Hermes Pac. Regulatory News (HPAC)

27 Jun 2007 07:01

India Outsourcing Services PLC27 June 2007 For immediate release 27 June 2007 INDIA OUTSOURCING SERVICES PLC ("India Outsourcing" or "the Company") Interim Results for the six months ended 31 March 2007 India Outsourcing Services plc (AIM: IOS), a company formed to capitalise onacquisition and investment opportunities primarily in the business processoutsourcing (BPO) market, is pleased to announce its interim results for the sixmonths to 31 March 2007. Highlights • The Company continues to evaluate potential acquisitions, both within and outside of the BPO market, and is currently carrying out due diligence on two potential transactions • The rising valuations of BPO companies in India, as reported in our full year results, has prompted the Company to broaden its investment search geographically and also to include sectors outside of the BPO market • Strong balance sheet - net cash of £2.62 million at 31 March 2007, equivalent to 27.9p per share • Reduced net loss in the period of £127,977 (H1 2006: net loss £213,808) and loss per share of 1.35p (H1 2006: 7.33p) Amit Pau, Chief Executive of India Outsourcing Services, said: "Following therise in valuations of BPO companies in India, we have broadened our investmentsearch to include geographies outside of India and investment opportunitiesoutside of the BPO sector. In consultation with our key investors, we are nowmoving forward with two potential acquisition opportunities, and we hope to bein a position to announce further details in respect of one of these in thecoming weeks." For further information: India Outsourcing Services plc Tel: 020 7297 0010 Haresh Kanabar, Chairman Amit Pau, Chief Executive Teather & Greenwood Tel: 020 7426 9000 Mark Dickenson Sindre Ottesen Buchanan Communications Tel: 020 7466 5000 Mark Court CHAIRMAN'S STATEMENT I am pleased to report that, for the six months ended 31March 2007, we havesubstantially reduced our post-tax loss to £127,977 compared with the post-taxloss of £213,808 incurred in the corresponding six month period last year. Theloss per share has also been significantly reduced, to 1.35p in the period underreview compared with a loss per share of 7.33p in the six month period lastyear. The reduction in losses is a result of very careful cost control at the Company,even though there has been a significant level of activity during the periodunder review. Our balance sheet remains strong with net cash at the balance sheet date of 31March 2007 of £2.62 million (H1 2006: £3.42m). This half-year cash balance isequivalent to 27.9 pence per share, representing a very significant premium tothe Company's share price during the period and into the current half. As we indicated in our annual report the business process outsourcing (BPO)market continues to grow strongly but that in India the valuation expectationsof vendors were quite high. Valuations of BPO companies in India are continuingat a level where the creation of value from an acquisition is difficult todeliver. As a result the Board, in consultation with its key shareholders, has decided towiden its search for potential acquisitions and investments to ensure that anytransaction that we do carry out will create value for our shareholders. During the period we have looked at various potential projects both in India andelsewhere, within and outside the BPO sector. Most of the initial due diligenceon these projects has been carried out in-house, thereby minimising externalprofessional and other costs. After a systematic and detailed review of thesepotential projects, some of them have failed to meet our criteria and hence wewill not be proceeding further with these projects. However, we have been encouraged by some of the potential transactions that wehave seen. In particular we are continuing to carry out due diligence work ontwo transactions, both of which look promising. Our current expectation,assuming the successful completion of the on-going due diligence, is that wewill be able to announce further details on at least one of these opportunitiesin the next few weeks. We look forward to updating shareholders on progress asappropriate. Outlook India Outsourcing benefits from a strong cash position and an encouragingpipeline of potential deals, which allows us to look forward to the future withconfidence. By broadening our investment search into new geographies and sector,we are confident that we will be able to deliver a transaction that will createvalue for our shareholders. Haresh Kanabar Chairman 26 June 2007 India Outsourcing Services Plc Profit and loss account for the period ended 31 March 2007 6 months ended 6 months ended Year ended 31 March 2007 31 March 2006 30 September 2006 (unaudited) (unaudited) (audited) £ £ £ Administrative expenses 196,241 226,888 960,459 Operating Loss (196,241) (226,888) (960,459) Net Interest receivable 68,264 13,080 84,904 Loss on ordinary activities before taxation (127,977) (213,808) (875,555) Tax on loss on ordinary activities - - Loss on ordinary activities after taxation (127,977) (213,808) (875,555) Loss per share- basic and diluted (1.35p) (7.33p) (14.1p) All amounts relate to continuing activities. All recognised gains and losses for the period have been included in the profitand loss account. India Outsourcing Services Plc Balance sheet at 31 March 2007 6 months ended 6 months ended Year ended 31 March 2007 31 March 2006 30 September 2006 (unaudited) (unaudited) (audited) £ £ £ Fixed assets Tangible assets 15 2,609 1,141 Current assets Debtors 27,921 44,777 24,404Cash at bank and in hand 2,624,866 3,373,237 2,800,000 2,652,787 3,418,014 2,824,404 Creditors falling due within one year (142,011) (111,843) (186,777) Net current assets 2,510,776 3,306,171 2,637,627 Net assets 2,510,791 3,308,780 2,638,768 Capital and reservesCalled up share capital 947,917 947,917 947,917Share premium account 2,999,775 2,999,040 2,990,775Profit and loss account (1,427,901) (638,177) (1,299,924) Shareholders' funds 2,510,791 3,308,780 2,638,768 India Outsourcing Services Plc Cash flow statement for the period ended 31 March 2007 6 months ended 6 months ended Year ended 31 March 2007 31 March 2006 30 September 2006 (unaudited) (unaudited) (audited) £ £ £ Net cash outflow from operating activities (206,253) (259,330) (933,272) Returns on investments and servicingof finance Interest received 68,264 13,080 84,904 Net cash inflow from returns on investments and 68,264 13,080 84,904servicing of finance Capital expenditurePurchase of tangible fixed assets - - - Net cash outflow for capital expenditure Net cash outflow before financing (137,989) (246,250) (848,368) Financing Issue of ordinary shares 3,500,000 3,500,000Expenses paid in connection with share issues (240,308) (248,572) Cash inflow from financing 3,259,692 3,251,428 Increase (decrease) in net cash (137,989) 3,013,442 2,403,060 India Outsourcing Services Plc Notes to the Interim Report 1. Basis of preparation The interim accounts for the six months ended 31 March 2007 are unaudited and donot constitute statutory accounts in accordance with section 240 of theCompanies Act 1985. The financial statements have been prepared in accordance with currentlyapplicable Accounting Standards in the United Kingdom, which have been appliedconsistently, and under the historical cost convention. Accounting policies consistent with those applied in the financial statementsfor the year ended 30 September 2006 have been used in preparing the unauditedinterim financial statements for the 6 months ended March 2007. 2. Taxation There is no tax charge for the period due to the loss arising. 3. Dividends The Directors are not declaring a dividend for the six months ended 31 March2007. 4. Loss per ordinary share The calculation of basic and diluted loss per share of 1.35 (2006 - 7.33) penceis based on the loss for the period of £127,977 (2006 - £213,808 and on9,479,167 (2006 -2,915,064) ordinary shares, being the weighted average numberof ordinary shares in issue during the period ended 31 March 2007. The effect of all potential ordinary shares is antidilutive and thereforedilutive EPS is the same as basic EPS. 5. Copies of interim results Copies of the interim results are available from the Company's office, 22 SohoSquare, London W1D 4NS, and from the Company's website. This information is provided by RNS The company news service from the London Stock Exchange