Dillistone Regulatory News (DSG)

14 Sep 2007 07:00

Dillistone Group PLC14 September 2007 14th September 2007 Dillistone Group Plc: Record Interim Results Global growth underpinned by recurring revenues Dillistone Group Plc ("Dillistone" or "the Company"), the AIM listed supplier ofrecruitment software, announces record interim results for the six months ended30th June 2007. Commenting on these results, Jason Starr, Managing Director at Dillistone said: "The results for the six months ended 30th June 2007 show excellent growth inboth sales and profitability. Recurring revenues represent a greater proportionof our headline sales figure, 33% up on the same period in 2006, which gives usgreater visibility and quality of earnings. Every sales region has shown goodsales and profit growth. Particular note must be given to the Australia andAsia Pacific region where profits grew by an outstanding 49%. We are veryencouraged by the conversion of our enquiries into orders and this is reflectedin these results." Six months ended 30th June - June '07 June '06 Turnover £1.92m £1.68m + 14%Profit before tax £0.658m £0.560m + 18%Profit after tax £0.454m £0.397m + 14%Earnings per share 8.42p 7.62p + 10% • Strong sales growth from all regions, exceptional performances being seen particularly in overseas operations• Dillistone now working with clients in 50 countries worldwide• Gross operating margins further improved to 33%• Cash flow helped by substantial increase in recurring revenues - cash balances of £1.2m at period end• Interim dividend of 2.5p per share• Strong order intake (up 18%) and support contract renewals (up 24%) on corresponding period in 2006. Recent contract wins post period end include Norman Broadbent On current trading and prospects, Mr Starr added; "The second half of the year has started well with significant new contractsbeing won. The global recruitment industry continues to grow and we expect tobenefit from this trend as well as to increase our market share. Dillistonecontinues to be strongly cash generative and is confident of producingsubstantial growth for the full year" Contacts: Jim McLaughlin, Chairman & Finance Director, 01934 710 509Dillistone Group Plc Jason Starr, Managing Director, Dillistone Group Plc 020 7749 6100 Mike Coe, Blue Oar Securities Plc 0117 933 0020 Tom Cooper, Winningtons Financial PR 0797 122 1972 Chairman's Statement I am very pleased to be able to report further significant progress in the 6Months ended 30th June 2007, and excellent prospects for the remainder of theyear and in the longer term. Financial Performance The financial results for the 6 Months ended 30th June show excellent growth inboth sales and profitability. Overall sales increased by some 14% over the sameperiod in 2006, underpinned by an increase of some 33% in recurring revenuespartly as a result of a new sales alternative for clients in the USA, andexcellent customer retention through support contracts. Non recurring revenues,which in 2006 were flattered to the extent of some £80,000 as a result of thecompletion of a large order, started in late 2005, increased by some 4% over theequivalent period in 2006. There is an encouraging trend towards recurringsystem sales, enhancing visibility of longer term revenues. Total turnover in the period increased by 14% to £1,927,943 (6 Months ended 30June 2006 £1,685,121), and profits before tax increased by 18% to £658,853 (2006Restated - £560,497). Geographically, sales in all the overseas operations grewwell, with Europe posting a 24% increase, and the USA and Australia and AsiaPacific regions both showed an 18% increase. Profits in the overseas operationsgrew by 32% in Europe, 27% in the USA, which continues to suffer from theeffects of the weakness in the dollar, and in Australia and Asia Pacific,profits grew by a very commendable 49%. The UK, which now has a higher level of costs following the relocation of theLondon headquarters in August of 2006, still managed to post a satisfying 15%increase in profits, notwithstanding its increased cost base. The overall groupoperating margin improved further to 33.8%, despite the effect of the increasein the cost base from the second half of 2006, and the large contract whichflattered last years figures. Cashflow has continued to reflect the profitable performance of the business,and at the end of the period we held cash balances of £1,190,608, compared with£538,591 at the year end. This is a cash inflow of over £663,000 in the period(excluding foreign exchange effects), reflecting the Group's tight controls overits working capital. The Group has no borrowings whatsoever. Earnings per share amounted to 8.42p in the period (2006 restated- 7.62p),andthe board has decided to pay an interim dividend of 2.5p per share on 19thOctober 2007 to holders on the register on 28th September 2007. The cost ofthis dividend