Last checked at 24 Sep 2010 07:00
24 September 2010
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 30 June 2010
Dillistone, the AIM quoted supplier of recruitment software, is pleased to announce its Interim Results for the six months ended 30 June 2010.
Highlights:
·; Revenue up 8% to £1.968m
o Non-recurring revenues up 22% to £0.755m
o Recurring revenues of £1.213m up 1% on H1 2009 (£1.204m) and 6% on H2 2009 (£1.140m)
·; Operating profits up 10% to £0.511m
·; Basic earnings per share up 3.9% to 6.67p
·; Increase in subscription based sales - offering increased confidence in visibility of future revenues
·; Net cash inflow over period - cash of £1.912m at 30 June 2010
·; The Group continues to be debt free
·; Dividend policy maintained, with Interim payment of 3.5p due in November
·; Strong project pipeline carried into H2 2010
Commenting on the results, Mike Love, Chairman of Dillistone, said:
"Against an unsettled economic backdrop, these results represent excellent progress. We are carrying a strong pipeline into H2 2010 and this, along with our high level of recurring revenues, gives us confidence in our ability to meet market expectations for the full year."
For further enquiries:
| Mike Love, Chairman, Dillistone Group Plc | 020 7749 6100 |
| Jason Starr, Managing Director, Dillistone Group Plc | 020 7749 6100 |
| Emily Staples, Religare Capital Markets (Nomad) | 020 7444 0800 |
| Daniel Briggs, Religare Capital Markets (Broker) | 020 7444 0500 |
| Tom Cooper, Winningtons Financial PR | 0797 122 1972 tom.cooper@winningtons.co.uk |
Notes to Editors:
Dillistone Group Plc is a leader in the supply and support of recruitment software to the search and selection market. Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc in June 2006.
Dillistone develops, publishes and supports Filefinder, its executive recruitment software, for recruitment companies and in-house recruitment teams. Filefinder is unique in providing tailored workflow and 24 hour support for global users, to mirror the profile and demands of an executive search assignment. Filefinder has been adopted by around 1000 companies in more than 55 countries.
Chairman's Statement
The Group has had an excellent start to 2010 with a number of significant indicators showing an improvement over the same period in the previous year.
Financial Performance
Revenue in the 6 months ended 30 June 2010 increased by 8% to £1.968m (2009: £1.822m) with operating profits showing an increase of 10% to £0.511m (2009: £0.466m). Administrative costs increased by 8% to £1.397m (2009: £1.296m), with the increase due mainly to higher depreciation costs (increase of £0.022m) and one-off costs of £0.048m.
Recurring revenues increased by 1% to £1.213m (2009: £1.204m) and by 6% over the £1.140m of recurring revenues earned in the second half of 2009. Recurring revenues in the 6 months to 30 June 2010 accounted for 62% of total revenues (2009: 66%). It should be noted that we are increasingly delivering our platform via a subscription pricing model.
Non recurring revenues saw a 22% growth to £0.755m (2009: £0.618m). This reflects a significant year-on-year improvement in new contract wins.
Regionally, our European division saw a 19% fall in revenues and Asia Pacific saw a 77% increase. The UK, Middle East and Africa ("UKMEA") business saw revenues increase by 17% and the US division showed a marginal increase of 2% in revenues for the same period. The profitability of the European business has been impacted by a management charge from the UKMEA business.
Cash flow in the 6 months ended 30 June 2010 showed a net cash inflow of £0.107m (2009: outflow £0.532m). The main elements of expenditure related to dividends in the period of £0.396m (2009: £0.396m) and investment in new product development of £0.279m (2009: £0.235m). At 30 June 2010 we had cash reserves of £1.912m (2009: £1.795m). The Group does not have any borrowings.
The tax provision increased to £0.134m in the period to 30 June 2010 (2009: £0.119m). This gives an effective global tax rate of 26.2% (2009: 25.3%). The 2009 and 2010 rates have been reduced by a claim in the UKMEA for research and development tax credit reflecting the continuing development of our products.
