Dillistone Regulatory News (DSG)

28 Sep 2006 07:01

Dillistone Group PLC28 September 2006 Dillistone Group Plc INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2006 Chairman's Statement I am pleased to present the first interim report of the company following itsadmission to trading on AIM, a market operated by the London Stock Exchange, on15 June this year. This report covers the 6 months ended 30 June 2006. Financial Performance The financial results for the 6 Months ended 30 June 2006 show substantialgrowth in both turnover and profits over the corresponding period in 2005,despite the distractions caused by the considerable workload associated with theCompany's admission to AIM. Turnover in the period increased by 54% to £1,685,121 (6 Months ended 30 June2005 - £1,094,139), and profits before tax increased by 105% to £554,050 (2005 -£269,818) despite severe weakening of both the Australian and US Dollars againstthe pound. Sales and profits growth in both the UK and European markets havebeen particularly strong, although the UK result is flattered by the completionof a contract amounting to some £80,000 which commenced prior to the year end,but was completed in February. Operating margins were enhanced from 25% in the same period in 2005 to 33% inthe 6 months ended 30 June 2006, reflecting the strong sales growth togetherwith control over operating costs. Cashflow has continued to reflect the profitable performance of the business,and at the end of the period we held cash balances of £585,531, compared with£515,750 at the year end. The cash balance at 30 June reflects thenon-recurring pre-flotation dividend payment to the investors who supported themanagement buy out in January 2003. Earnings per share increased by 111% to 7.49p per share (2005 - 3.55p pershare). At the time of the flotation in June, we indicated that we anticipatedpaying an additional dividend of some £100,000 (approximately 1.85 pence pershare) following the publication of these results. The board has decided that,in the light of these excellent results, this dividend should be increased to2.5p per share, which will be paid on 10 October 2006 to holders on the registeron 6 October 2006. Shares will trade ex-dividend from 4 October 2006. Thetotal cost of this dividend will be £135,000. Flotation On 15 June 2006 the Company's shares were admitted to trading on AIM. 200,000new ordinary shares of 5p each were issued at a price of £1.25, raising £250,000for the Company. The costs of the issue amounted to £240,936, leaving theCompany net proceeds from the issue of £9,064. I would like to record my thanksto all our staff and professional advisers in this matter for their commitmentto ensuring that the issue and admission to AIM went as smoothly as it did. As part of the flotation process, share options were granted to all our staffthrough both EMI approved and unapproved share schemes. I am pleased that wewere able to introduce these schemes on favourable terms for them, and I lookforward to them becoming shareholders in due course. Offices In August 2006 we relocated both our London head office and our Asia-pacificoffices. The move of the London office, in particular, has enhanced the workingenvironment for our staff. Prospects Order intake in all our markets remains reasonably strong, and consistent withthe latter half of 2005 and the first half of 2006. In addition, supportrenewals on 1 July 2006 were higher than budgeted, and this should favourablyimpact on the result for the latter half of 2006 and the first half of 2007.The short lead time between taking an order and completing the installation,however, means that predicting the outcome for the year as a whole isparticularly difficult. We are working towards the release of version 8 of our "Filefinder" software.This will be the first major release for 2 years and experience suggests thatthe build up to the launch can have an adverse effect on the performance of thebusiness in the short term. Specifically, the introduction of the new versionof "Filefinder" will necessarily require our own staff to be trained for bothsupport and