will be £135,000 and will be met from the cash resources of theGroup. Shares will trade ex-dividend from 26th September 2007. A furtherdividend of some 5p per share is expected to be paid following the publicationof the final accounts and approval of shareholders at the Annual GeneralMeeting. Prospects Following the launch of a new version of our Filefinder software in March, wehave already announced some significant orders, many of which are due to beinstalled during the second half of 2007. In the 6 months to June, order intakewas some 18% ahead of the same period in 2006. Additionally, support renewalsin June were some 24% ahead of the same time last year. These factors providecomfort that the excellent performance in the first half will continue throughthe second half, and the cash reserves of the group provide it with a strongbase for further growth. Recent data published by the AESC for the first half of 2007 reports that theworldwide executive recruitment industry remains in a buoyant state, with anincrease in the revenues per consultant of 6.7%, and an increase in overallrevenues of some 20% compared to the same period in 2006. The report recognisesthe importance of emerging markets, and I am pleased that we were able toannounce in June that we had clients in 50 countries around the world. Filefinder is now used in more than 850 clients' sites in 50 countries aroundthe world, and by some of the largest and most successful search firms as theirmain business system. The trend for its use in corporate clients is growing,particularly in the USA. These factors support the board's belief that theprospects for the group remain excellent, and that the new version of Filefinderwill continue to be well received by the executive recruitment industry. Jim McLaughlin 13th September 2007. CONSOLIDATED INCOME STATEMENT 6 Months ended 30 June Year ended 31 December 2007 2006 2006 (as restated) £ £ £ Revenue 1,927,943 1,685,121 3,301,362Cost of sales (145,082) (122,965) (274,481)Gross profit 1,782,861 1,562,156 3,026,881Administrative expenses (1,130,268) (1,003,674) (2,107,724) Profit from operations 652,593 558,482 919,157Investment income 6,260 2,015 3,961Profit before tax 658,853 560,497 923,118 Tax expense (204,244) (163,445) (285,913)Profit for the period/year 454,609 397,052 637,205 Earnings per share (pence)Basic 8.42 7.62 12.00Diluted 7.96 6.94 11.13 CONSOLIDATED BALANCE SHEET As at 30 June As at 31 December 2007 2006 2006 (as restated) £ £ £ASSETSNon-current assetsIntangible assets 632,180 623,175 630,271Property plant & equipment 171,708 42,436 181,476 803,888 665,611 811,747Current AssetsInventories 48,322 6,290 21,210Trade and other receivables 1,118,048 720,520 827,633Cash and cash equivalents 1,190,608 585,531 538,591 2,356,978 1,312,341 1,387,434Total Assets 3,160,866 1,977,952 2,199,181 EQUITY AND LIABILITIESEquityShare capital 270,000 270,000 270,000Share option reserve 18,071 2,743 13,316Retained earnings 934,257 374,591 479,648Translation reserve (17,478) (23,264) (6,180)Total Equity 1,204,850 624,070 756,784 LiabilitiesCurrent liabilitiesTrade and other payables 1,473,904 1,029,283 1,205,219Current tax payable 277,868 161,154 228,575 1,751,772 1,190,437 1,433,794Non current liabilitiesDeferred tax liability 7,328 - 8,603Non-current tax payable 196,916 163,445 -Total liabilities 1,956,016 1,353,882 1,442,397 Total liabilities and equity 3,160,866 1,977,952 2,199,181 CONSOLIDATED CASH FLOW STATEMENTS As at 30 June As at 31 December 2007 2006 2006 (as restated) £ £ £ Operating activitiesProfit for the year / period 454,609 397,052 637,205Adjustment forDepreciation 61,079 42,497 94,374Share option expense 4,755 2,743 13,316Loss on disposal - - 1,117Operating cash flows beforemovements in working capital 520,443 442,292 746,012(Increase) in receivables (290,415) (12,333) (122,501)(Increase)/decrease in inventories (27,112) 26,124 11,204Increase in payables 513,619 108,754 199,081Net cash from operatingactivities 716,535 564,837 833,796 Investing activitiesPurchase of property, plant andequipment (18,549) (28,700) (190,033)Investment in development costs (34,671) (36,944) (73,888) Net cash used in investing activities (53,220) (65,644) (263,921) Financing activitiesProceeds from issue of share capital - - 250,000Costs of the issue - 9,064 (240,936)Dividends paid - (400,000) (535,096)Net cash provided byfinancing activities - (390,936) (526,032)Net increasein cash and cash equivalents 663,315 108,257 43,843Cash and cash equivalents atbeginning of year / period 538,591 515,750 515,750 Effect of foreign exchange rate changes (11,298) (38,476) (21,002)Cash and cash equivalents atend of year / period 1,190,608 585,531 538,591 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Share Retained Foreign option capital premium reserve earnings exchange Total £ £ £ £ £ £ Balance at 31 December 