Basic earnings per share amounted to 6.67p (2009: 6.42p). As announced in our annual report for 2009, the Board has decided to maintain the Interim dividend for 2010 at the same level as was paid in respect of 2009, and accordingly a dividend of 3.5p per share (2009: 3.5p) will be paid on 5 November 2010 to holders on the register on 8 October 2010. Shares will trade ex-dividend from 6 October 2010.
Board Changes
Jim McLaughlin resigned as Executive Chairman and Finance Director in February 2010 and I stepped into the role of Non-Executive Chairman. Julie Pomeroy joined us as Finance Director in April 2010 and has also become Company Secretary. Giles Fearnley became a Non-Executive Director in May and is chair of the audit committee.
Outlook
The Group has made an excellent start to the year, a performance which does not appear to be reflected in a peer group comparison across the sector. A strong project pipeline was carried into the second half of 2010 yet we remain cautious.
While continued uncertainty about the state of the economy makes it difficult to predict long term performance, our post period performance, combined with this excellent start to the year underpins our confidence in our ability to achieve market expectations for 2010.
The Group enjoys a strong balance sheet and remains debt free. As such, the Board considers it well placed to compete in the global market place in which it operates.
The Board continues to follow a growth strategy and will, as part of this strategy, consider acquisitions or joint ventures that would enhance its product portfolio and deliver shareholder value.
Mike Love
23 September 2010
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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| Year ended |
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| 6 Months ended 30 June | 31 December | |
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| 2010 | 2009 | 2009 |
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| Unaudited | Unaudited | Audited |
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| £000 | £000 | £000 |
| Revenue | 1,968 | 1,822 | 3,655 |
| Cost of sales | (60) | (60) | (113) |
| Gross profit | 1,908 | 1,762 | 3,542 |
| Administrative expenses | (1,397) | (1,296) | (2,468) |
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| Result from operating activities | 511 | 466 | 1,074 |
| Financial income | 1 | 5 | 7 |
| Profit before tax | 512 | 471 | 1,081 |
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| Tax expense | (134) | (119) | (244) |
| Profit for the period/year | 378 | 352 | 837 |
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| Other comprehensive income: |
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| Currency translation differences | (14) | (25) | (17) |
| Total comprehensive income for period/year | 364
| 327 | 820
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| Earnings per share (pence) |
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| Basic | 6.67 | 6.42 | 15.02 |
| Diluted | 6.63 | 6.17 | 14.68 |
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| CONSOLIDATED STATEMENT OF FINANCIAL POSITION
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| As at |
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| As at 30 June | 31 December |
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| 2010 | 2009 | 2009 |
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| Unaudited | Unaudited | Audited |
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| ASSETS | £000 | £000 | £000 |
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| Non-current assets |
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| Intangible assets | 1,394 | 912 | 1,167 |
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| Property plant & equipment | 83 | 132 | 96 |
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| 1,477 | 1,044 | 1,263 |
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| Current assets |
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| Inventories | 28 | 31 | 56 |
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| Trade and other receivables | 1,242 | 1,311 | 1,260 |
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| Cash and cash equivalents | 1,912 | 1,795 | 1,819 |
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| 3,182 | 3,137 | 3,135 |
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| Total assets | 4,659 | 4,181 | 4,398 |
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| EQUITY AND LIABILITIES |
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| Equity |
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| Share capital | 283 | 283 | 283 |
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| Share premium | 30 | 29 | 30 |
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| Share option reserve | 12 | 9 | 10 |
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| Retained earnings | 1,889 | 1,621 | 1,907 |
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| Translation reserve | 92 | 99 | 106 |
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| Total equity | 2,306 | 2,041 | 2,336 |
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| Liabilities |
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| Non current liabilities |
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| Deferred tax | 141 | 3 | 93 |
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| Current liabilities |
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| Trade and other payables | 2,117 | 2,014 | 1,925 |
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| Current tax payable | 95 | 123 | 44 |
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| Total liabilities | 2,353 | 2,140 | 2,062 |
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| Total liabilities and equity | 4,659 | 4,181 | 4,398 |
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The interim report was approved by the board of directors and authorised for issue on 23 September 2010.