installation. The outlook for the retained executive search market remains positive throughoutthe world, and the Board believes that the outcome for the year as a whole willbe very satisfactory. Looking beyond 2006, the trend for the adoption of our "Filefinder" software bylarge corporate clients gives comfort that the group will continue to deliverfurther growth. Jim McLaughlin 28 September 2006. CONSOLIDATED INCOME STATEMENTS Year Ended 6 Months Ended 31 December 30/06/06 30/06/05 2005 £ £ £Revenue 1,685,121 1,094,139 2,530,313Cost of sales (159,909) (120,927) (271,171)Gross profit 1,525,212 973,212 2,259,142Administrative expenses (973,177) (704,555) (1,629,994) Profit from operations 552,035 268,657 629,148Investment income 2,015 1,161 2,699Profit before tax 554,050 269,818 631,847 Tax expense (163,445) (85,310) (199,776)Profit for the period/year 390,605 184,508 432,071 CONSOLIDATED BALANCE SHEETS As at As at 30 June 31 December 2006 2005 2005 £ £ £ASSETSNon-current assetsGoodwill 494,393 494,393 494,393Property, plant & equipment 42,436 25,301 25,345 536,829 519,694 519,738Current assetsInventories 6,290 22,300 32,414Trade and other receivables 720,520 503,943 708,187Cash and cash equivalents 585,531 321,817 515,750 1,312,341 848,060 1,256,351Total assets 1,849,170 1,367,754 1,776,089 EQUITY AND LIABILITIESEquityShare capital 270,000 105,000 105,000Share premium - 106,237 106,237Share option reserve 2,743 - -Retained earnings 245,809 214,840 304,903Translation reserve (23,264) 3,203 14,822Total equity 495,288 429,280 530,962 LiabilitiesCurrent liabilitiesTrade and other payables 1,029,283 761,474 1,015,142Current tax payable 161,154 91,690 229,985 1,190,437 853,164 1,245,127Non current liabilitiesNon-current tax payable 163,445 85,310 -Total liabilities 1,353,882 938,474 1,245,127 Total liabilities and equity 1,849,170 1,367,754 1,776,089 CONSOLIDATED CASH FLOW STATEMENTS Year ended 6 Months ended 30 June 31 December 2006 2005 2005 £ £ £Operating activitiesProfit for the year / period 390,605 184,508 432,071Adjustment forDepreciation 12,000 8,757 20,366Share option charge 2,743 - -Operating cash flows beforemovements in working capital 405,348 193,265 452,437(Increase)/decrease in receivables (12,333) 139,721 (63,254)Decrease/(increase) in inventories 26,124 6,884 (3,230)Increase in payables 108,754 67,897 374,550Net cash used in operatingactivities 527,893 407,767 760,503 Investing activitiesPurchases of property, plant andequipment (28,700) (8,840) (21,762) Net cash used in investing activities (28,700) (8,840) (21,762) Financing activitiesCapital contributions 9,064 - -Dividends paid (400,000) (210,000) (367,500)Net cash provided byfinancing activities (390,936) (210,000) (367,500)Net increasein cash and cash equivalents 108,257 188,927 371,241Cash and cash equivalents atbeginning of year /period 515,750 124,125 124,125 Effect of foreign exchange rate changes (38,476) 8,765 20,384Cash and cash equivalents atend of year /period 585,531 321,817 515,750 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Share Retained Foreign option capital premium reserve earnings exchange Total £ £ £ £ £ £Balance at 31 December 2004 105,000 106,237 240,332 (5,562) 446,007 Profit for the 6 months ended 30 June - - - 184,508 - 184,5082005Exchange differences on translation ofOverseas operations - - - - 8,765 8,765Dividends paid - - - (210,000) (210,000)Balance at 30 June 2005 105,000 106,237 - 214,840 3,203 429,280 Profit for the 6 months ended 31December2005 - - - 247,563 - 247,563Exchange differences on translation ofOverseas operations - - - - 11,619 11,619Dividends paid (157,500) (157,500)Balance at 31 December 2005 105,000 106,237 304,903 14,822 530,962 Profit for the 6 months ended 30 June 390,605 390,6052006Bonus issue from reserves 155,000 (106,237) - (48,763) -Issue of share capital 10,000 240,000 - - - 250,000Costs of the issue - (240,000) - (936) - (240,936)Fair value of share option expense - - 2,743 - - 2,743Exchange differences on translation ofOverseas operations - - - - (38,086) (38,086)Dividends paid - - - (400,000) - (400,000)Balance at 30 June 