D4T4.L Regulatory News (D4T4)

21 Sep 2007 07:01

IS Solutions PLC21 September 2007 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Friday, 21 September 2007 Embargoed: 7.00am IS Solutions plcInterim Results for the six months ended 30 June 2007 • Turnover £4.26 million (2006: £3.38 million) up 26% • Pre-tax profit £181,000 (2006: £128,000) up 41% • Operating profit £133,000 (2006: £64,000) up 108% • Earnings per Share 0.71p (2006: 0.53p) up 34% • Cash balances at the half year risen to £2.2 million • Interim dividend 0.33p (2006: 0.17p) up 94% • Signed agreement to become partner of SAS, the market leader in business intelligence software and predictive analytics "The solid progress achieved in the first half has continued into the thirdquarter of the year with significant wins in the area of web analytics. We alsoexpect to conclude a number of further opportunities in the fourth quarter orearly 2008. "Overall, the Board believes that performance for the financial year will showfurther strong progress." Barrie Clark, Chairman FULL STATEMENT ATTACHED Enquiries:John Lythall, Managing Director Fiona Tooley / Keith GabrielIS Solutions Plc Citigate Dewe Rogerson LtdTel: 01932 893333 Tel: 0121 455 8370www.issolutions.co.uk -2- IS Solutions plc Interim Results for the six months ended 30 June 2007 STATEMENT BY THE CHAIRMAN, BARRIE CLARK The interim results for the six months ended 30 June 2007 are in line with theBoard's expectations and have continued the good start to the year that wasnoted at the time of our Preliminary announcement on 30 March 2007. Pre-tax profit increased by 41.4% to £181,000 (2006: £128,000) while basicearnings per share moved up by 34.0% to 0.71p (2006: 0.53p) and turnover by26.1% to £4.257 million (2006: £3.376 million). Cashflow from operations hasagain been strong and cash balances at the half year had risen to £2.171 million(31 December 2006: £1.563 million, 30 June 2006: £1.659 million). Early in the year we extended our Adobe agreement to include sales through thirdparties and, as a result, the first half turnover includes £0.594 million ofdistribution business at 7% gross margin. Revenue from this area is expected togrow as we expand our activities in this arena. Whilst the first half of the year has seen top line growth continue, through thestrategy of diversifying into value-added software products, our target ofimproving operating profit by driving through product license sales has alsobeen successful and is reflected in the increase of 107.8% to £133,000 (2006:£64,000). We have also seen significant growth in Adobe sales and a number ofwins in the web analytics area, based on our SpeedTrap partnership and web-basedaccessibility and compliance arena from our relationship with Watchfire. The Board believes that there are significant ongoing opportunities in the areaof web analytics; we have recently signed an agreement to become a partner ofSAS, the market leader in business intelligence software and predictiveanalytics, although it will be some time before we see sales resulting from thispartnership due to the long sales cycle associated with this business area. The Projects business continues to benefit from product led sales along with therecurring revenue stream from contracts. Dividend The Board has reviewed the future dividend policy of the Group in the light ofits historic cash balances, continuing track record of strong cash generationfrom operations and improving markets and prospects. The Board has determined toimprove the already progressive dividend policy, increasing the interim paymentby 94.1% to 0.33p (2006 half year: 0.17p) per ordinary share. The interimdividend will be paid on 1 November to shareholders on the Register at the closeof business on 5 October 2007. Outlook The solid progress achieved in the first half has continued into the thirdquarter of the year with significant wins in the area of web analytics. We alsoexpect to conclude a number of further opportunities in the fourth quarter orearly 2008. Overall, the Board believes that performance for the financial year will showfurther strong progress. -3- IS Solutions plc Consolidated income statement for the six months ended 30 June 2007 6 months ended Year ended 30 June 31 December 2007 2006 2006 £'000 £'000 £'000Continuing operations Revenue 4,257 3,376 6,909 Cost of sales (2,964) (2,176) (4,560) Gross profit 1,293 1,200 2,349 Distribution costs (653) (663) (1,280) Administration expenses (507) (473) (908) Profit from operations 133 64 161 Investment income 48 64 99 Other gains and losses - - 26 Profit before tax 181 128 286 Tax (8) - - Profit attributable to equity holders of the parent 173 128 286 Earnings per share Basic 0.71 p 0.53 p 1.18 p Diluted 0.70 p 0.51 p 1.16 p Consolidated statement of changes in shareholders' equity for the period 6 months ended Year ended 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Profit