Electronic Data Processing Regulatory News (EDP)

22 Jun 2007 07:00

Electronic Data Processing PLC22 June 2007 22 June 2007 Electronic Data Processing PLC (EDP) Interim results - 6 months to 31 March 2007 EDP is the largest IT solution provider to the UK independent Builders andTimber Merchants market place and a leading supplier to the wholesaledistribution industry. Financial Highlights • Turnover £3.30 million (2006: £3.27 million). • Profit before tax £226,000 (2006: £218,000). • Operating profit from existing operations up 47%. • Integration of Vecta completed and trading in line with expectations. • Hosting revenues now represent 16% of total revenues (2006: 9%). • Recurring revenues represent 67% of total revenues. • Continued R&D investment of £691,000 in first half (£1.46 million in the full year to 30 September 2006). • Cash balances £5.5 million after £919,000 acquisition of Vecta. • Interim dividend maintained at 0.713p per share. Michael Heller, Chairman of EDP, said: "Market conditions within the sector we address remain competitive. However,increased demand for our hosting services and business and sales intelligenceproducts means that I continue to look forward with confidence." -Ends- For further information please contact: Julian Wassell Toby MountfordActing Chief Executive Citigate Dewe Rogerson0114 262 2007 020 7638 9571 www.edp.fastfreenet.com Chairman's Statement It was with deep sadness that on 23 May I had to report the sudden death ofRichard Jowitt, Group Chief Executive. Richard had been with EDP for over 37years, 35 years as Group Chief Executive. He made an immense contribution tothe business during that time, leading the transformation of the Group from acomputer bureau, through a hardware seller to now a software and servicesbusiness. He will be sadly missed by all his colleagues and friends. Turning to the interim results, Group sales for the period to 31 March 2007 were£3.30 million (2006: £3.27 million). Contracted recurring revenues, relatingprincipally to annual software licences and hosting services fees, represented67% of turnover. Group pre-tax profit for the period was £226,000 (2006: £218,000) whichincluded, as anticipated, an operating loss of £95,000 in the newly acquiredVecta business. The profit from existing operations in the period was £321,000,an increase of 47%. On 16 October 2006 we acquired the business and assets of Vecta SoftwareCorporation, a provider of complementary sales intelligence solutions. Theintegration of the business into the Group has been completed and it hasperformed in line with our expectations. We continue to expect that Vecta willbe broadly earnings neutral in the current financial year and earnings enhancingin 2007/8. Reported turnover of £169,000 during the period relates only tonewly signed licences and related professional services. We expect the run rateof sales to steadily increase as other existing customers of the Vecta productrenew their licences and software support contracts with us. We have continuedto provide support throughout the period to over 160 existing users of theproduct which is not reflected yet in our turnover. We have seen continued growth in the Group's hosting operation where revenuesnow represent 16% of total sales (2006: 9%). Hosting allows our customers tooutsource their IT facilities whilst we strengthen the recurring revenueposition of the Group through new long-term contracts. We expect to continue tosee more and more of our customers electing to utilise this service. Research & Development expenditure has been maintained at £691,000 during theperiod (£1.46 million in the full year to 30 September 2006) all of which hasbeen charged in the Income Statement. Our R&D effort has been focused on thecontinued evolution of our distribution software applications and theenhancement of our business intelligence and sales intelligence products, Vectaand myViewpoint. The Group's balance sheet remains strong with net assets of £12.9 million. Cashbalances amounted to £5.5 million compared to £6.4 million at 30 September 2006which reflects the cost of acquiring the Vecta business of £919,000. We remaininterested in making further acquisitions of compatible software businesses. Asubstantial part of the Group's balance sheet comprises freehold property whichis principally used to house the Group's day-to-day operations. A valuation waslast carried out two years ago when the value of the Group's current propertieswas £9.9 million compared to a book value of £7.7 million. Your Directors have resolved to pay an interim dividend of 0.713p per ordinaryshare, the same as last year, and this dividend will be paid on 1 August 2007 tothose shareholders on the register on 6 July 2007. The shares will beex-dividend on 4 July 2007. Market conditions within the sector we address remain competitive. However,increased demand for our hosting services and business and sales intelligenceproducts means that I continue to look forward with confidence. Michael Heller 21 June 2007Chairman Consolidated Income StatementFor the 6 months ended 31 March 2007 Unaudited Unaudited Audited 6 months 6 months Full year to to to 31.3.07 31.3.06 30.9.06 £'000 £'000 £'000 Revenue 3,297 3,274 6,325 Gross profit 3,009 2,961 5,762 Administrative expenses (2,919) (2,868) (5,596) Operating profit 90 93 166 Profit on disposal of property - - 420Finance revenue 136 125 280 Profit before tax 226 218 866 Income tax