2006 270,000 - 2,743 245,809 (23,264) 495,288 NOTES TO THE INTERIM REPORT 1. Basis of Preparation The comparative figures for the year ended 31 December 2005 were derived fromthe statutory accounts for that year which have been delivered to the Registrarof Companies. Those accounts received an unqualified audit report which did notcontain statements under sections 237(2) or (3) (accounting record or returnsinadequate, accounts not agreeing with records and returns or failure to obtainnecessary information and explanations) of the Companies Act 1985. On 7 June 2006, Dillistone Group Limited changed its name to Dillistone GroupPlc. The interim financial statements have been prepared on the basis of theaccounting policies set out in the financial statements included in theAccountants' Report set out in the Admission Document for Dillistone Group Plcdated 14 June 2006. 2. Revenue and result Geographical segments The following table provides an analysis of the Group's sales by geographical market. Year ended 6 Months ended 30 June 31 December 2006 2005 2005 £ £ £UK 915,174 531,184 1,213,607Europe 338,722 225,017 520,377USA 285,537 199,125 460,499Australia and Asia Pacific 145,688 138,813 321,018Africa - - 14,812 1,685,121 1,094,139 2,530,313 Business SegmentThe following table provides an analysis of the Group's sales by business segment. Year ended 6 Months ended 30 June 31 December 2006 2005 2005 £ £ £Recurring 612,888 422,775 977,713Non recurring 1,072,233 671,364 1,552,600 1,685,121 1,094,139 2,530,313 Recurring income includes all support services, and web hosting income. Non-recurring incomeincludes sales of new licenses, and income derived from installing those licenses including training,installation, and data translation 2. Revenue and result (continued) ResultThe following table provides an analysis of the Group's result by geographical market. Year ended 6 Months ended 30 June 31 December 2006 2005 2005 £ £ £UK 299,883 98,507 227,137Europe 233,935 153,003 352,795USA 68,216 73,278 168,965Australia and Asia Pacific 66,847 57,240 131,982Africa - - 13,676 668,881 382,028 894,555Unallocated Expenses (116,846) (113,371) (265,407)Profit from Operations 552,035 268,657 629,148 3. Dividends Dividends of the equivalent of 7.692 pence per share amounting to £400,000 havebeen paid in respect of the year ending 31 December 2006 on 24 May 2006. Afurther dividend of 2.5 pence per share, totaling £135,000 is will be paid on 10October 2006 to holders on the register on 6 October 2006. 4. Earnings per share Year ended 6 Months ended 30 31 December June 2006 2005 2005 £ £ £ Profit attributable to ordinary shareholders 390,605 184,508 432,071 Weighted average number of shares 5,217,778 5,200,000 5,200,000 Basic earnings per share (pence) 7.49 3.55 8.31 For comparative purposes, earnings per share have been calculated on the basisthat the subdivision and bonus issue of share which took place on 6 June 2006had taken place on 1 January 2005. 5. Reconciliation from UK GAAP to IFRS These accounts are the Group's first consolidated interim financial statementsfor part of the period that the first annual consolidated financial statementswill be prepared in accordance with IFRS. An explanation of how the transitionfrom UK GAAP to IFRS has affected the Group's financial position and financialperformance is set out in the following tables. There have been no changes tothe Group's cash flows as a result of the transition. As at 30 As at 30 As at 31 June June DecemberBalance sheet reconciliation 2006 2005 2005 £ £ £ Total equity reported under UK GAAP 408,768 367,479 457,452Amortisation of goodwill eliminated 86,520 61,800 74,160Other adjustments - - (650) Total equity reported under IFRS 495,288 429,279 530,962 Period Year ended ended 30 31 June DecemberIncome statement reconciliation 2005 2005 £ £Profit for the period reported under UK GAAP 172,148 408,992Amortisation of goodwill eliminated 12,360 24,720Other adjustments - (1,641) Profit for the period reported under IFRS 184,508 432,071 This information is provided by RNS The company news service from the London Stock Exchange