Last checked at 1 Sep 2008 07:00
1st September 2008
Dillistone Group Plc
Record Interim results - Delivering Reach, Quality & Quantity
"Recruitment Software demand fuelled by Emerging Markets"
Dillistone Group Plc ('Dillistone' or 'the Group'), the AIM listed supplier of Recruitment Software is pleased to announce its record Interim results for the six months ended 30th June 2008.
Highlights
2008 2007 Change
Revenue £2.516m £1.928m +30%
Profit Before Tax £949k £659k +44%
Basic EPS 12.3p 8.42p +46%
Cash Balances £2.042m £1.534m* +33%
Interim Dividend 3.5p 2.5p +40%
Recurring revenues as a %age of total revenue increased to 43%, 31% up on 2007
Group operating margins increased to 37% from 34% in H1 2007
Sales growth by region; Asia - 47%, Europe - 36%, UK - 29%, USA - 21%
Dillistone working with clients in over 55 countries worldwide
Further take up of our 'Software as a Service' product ('SaaS')
Cash inflow of £767k in period
The Group is debt free
*Balance at 2007 year end (31/12/2007)
Commenting on the results, Jim McLaughlin, Chairman and Finance Director said:
"Despite recent uncertainties in global markets, Dillistone has achieved growth across all areas of our business; revenue, profit, cash, earnings per share, market share and geographic expansion. This represents our best performance to date.
"Coupled with this growth, we have improved our quality of earnings with recurring revenues now representing 43% of our headline sales. This is partly due to the increasing take up of our 'SaaS' product however for the most part as a consequence of the greater volume of support contracts directly linked to increased sales volume.
"We are delighted with Dillistone's continued development and the performance at the half year. Whilst we are optimistic about the full year result we are still mindful of the ongoing economic uncertainty."
For further enquiries:
| Jim McLaughlin, Chairman & Finance Director, Dillistone Group Plc | 01934 710 509 |
| John Wakefield 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 6 Months ended 30th June 2008, with record Interim results for the Group, and continued cash generation during the period.
Financial Performance
The financial results for the 6 Months ended 30th June show excellent growth in both sales and profitability. Overall sales increased by some 30% over the same period in 2007, underpinned by an increase of some 30% in non recurring revenues partly as a result of orders taken towards the end of 2007 which were implemented during the early part of 2008. Recurring revenues, mainly support contracts, increased by some 31% over the same period in 2007, and now comprise 43% of total revenues.
Total turnover in the period increased by 30% to £2,515,902 (6 Months ended 30 June 2007 £1,927,943), and profits before tax increased by 44% to £948,577 (2007 - £658,853). Geographically, sales in all operations grew well, with Asia posting an impressive increase of 47% over the same period last year, Europe 36%, the UK 29% and the USA a more modest 21%. However the nature of the US operation is now benefiting significantly from our initiative to offer our 'SaaS' product in the region, and now some 57% of the revenues in this region are recurring, which has contributed to an increase in profits attributable of some 82%.
The UK, which now has a higher level of costs than the rest of the Group increased its revenues by 29%, and operating profits by 33%. Overall Group operating margins increased from 34% in the first half of 2007 to 37% in the current year.
Cashflow has continued to reflect the profitable performance of the business, and at the end of the period we held net cash balances of £2,041,885, compared with £1,533,649 at the year end. There was a cash inflow of over £767,000 in the period (excluding foreign exchange effects), after the payment of corporation tax of some £250,000 reflecting the Group's tight controls over its working capital. The Group continues to have no borrowings whatsoever, and from this inflow paid a dividend of £324,000 in May 2008.
Earnings per share amounted to 12.3p in the period (2007 - 8.42p) an increase of 46% over the same period in 2007, and the Board has decided to pay an interim dividend of 3.5p per share on 3rd October 2008 to holders on the register on 12th September 2008. The cost of this dividend will be £189,000 and will be met from the cash resources of the Group. Shares will trade ex-dividend from 10th September 2008. In the absence of unforeseen circumstances, a further dividend of some 6.5p per share is expected to be paid following the publication of the final accounts and approval of shareholders at the Annual General Meeting.
Prospects
We enjoyed a very high level of orders towards the end of 2007 and our strong performance in the first half of 2008 reflects this. Whilst there is general economic uncertainty, and I do not expect our performance in the second half to match that of the first half, I do however anticipate that trading for the full year will be somewhat ahead of current market expectations. Following the launch of our latest product release, FILEFINDER 8, we have increased our market share and have won some significant and highly regarded new clients.