They were signed on its behalf by: |
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| J S Starr |
| J P Pomeroy |
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| CONSOLIDATED STATEMENT OF CASH FLOWS
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| Year ended |
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| 6 Months ended 30 June | 31 December | |
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| 2010 | 2009 | 2009 |
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| Unaudited | Unaudited | Audited |
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| £000 | £000 | £000 |
| Operating Activities |
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| Profit from operations | 511 | 466 | 1,074 |
| Less taxation paid | (35) | (173) | (286) |
| Adjustment for |
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| Depreciation | 93 | 71 | 160 |
| Share option expense | 2 | - | - |
| Operating cash flows before movements |
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| in working capital | 571 | 364 | 948 |
| Decrease / (Increase) in receivables | 18 | (5) | 46 |
| Decrease / (Increase) in inventories | 28 | 20 | (5) |
| (Decrease) / Increase in payables | 192 | (314) | (403) |
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| Net cash generated from operating activities | 809 | 65 | 586 |
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| Investing Activities |
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| Interest received | 1 | 6 | 7 |
| Purchases of property plant and equipment | (28) | (14) | (20) |
| Investment in product development | (279) | (235) | (537) |
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| Net cash used in investing activities | (306) | (243) | (550) |
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| Financing Activities |
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| Proceeds from issue of share capital | - | 42 | 42 |
| Dividends paid | (396) | (396) | (594) |
| Net cash used by financing activities | (396) | (354) | (552) |
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| Net change in cash and cash equivalents | 107 | (532) | (516) |
| Cash and cash equivalents at beginning of the period | 1,819 | 2,352 | 2,352 |
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| Effect of foreign exchange rate changes | (14) | (25) | (17) |
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| Cash and cash equivalents at end of period | 1,912 | 1,795 | 1,819 |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
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| Share |
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| Share | Share | option | Retained | Foreign | Total | |
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| capital | premium | reserve | earnings | exchange |
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| £000 | £000 | £000 | £000 | £000 | £000 | |
| Balance at 31 December 2008 | 270 | - | 40 | 1,634 | 124 | 2,068 | |
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| Profit for the 6 months ended 30 | - | - | - | 352 | - | 352 | |
| June 2009 |
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| Issue of share capital | 13 | 29 | - | - | - | 42 | |
| Share option release | - | - | (31) | 31 | - | - | |
| Exchange differences on translation |
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| of overseas operations | - | - | - | - | (25) | (25) | |
| Dividends paid | - | - | - | (396) | - | (396) | |
| Balance at 30 June 2009 | 283 | 29 | 9 | 1,621 | 99 | 2,041 | |
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| Profit for the 6 months ended 31 | - | - | - | 485 | - | 485 | |
| December 2009 |
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| Issue of share capital | - | 1 | - | - | - | 1 | |
| Share option release | - | - | 1 | (1) | - | - | |
| Exchange differences on translation |
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| of overseas operations | - | - | - | - | 7 | 7 | |
| Dividends paid | - | - | - | (198) | - | (198) | |
| Balance at 31 December 2009 | 283 | 30 | 10 | 1,907 | 106 | 2,336 | |
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| Profit for the 6 months ended 30 | - | - | - | 378 | - | 378 | |
| June 2010 |
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| Share option charge | - | - | 2 | - | - | 2 | |
| Exchange differences on translation |
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| of overseas operations | - | - | - | - | (14) | (14) | |
| Dividends paid | - | - | - | (396) | - | (396) | |
| Balance at 30 June 2010 | 283 | 30 | 12 | 1,889 | 92 | 2,306 | |
NOTES TO THE INTERIM
| NOTES TO THE UNAUDITED INTERIM REPORT |
CONSOLIDATED STATEMENT OF
1. Basis of Preparation
The financial information for the six months ended 30 June 2010 included in this interim report comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes. This statement has been prepared in accordance with IAS 34 "Interim Financial Reporting".
This interim financial information is unaudited but has been reviewed by the auditors. The financial information set out in this report does not constitute statutory accounts as defined by the Companies Act 2006. The comparative figures for the year ended 31 December 2009 were derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. Those accounts received an unqualified audit report which did not contain statements under sections 498(2) or (3) (accounting records or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations) of the Companies Act 2006.
The interim financial statements have been prepared on the basis of the accounting policies set out in the December 2009 financial statements of Dillistone Group Plc.