expense (66) (17) (29) Profit for the period attributableto equity holders of the parent 160 201 837 Earnings per share - basic and diluted 0.65p 0.82p 3.42p Dividends per share 0.713p 0.713p 2.613p Net assets per share 52.9p 52.5p 53.5p Consolidated Balance Sheetat 31 March 2007 Unaudited Unaudited Audited at at at 31.3.07 31.3.06 30.9.06 £'000 £'000 £'000Non-current assetsProperty, plant and equipment 6,570 6,779 6,648Investment property 665 673 668Deferred tax asset 136 174 205Intangible assets 963 88 71 8,334 7,714 7,592Current assetsAssets held for sale 1,082 2,131 1,082Inventories 186 218 210Trade and other receivables 2,452 1,752 2,276Income tax receivable - 92 -Cash and cash equivalents 5,477 5,789 6,439 9,197 9,982 10,007Current liabilitiesDeferred income (2,251) (2,493) (2,347)Income tax payable (78) (55) (19)Trade and other payables (1,744) (1,689) (1,444) (4,073) (4,237) (3,810) Net current assets 5,124 5,745 6,197 Total assets less current liabilities 13,458 13,459 13,789 Non-current liabilitiesDeferred income (78) (15) (22)Employee benefits (343) (465) (579)Deferred tax liability (106) (150) (106) (527) (630) (707) 12,931 12,829 13,082 EquityIssued capital 1,223 1,222 1,222Share premium 98 87 87Capital redemption reserve 88 88 88Translation reserve - 3 2Retained earnings 11,522 11,429 11,683 12,931 12,829 13,082 Consolidated Cash Flow Statementfor the 6 months ended 31 March 2007 Unaudited Unaudited Audited 6 months 6 months Full year to to to 31.3.07 31.3.06 30.9.06 £'000 £'000 £'000 Cash flows from operating activitiesProfit for the period 160 201 837Adjustments for:Depreciation and amortisation 190 198 404Net profit on disposal of property, plant and equipment - - (416)Pension charge 114 68 117Pension payments (144) (66) (297)Finance revenue (136) (125) (280)Income tax expense 66 17 29Changes in working capital (548) 129 (163) Cash (used in)/received from operations (298) 422 231Interest received 139 123 272Income taxes (paid)/received - (16) 41Net cash from operating activities (159) 529 544 Cash flows from investing activitiesAcquisition of business (919) - -Purchase of property, plant and equipment (72) (41) (96)Purchase of intangible assets (22) - -Proceeds from sale of property, plant and equipment 200 32 1,302Net cash (used in)/generated from investing activities (813) (9) 1,206 Cash flows from financing activitiesSale of own shares 12 - -Dividends paid - - (580)Net cash generated from/(used in) financing activities 12 - (580) Net (decrease)/increase in cash and cash equivalents (960) 520 1,170Cash and cash equivalents at beginning of period 6,439 5,269 5,269Effect of exchange rate fluctuations on cash held (2) - -Cash and cash equivalents at end of period 5,477 5,789 6,439 Consolidated Statement of Recognised Income and Expensefor the 6 months ended 31 March 2007 Unaudited Unaudited Audited 6 months 6 months Full year to to to 31.3.07 31.3.06 30.9.06 £'000 £'000 £'000 Actuarial gains/(losses) on defined benefit pension 206 (68) (364)schemeTax on items recognised directly in equity (62) 21 109Foreign exchange translation difference (2) - (1) Net income/(expense) recognised directly In equity 142 (47) (256) Profit for the period 160 201 837 Total recognised income and expense attributableto equity holders of the parent 302 154 581 Notes (1) The interim results to 31 March 2007, which are unaudited, have beenprepared in accordance with the accounting policies to be adopted in the Group'snext annual accounts, which are the same as those policies used in thepreparation of the accounts for the year ended 30 September 2006. (2) In preparing these interim results the significant judgements andestimates made by management in applying the Group's accounting policies arethe same as those that applied to accounts for the year ended 30 September 2006. (3) The comparative figures for the financial year ended 30 September2006 are not the Company's statutory accounts for that financial year. Thoseaccounts have been reported on by the Company's auditor and delivered to theRegistrar of Companies. The independent auditor's report was unqualified anddid not contain a statement under Section 237 (2) or (3) of the Companies Act1985. (4) The taxation charge is derived from the Directors' best estimate ofthe annual tax rate applied to the result for the period. (5) Earnings per share is calculated by dividing the profit after tax of£160,000 (2006: £201,000) by 24,436,648 (2006: 24,432,362) being the averagenumber of shares in issue during the period. Basic and diluted earnings pershare are both 0.65p (2006: 0.82p). (6) On 16 October 2006 the Group acquired the business and certain assetsof Vecta Software Corporation for £900,000 cash together with associatedexpenses of £19,000. Vecta is a leading provider of sales intelligencesolutions. In the six months to 31 March 2007 the business contributed £169,000to Group turnover and made a loss of £95,000 before tax. If the acquisition hadtaken place on 1 October 2006, the start of the current accounting period,management estimates that the impact on Group results would not have beenmaterially different. Provisional values for the net assets acquired have beenincorporated in these interim financial statements. These values will befinalised in the Group's accounts for the year ended 30 September 2007 inaccordance with IFRS 3. This information is provided by RNS The company news service from the London Stock Exchange