Jim McLaughlin
1st September 2008
| CONSOLIDATED INCOME STATEMENT | |||
| Year Ended | |||
| 6 Months ended 30 June | 31 December | ||
| 2008 | 2007 | 2007 | |
| £ | £ | £ | |
| Revenue | 2,515,902 | 1,927,943 | 4,066,463 |
| Cost of sales | (119,473) | (145,082) | (236,951) |
| Gross profit | 2,396,429 | 1,782,861 | 3,829,512 |
| Administrative expenses | (1,464,798) | (1,130,268) | (2,659,390) |
| Profit from operations | 931,631 | 652,593 | 1,170,122 |
| Investment income | 16,946 | 6,260 | 26,091 |
| Profit before tax | 948,577 | 658,853 | 1,196,213 |
| Tax expense | (284,573) | (204,244) | (391,838) |
| Profit for the period/year | 664,004 | 454,609 | 804,375 |
| Earnings per share (pence) | |||
| Basic | 12.30 | 8.42 | 14.90 |
| Diluted | 11.60 | 7.96 | 14.05 |
| CONSOLIDATED BALANCE SHEET | |||
| As at | |||
| As at 30 June | 31 December | ||
| 2008 | 2007 | 2007 | |
| ASSETS | £ | £ | £ |
| Non-current assets | |||
| Intangible assets | 655,862 | 632,180 | 639,835 |
| Property plant & equipment | 147,877 | 171,708 | 155,390 |
| 803,739 | 803,888 | 795,225 | |
| Current assets | |||
| Inventories | 21,506 | 48,322 | 2,334 |
| Trade and other receivables | 1,333,539 | 1,118,048 | 1,284,190 |
| Cash and cash equivalents | 2,041,885 | 1,190,608 | 1,533,649 |
| 3,396,930 | 2,356,978 | 2,820,173 | |
| Total Assets | 4,200,669 | 3,160,866 | 3,615,398 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 270,000 | 270,000 | 270,000 |
| Share option reserve | 36,476 | 18,071 | 26,778 |
| Retained earnings | 1,489,027 | 934,257 | 1,149,023 |
| Translation reserve | 82,939 | (17,478) | 17,736 |
| Total Equity | 1,878,442 | 1,204,850 | 1,463,537 |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 1,982,768 | 1,473,904 | 1,848,038 |
| Current tax payable | 336,459 | 277,868 | 300,823 |
| 2,319,227 | 1,751,772 | 2,148,861 | |
| Non-current liabilities | |||
| Deferred tax liability | 3,000 | 7,328 | 3,000 |
| Non-current tax payable | - | 196,916 | - |
| Total Liabilities | 2,322,227 | 1,956,016 | 2,151,861 |
| Total Liabilities and Equity | 4,200,669 | 3,160,866 | 3,615,398 |
| CONSOLIDATED CASH FLOW STATEMENT | |||
| Year ended | |||
| 6 Months ended 30 June | 31 December | ||
| 2008 | 2007 | 2007 | |
| £ | £ | £ | |
| Operating Activities | |||
| Profit for the year / period | 931,631 | 652,593 | 1,170,122 |
| Less taxation paid | (248,937) | (204,244) | (319,590) |
| Adjustment for | |||
| Depreciation | 52,938 | 61,079 | 126,606 |
| Share option expense | 9,698 | 4,755 | 13,462 |
| Loss on disposal | - | - | 657 |
| Operating cash flows before movements in | |||
| working capital | 745,330 | 514,183 | 991,257 |
| (Increase) in receivables | (49,349) | (290,415) | (456,557) |
| (Increase) / decrease in inventories | (19,172) | (27,112) | 18,876 |
| Increase in payables | 134,730 | 513,619 | 637,216 |
| Net cash used in operating activities | 811,539 | 710,275 | 1,190,792 |
| Investing Activities | |||
| Interest received | 16,946 | 6,260 | 26,091 |
| Purchases of property plant and equipment | (22,941) | (18,549) | (35,653) |
| Investment in development costs | (38,400) | (34,671) | (75,088) |
| Net cash used in investing activities | (44,395) | (46,960) | (84,650) |
| Financing Activities | |||
| Dividends paid | (324,000) | - | (135,000) |
| Net cash used by financing activities | (324,000) | - | (135,000) |
| Net increase in cash and cash equivalents | 443,144 | 663,315 | 971,142 |
| Cash and cash equivalents at beginning of | |||
| year / period | 1,533,649 | 538,591 | 538,591 |
| Effect of foreign exchange rate changes | 65,092 | (11,298) | 23,916 |
| Cash and cash equivalents at end of year / | |||
| period | 2,041,885 | 1,190,608 | 1,533,649 |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||
| Share | Share option | Retained | Foreign | Total | |
| capital | reserve | earnings | exchange | ||
| £ | £ | £ | £ | £ | |