for the period 173 128 286 Total recognised income and expense for the period 173 128 286 Purchase of own shares - - (11) Sale of own shares 2 45 50 Dividends paid (80) (65) (107) Change in shareholders' equity for the period 95 108 218 Shareholders equity at start of period 2,819 2,601 2,601 Shareholders' equity at end of period 2,914 2,709 2,819 -4- IS Solutions plc Consolidated balance sheet as at 30 June 2007 At 30 June At 31 December 2007 2006 2006 £'000 £'000 £'000Non-current assets Goodwill 254 249 254 Other intangible assets 22 52 37 Property, plant and equipment 176 240 185 Deferred tax assets 11 11 22 463 552 498 Current assets Trade and other receivables 1,584 1,498 1,754 Cash and cash equivalents 2,171 1,659 1,563 3,755 3,157 3,317 Total Assets 4,218 3,709 3,815 Current liabilities Trade and other payables (1,300) (980) (989) Tax liabilities - (10) - (1,300) (990) (989) Non-current liabilities Deferred tax liabilities (4) (10) (7) Total liabilities (1,304) (1,000) (996) Net assets 2,914 2,709 2,819 Equity Share capital 496 496 496 Share premium account 1,786 1,786 1,786 Own shares (64) (63) (66) Retained earnings 696 490 603 Total equity 2,914 2,709 2,819 -5- IS Solutions plc Consolidated cash flow statement for the six months ended 30 June 2007 6 months ended Year ended 30 June 31 December 2007 2006 2006 £'000 £'000 £'000Operating activities Profit from operations 133 64 161 Adjustments for: Depreciation of property, plant and equipment 55 45 109 Gain on disposal of property, plant and equipment (2) - (1) Amortisation of intangible assets 15 8 23 Decrease/(increase) in debtors 170 (383) (631) Increase in creditors 311 46 41 Net cash from /(used in) operating activities 682 (220) (298) Investing activities Interest received 48 34 69 Proceeds on disposal of trading investments - 105 105 Disposal of operations - - 26 Purchase of tangible fixed assets (50) (62) (75) Sale of tangible fixed assets 6 - 5 Acquisition of subsidiary - (234) (238) Net cash from/(used in) investing activities 4 (157) (108) Financing activities Dividends paid (80) (65) (107) Sale of own shares 2 14 (11) Net cash used in financing activities (78) (51) (118) Net increase/(decrease) in cash and cash equivalents 608 (428) (524) Cash and cash equivalents at start of year 1,563 2,087 2,087 Net funds at end of period 2,171 1,659 1,563 -6- IS Solutions plc Notes to the interim financial statements 1. Basis of preparation The interim financial information for the six months ended 30 June 2007 and 30June 2006 does not constitute statutory accounts within the meaning of section240 of the Companies Act 1985 and has not been audited by the Group's auditors.The financial information for the year ended 31 December 2006 has beenextracted from the statutory accounts for that year which have been filed withthe Registrar of Companies and which contain an unqualified audit report and didnot contain a statement under s237(2) or (3) of the Companies Act 1985. The interim financial information has been prepared on the basis of theaccounting policies and presentation required by International FinancialReporting Standards, incorporating International Accounting Standards (IAS's)and Interpretations (collectively IFRS), and on a consistent basis with thelatest published annual accounts. 2. Business and geographical segments Business segments The group is involved solely in the supply of internet services. Geographical segments The group operates entirely within the UK. 3. Earnings per ordinary share 6 months ended Year ended 30/06/2007 30/06/2006 31/12/2006 Earnings attributable to equity holders of the parent £173,000 £128,000 £286,000 Weighted average of ordinary shares in issue 24,793,190 24,793,190 24,793,190 Weighted average of own shares (436,308) (565,618) (517,231) Weighted average for calculating basic EPS 24,356,882 24,227,572 24,275,959 Effective dilutive share options 419,870 689,310 418,750 Weighted average for calculating diluted EPS 24,776,752 24,916,882 24,694,709 4. Dividends During the period a dividend of £80,000 (0.33p per share) was paid in relationto the year ended 31 December 2006 (2006: £65,000 (0.27p per share) in relationto the year ended 31 December 2005). An interim dividend of 0.33p per share (2006: 0.17p) is proposed, and will bepaid on 1 November 2007 to shareholders on the register at the close of businesson 5 October 2007. -7- INDEPENDENT REVIEW REPORT TO IS SOLUTIONS PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprise the consolidated incomestatement, the consolidated balance sheet, the consolidated statement of changesin shareholders' equity, the consolidated cash flow statement and related notes1 to 4. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. Deloitte & Touche LLPChartered AccountantsReading, UK20 September 2007 This information is provided by RNS The company news service from the London Stock Exchange