration of£200k (made up of £150k cash and the balance in Treasury shares). The purchaseof Candric will strengthen our recurring revenue stream and give us a broaderbase from which to grow our Support Services. IS Solutions has continued its path of broadening its portfolio of softwareproducts from which it earns both reseller and service revenues and duringrecent months has made two significant signings: In December of 2005 we were thefirst UK company to be signed up by Google to sell and implement their'Enterprise Search Solution', the market for which is large corporateorganisations requiring the ability to locate information in multiple fileformats across their entire network and, more recently in March of this year, wesigned a distribution agreement with Adobe for their 'Knowledge Worker' productswhich include Breeze, LiveCycle and Flex - IS Solutions was chosen for itsability to add value with implementation, training and support services. Boththese signings are already contributing significant sales this year. Although there has been a reduction in Financial Feeds project work, other areasof project work are showing signs of recovery and the recurring revenue streamsgenerated by web and IT Services continue to cover a substantial proportion ofoverheads. Personnel Once again the Board would like to express its appreciation and thanks to allemployees for their support through the whole of 2005, it is the teamwork &commitment to quality shown by the employees that has allowed us to build thestrong & sustainable relationships we have with our clients and suppliers. continued... -3- Outlook As a result of our focus on broadening the product portfolio with software thatallows us to add value through implementation and training services the boardbelieves that we are now poised to return to significant top line growth. Thisis evidenced by the recent agreements with Adobe and Google, elements ofrecovery in traditional project opportunities, and is substantiated by a 20%growth in turnover in the first quarter of 2006 compared with the same period of2005. This is accompanied by a similar level of bottom line growth.For the remainder of the year we will also have the benefit of our recentlyannounced acquisition of Candric Ltd and will continue to look for othersuitable candidates for acquisition. -4- 1. Audited consolidated income statement for the year ended 31st December 2005 2005 2004 £'000 £'000--------------------------------------------------------------------------------- Continuing operations Turnover 5,085 5,514 Cost of sales (2,652) (3,038)--------------------------------------------------------------------------------- Gross profit 2,433 2,476 Distribution costs (1,453) (1,709) Administration expenses (971) (1,167)--------------------------------------------------------------------------------- Profit/(loss) from operations 9 (400) Investment income 99 72-------------------------------------------------------------- -------- Profit/(loss) before tax 108 (328) Tax (20) 72--------------------------------------------------------------------------------- Profit/(loss) for the period 88 (256)--------------------------------------------------------------------------------- Attributable to:-------------------------- Equity holders of the parent 88 (290) Minority interests - 34--------------------------------------------------------------------------------- 88 (256)--------------------------------------------------------------------------------- Earnings per share Basic 0.37 (1.04) Diluted 0.35 (1.04)--------------------------------------------------------------------------------- -5- Consolidated statement of recognised income and expense for the year--------------------------------------------------------------------------------- There is no difference between the profit/loss for the period shown in the consolidated income statement and the total recognised income and expense for the period in both the current and preceding year. 2. Audited consolidated balance sheet as at 31st December 2005 2005 2004 £'000 £'000--------------------------------------------------------------------------------- Non-current assets Goodwill 100 100 Property, plant and equipment 223 299--------------------------------------------------------------------------------- 323 399--------------------------------------------------------------------------------- Current assets Trading investments 75 51 Trade and other receivables 999 1,404 Tax repayable - 33 Cash and cash equivalents 2,087 1,910--------------------------------------------------------------------------------- 3,161 3,398--------------------------------------------------------------------------------- Total Assets 3,484 3,797--------------------------------------------------------------------------------- Current liabilities Trade and other payables (863) (1,224) Tax liabilities (20) ---------------------------------------------------------------------------------- (883) (1,224) Non-current liabilities - ---------------------------------------------------------------------------------- Total liabilities (883) (1,224)--------------------------------------------------------------------------------- Net assets 2,601 2,573--------------------------------------------------------------------------------- Equity Share capital 496 496 Share premium account 1,783 1,783 Own shares (102) (102) Retained earnings 424 415--------------------------------------------------------------------------------- Attributable to equity holders of the parent 2,601 2,592 Minority interests - (19)--------------------------------------------------------------------------------- Total equity 2,601 2,573--------------------------------------------------------------------------------- -6- 3. Consolidated cash flow statement for the year ended 31st December 2005 2005 2004 £'000 £'000--------------------------------------------------------------------------------- Operating activities Profit/(loss) from operations 9 (400) Adjustments for: Depreciation of property, plant and equipment 108 137 Amortisation of intangible assets - 55 Impairment of goodwill 19 (100) Decrease in debtors 405 (1,404) (Decrease)/increase in creditors (361) 1,224--------------------------------------------------------------------------------- Cash generated by operations 180 (488) Income taxes repaid 33 39--------------------------------------------------------------------------------- Net cash from operating activities 213 (449)--------------------------------------------------------------------------------- Investing activities Interest received 75 61 Proceeds on disposal of trading investments - 19 Purchase of tangible fixed assets (61) (129) Sale of tangible fixed assets 29 12--------------------------------------------------------------------------------- Net cash from/(used in) investing activities 43 (37)--------------------------------------------------------------------------------- Financing activities Dividends paid (79) (25) Purchase of own shares - (102)--------------------------------------------------------------------------------- Net cash used in financing activities (79) (127)--------------------------------------------------------------------------------- Net /increase in cash and cash equivalents 177 (613) Cash and cash equivalents at start of year 1,910 ---------------------------------------------------------------------------------- Cash and cash equivalents at end of year 2,087 (613)--------------------------------------------------------------------------------- -7- 4. Dividends 2005 2004 Amounts recognised as distributions to equity £'000 £'000 holders ---------------------------- Final dividend for the year ended 31st 48 - December 2004 of 0.20p (2003: 0.00p) Interim dividend for the year ended 31st 31 25 December 2005 of 0.13p (2004: 0.10p) ---------------------------- 79 25 ---------------------------- Proposed final dividend for the year ended 65 31st December 2005 of 0.27p --------- The proposed final dividend is subject to shareholders' approval at the AGM and has not been included as a liability in these financial statements. 5. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2005 or 2004. Statutoryaccounts for 2004, which were prepared under UK GAAP, have been delivered to theRegistrar of Companies, and those for 2005 prepared under accounting standardsadopted by the EU, will be delivered following the company's annual generalmeeting. The auditors have reported on those accounts; their report wasunqualified and did not contain statements under Section 237(2) or (3) of theCompanies Act 1985. but is derived from those accounts having restated 2004 as aresult of adopting IFRS. 6. The Annual General Meeting will be convened for Thursday 18th May 2006. 7. Copies of the Report and Accounts will be posted to Shareholders on 26thApril 2006 Further copies will be available after that date from the company'sregistered office: Windmill House, 91-93 Windmill Road, Sunbury-on-Thames,Middlesex, TW16 7EF. This information is provided by RNS The company news service from the London Stock Exchange