| Balance at 31 December 2006 | 270,000 | 13,316 | 479,648 | (6,180) | 756,784 |
| Profit for the 6 months ended 30 June 2007 | - | - | 454,609 | - | 454,609 |
| Share option expense | - | 4,755 | - | - | 4,755 |
| Exchange differences on translation of | |||||
| overseas operations | - | - | - | (11,298) | (11,298) |
| Balance at 30 June 2007 | 270,000 | 18,071 | 934,257 | (17,478) | 1,204,850 |
| Profit for the 6 months ended 31 December 2007 | - | - | 349,766 | - | 349,766 |
| Share option expense | - | 8,707 | - | - | 8,707 |
| Exchange differences on translation of | |||||
| overseas operations | - | - | - | 35,214 | 35,214 |
| Dividends paid | - | - | (135,000) | - | (135,000) |
| Balance at 31 December 2007 | 270,000 | 26,778 | 1,149,023 | 17,736 | 1,463,537 |
| Profit for the 6 months ended 30 June 2008 | - | - | 664,004 | - | 664,004 |
| Share option expense | - | 9,698 | - | - | 9,698 |
| Exchange differences on translation of | |||||
| overseas operations | - | - | - | 65,203 | 65,203 |
| Dividends paid | - | - | (324,000) | - | (324,000) |
| Balance at 30 June 2008 | 270,000 | 36,476 | 1,489,027 | 82,939 | 1,878,442 |
NOTES TO THE INTERIM
| NOTES TO THE INTERIM REPORT |
CONSOLIDATED STATEMENT OF
1. Basis of Preparation
The financial information for the six months ended 30 June 2008 included in this interim report comprises the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement, the consolidated statement of changes in equity and the related notes on pages 10 - 12. 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 and their review opinion is included in this interim report. The financial information set out in this report does not constitute statutory accounts as defined by the Companies Act 1985. Financial information for the year ended 31 December 2007 included herein is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985.
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. 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 | ||
| 2008 | 2007 | 2007 | |
| £ | £ | £ | |
| UK | 1,285,633 | 999,395 | 2,180,172 |
| Europe | 570,005 | 420,036 | 845,745 |
| USA | 407,702 | 336,158 | 633,597 |
| Asia Pacific | 252,562 | 172,354 | 406,949 |
| 2,515,902 | 1,927,943 | 4,066,463 | |
| Business Segment | |||
| The following table provides an analysis of the Group's sales by business segment | |||
| Year ended | |||
| 6 Months ended 30 June | 31 December | ||
| 2008 | 2007 | 2007 | |
| £ | £ | £ | |
| Recurring | 1,071,388 | 816,914 | 1,665,870 |
| Non Recurring | 1,444,514 | 1,111,029 | 2,400,593 |
| 2,515,902 | 1,927,943 | 4,066,463 | |
| 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 | |||
| Year ended | |||
| 6 Months ended 30 June | 31 December | ||
| 2008 | 2007 | 2007 | |
| £ | £ | £ | |
| UK | 456,307 | 343,366 | 536,428 |
| Europe | 440,668 | 308,427 | 656,827 |
| USA | 156,840 | 86,322 | 185,339 |
| Asia Pacific | 141,860 | 99,443 | 258,064 |
| 1,195,675 | 837,558 | 1,636,658 | |
| Unallocated Expenses | (264,044) | (184,965) | (466,536) |
| Profit from Operations | 931,631 | 652,593 | 1,170,122 |
4. Dividends
A dividend of 3.5 pence per share, totalling £189,000 has been approved by the Board, and will be paid on 3rd October 2008 to holders on the register on 12th September 2008.
5. Earnings per Share
| Year ended | |||
| 6 Months ended 30th June | 31 December | ||
| 2008 | 2007 | 2007 | |
| Basic earnings per share | |||
| Profit attributable to ordinary shareholders | £664,004 | £454,609 | £804,375 |
| Weighted average number of shares | 5,400,000 | 5,400,000 | 5,400,000 |
| Basic earnings per share (pence) | 12.30 | 8.42 | 14.90 |
| Diluted Earnings per share | |||
| Profit attributable to ordinary shareholders | £666,427 | £455,359 | £804,385 |
| Diluted weighted average number of shares | 5,745,449 | 5,723,876 | 5,726,811 |
| Diluted earnings per share (pence) | 11.60 | 7.96 | 14.05 |