2. Share Based Payments
The Company operates two share option schemes. The fair value of the options granted under these schemes is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period at the end of which the option holder may exercise the option.
The fair value of the options granted is measured using the Black-Scholes model, adjusted to take into account sub-optimal exercise factor and other flaws in Black-Scholes, and taking into account the terms and conditions upon which the incentives were granted.
3. Segment reporting
| Geographical segments |
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| The following table provides an analysis of the Group's revenues by geographical market. | |||||
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| Year ended | ||
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| 6 Months ended 30 June | 31 December | |||
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| 2010 | 2009 | 2009 | ||
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| £000 | £000 | £000 | ||
| UKMEA | 843 | 721 | 1,528 | ||
| Europe | 428 | 528 | 963 | ||
| US | 434 | 424 | 810 | ||
| Asia Pacific | 263 | 149 | 354 | ||
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| 1,968 | 1,822 | 3,655 | ||
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| Business Segment |
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| The following table provides an analysis of the Group's revenues by business segment. | |||||
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| Year ended | ||
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| 6 Months ended 30 June | 31 December | |||
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| 2010 | 2009 | 2009 | ||
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| £000 | £000 | £000 | ||
| Recurring | 1,213 | 1,204 | 2,344 | ||
| Non recurring | 755 | 618 | 1,311 | ||
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| 1,968 | 1,822 | 3,655 | ||
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| Recurring income includes all support services, and web hosting income. Non recurring income includes sales of new licenses, and income derived from installing those licenses including training, installation, and data translation. | |||||
| Result |
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| Year ended |
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| 6 Months ended 30 June | 31 December | |
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| 2010 | 2009 | 2009 |
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| £000 | £000 | £000 |
| UKMEA | 581 | 23 | 178 |
| Europe | (169) | 409 | 761 |
| US | 150 | 177 | 358 |
| Asia Pacific | 142 | 44 | 150 |
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| 704 | 653 | 1,447 |
| Unallocated expenses | (193) | (187) | (373) |
| Result from operating activities | 511 | 466 | 1,074 |
3. Segment reporting (continued)
| Total assets | As at | As at | As at |
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| 30 June 2010 | 30 June 2009 | 31 December 2009 |
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| £000 | £000 | £000 |
| UKMEA | 3,293 | 2,596 | 2,981 |
| Europe | 492 | 716 | 678 |
| US | 508 | 554 | 626 |
| Asia Pacific | 366 | 315 | 113 |
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| 4,659 | 4,181 | 4,398 |
4. Tax
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| Year ended |
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| 6 Months ended 30 June | 31 December | |
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| 2010 | 2009 | 2009 |
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| £000 | £000 | £000 |
| Current tax charge | 86 | 119 | 150 |
| Deferred tax charge | 48 | - | 94 |
| Total | 134 | 119 | 244 |
5. Dividends
A second Interim dividend of 7p per share in respect of the year ended 31 December 2009 was paid on 1 April 2010. The total cost of this dividend was £396,581.
The Board has decided to pay an interim dividend of 3.5 pence per share (2009: 3.5p) on 5 November 2010 to holders on the register on 8 October 2010. Shares will trade ex-dividend from 6 October 2010.
6. Earnings per Share
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| Year ended |
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| 6 Months ended 30th June | 31 December | |
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| 2010 | 2009 | 2009 |
| Basic earnings per share |
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| Profit attributable to ordinary shareholders | £378,019 | £351,737 | £836,869 |
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| Weighted average number of shares | 5,665,441 | 5,480,739 | 5,572,440 |
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| Basic earnings per share (pence) | 6.67 | 6.42 | 15.02 |
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| Diluted earnings per share |
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| Profit attributable to ordinary shareholders | £378,019 | £351,737 | £836,869 |
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| Diluted weighted average number of shares | 5,701,325 | 5,701,325 | 5,701,325 |
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| Diluted earnings per share (pence) | 6.63 | 6.17 | 14.68 |
7. Related party transactions
The Company has a related party relationship with its subsidiaries, its directors, and other employees of the Company with management responsibility. There were no transactions with these parties during the period outside the usual course of business.
Dividends paid to directors in the period totalled £0.169m.
There were no transactions with any other related parties.