2005 105,000 106,237 - 427,238 14,822 653,297 Profit for the 6 monthsended 30 June 2006 - - - 397,052 - 397,052Bonus 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)Share option expense - - 2,743 - - 2,743Exchange differences ontranslation ofOverseas operations - - - - (38,086) (38,086)Dividends paid - - - (400,000) - (400,000)Balance at 30 June 2006(as restated) 270,000 - 2,743 374,591 (23,264) 624,070 Profit for the 6 monthsended 31 December 2006 - - - 240,153 - 240,153Share option expense - - 10,573 - - 10,573Exchange differences ontranslation ofOverseas operations - - - - 17,084 17,084Dividends paid (135,096) (135,096)Balance at 31 December 2006 270,000 - 13,316 479,648 (6,180) 756,784 Profit for the 6 monthsended 30 June 2007 - - - 454,609 - 454,609Share option expense - - 4,755 - - 4,755Exchange differences ontranslation ofOverseas operations - - - - (11,298) (11,298)Balance at 30 June 2007 270,000 - 18,071 934,257 (17,478) 1,204,850 NOTES TO THE INTERIM REPORT 1. Basis of preparation The financial information for the six months ended 30 June 2007 included in thisinterim report comprises the consolidated income statement, the consolidatedbalance sheet, the consolidated cash flow statement, the consolidated statementof changes in equity and the related notes on pages 11 - 12. This interim financial information is unaudited but has been reviewed by theauditors and their review opinion is included in this interim report. Thefinancial information set out in this report does not constitute statutoryaccounts as defined by the Companies Act 1985. Financial information for theyear ended 31 December 2006 included herein is derived from the statutoryaccounts for that year, which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain astatement under section 237(2) or section 237(3) of the Companies Act 1985. Change to previously reported 30 June 2006 results As outlined in the 2006 Financial Statements Dillistone Group Plc reviewed itsaccounting policies in the context of International Financial ReportingStandards, and in accordance with IAS 38 it capitalised any developmentexpenditure meeting the recognition criteria under the standard. The 30 June2006 comparatives in this interim report have now been restated to reflect thechange in treatment. The impact of the change is to increase intangible assetsas at 30 June 2006 by £128,782. 2. Share based payments The company operates two share option schemes. The fair value of the optionsgranted under these schemes is recognised as an employee expense with acorresponding increase in equity. The fair value is measured at grant date andspread over the period at the end of which the option holder may exercise theoption. 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 inBlack-Scholes, and taking into account the terms and conditions upon which theincentives were granted. 3. Revenue and result Geographical segmentsThe following table provides an analysis of the Group's sales by geographical market. 6 Months ended 30 June Year ended 31 December 2007 2006 2006 £ £ £UK 999,395 915,174 1,747,803Europe 420,036 338,722 640,483USA 336,158 285,537 598,807Asia-Pacific 172,354 145,688 314,269 1,927,943 1,685,121 3,301,362 Business SegmentThe following table provides an analysis of the Group's sales by business segment. 6 Months ended 30 June Year ended 31 December 2007 2006 2006 £ £ £Recurring income 816,914 612,888 1,287,531Non-recurring income 1,111,029 1,072,233 2,013,831 1,927,943 1,685,121 3,301,362 Recurring income includes all support services, and web hosting income. Non-recurring incomeincludes sales of new licenses, and income derived from installing those licenses includingtraining, installation, and data translation. Result 6 Months ended 30th June Year ended 31 December 2007 2006 2006 (as restated) £ £ £ UK 343,366 299,433 352,401Europe 308,427 233,935 496,766USA 86,322 68,216 204,279Asia-Pacific 99,443 66,847 175,800 837,558 668,431 1,229,246Unallocated expenses (184,965) (109,949) (310,089)Profit from operations 652,593 558,482 919,157 4. Dividends An interim dividend of 2.5 pence per share, totaling £135,000 has been approvedby the board, and will be paid on 19th October 2007 to holders on the registeron 28th September 2007. 5. Earnings per share 6 Months ended 30th June Year ended 31 December 2007 2006 2006 (as restated) £ £ £Basic earnings per share:Profit attributable to ordinary shareholders 454,609 397,502 637,205 Weighted average number of shares 5,400,000 5,217,777 5,309,890 Basic earnings per share 8.42 7.62 12.00(pence) Diluted earnings per share:Diluted profit attributable to ordinary 455,359 397,502 637,205shareholders Diluted weighted average number of shares 5,723,876 5,272,432 5,481,201 Diluted earnings per share (pence) 7.96 7.54 11.63 This information is provided by RNS The company news service from the London Stock Exchange