6 Mar 2007 07:00
EMBARGOED - NOT TO BE RELEASED UNTIL 7.00 AM ON 6 March, 2007 Amteus PLC ("Amteus" or "the Company") Preliminary Results for the year ended 30 September 2006 Chairman's Statement
I am pleased to announce the results for Amteus plc in its first year as a public limited company. 2006 has been a year of intense activity for the Group both in the development and defining of its products and in establishing the sales proposition and the route to market.
The Directors believe that the Amteus secure suite of communications products represents an outstanding offering in terms of technology and value. The Group's products address the universal problem which companies have of controlling Peer to Peer communications within their organisations. In particular, through the use of Amteus Secure Instant Messaging, companies are able to have a secure and private system of Instant Messaging ("IM") under their own control within their own private network. Customers have the ability to record and store all communications which enables the customer to comply with regulatory, legal and internal control requirements.
Results
Turnover in the year ended 30 September 2006 amounted to ‚£37,417 (2005: 16 month period - ‚£23,155). The loss before and after taxation was ‚£2,459,287 (2005: 16 month period - loss of ‚£3,091,522). Under the Group's revenue recognition policy there was ‚£66,449 of deferred revenue held in the balance sheet.
The Product and Technology
The Amteus product is a complete, secure, stand-alone communication software system using Internet Protocol ("IP"). It offers IM, file transfer, file sharing, presence (the ability to see whether people are online, busy etc.) and Voice over IP ("VoiP"), all of which provide communications over the internet. It is offered in a simple to implement, private package consisting of a server and user software based, currently, on a Microsoft platform.
Additional functionality that has been developed since flotation includes compliance (secure recording of all communications), web browser access, an auto-update facility, as well as a number of other improvements that make future developments easier and also improve the users' experience of the product.
Competition
The competitive landscape consists of products in three general categories: do-it-yourself open-source systems which are technically difficult to implement with very little direct support available; publicly hosted systems with all the inevitable security concerns and, again, lack of direct support; and finally, complex, integrated implementations, supplied by major software suppliers, which are relatively expensive when compared to the Amteus product and can require major changes to an organisation's IT strategy and infrastructure in order to encompass all the requirements. The Directors believe that the Amteus products address these issues and provide the customer with an effective, high value-for-money proposition.
Strategy
During the year the Group has refined its sales strategy from majoring on the VoIP product seeking to sell it direct to customers, to leading with the IM product and selling it through resellers. The product is attractive to resellers who inform us that they do not have access to a comparable IM product. It is also attractively priced, so that resellers can sell the product profitably to their customer bases. Since the new strategy was adopted by the Group at the end of November 2006, sales have increased and the take-up from the reseller sector has been both positive and encouraging.
People
The Group now employs 51 people, the majority of whom are in sales, customer support and product development.
The Rt. Hon. Michael Howard QC MP joined the Board in June 2006 and after the end of the period under review, Simon Duffy, previously Executive Vice-Chairman of NTL joined the Board in February 2007.
On 31 December 2006, having reached the age of 77, Sir Martin Jacomb retired from the Board. We thank him for his contribution to the growth and development of the Group.
On behalf of the Board I would also like to thank all of our staff for their hard work and their contribution to the Group's progress.
Post Balance Sheet Events
The Company has undertaken a placing of 4,862,500 new ordinary shares at 72p per share. The placing is expected to raise ‚£3.14 million, net of expenses. The shares are expected to be admitted to trading on AIM on 12 March 2007. This will provide the Group with the necessary funds to take advantage of the sales opportunity, to support our resellers and to market the product aggressively.
Outlook
The revised product, along with the new route to market through the re-sellers, has resulted in an immediate increase in sales. Over 25 resellers have committed to the product since the start of December 2006. The Directors expect the product to be taken up by some of the largest resellers in the UK. This should result in significant sales in the coming year, thereby enabling the Group to establish a valuable position in the rapidly growing market for secure communications.
Michael D Abrahams CBE DLChairman6 March 2007
Consolidated Profit and Loss Account
for the year ended 30 September 2006
Note 30 September 30 September 2006 2005 (12 months) (16 months) Audited Audited ‚£ ‚£ Turnover 37,417 23,155 Cost of sales (9,575) (75,854) Gross profit/(loss) 27,842 (52,699) Operating expenses (2,494,388) (3,004,577) OPERATING LOSS (2,466,546) (3,057,276) Interest receivable and 57,197 -similar income Interest payable and similar (49,938) (34,246)charges LOSS ON ORDINARY ACTIVITIES (2,459,287) (3,091,522)BEFORE TAXATION Tax on loss on ordinary - -activities LOSS FOR THE FINANCIAL PERIOD (2,459,287) (3,091,522) Loss per share - basic and diluted 3 (7.6p) (20.6p)Consolidated Balance Sheetas at 30 September 2006 Note 30 September 30 September 2006 2005 Audited Audited ‚£ ‚£ FIXED ASSETS Tangible assets 178,715 214,827 Investments - 1 CURRENT ASSETS 178,715 214,828 Stocks 85,125 2,760 Debtors 59,774 16,848 Cash at bank and in hand 919,958 41 1,064,857 19,649 CREDITORS: amounts falling due 5 (1,194,897) (1,218,150)within one year NET CURRENT LIABILITIES (130,040) (1,198,501) TOTAL ASSETS LESS CURRENT 48,675 (983,673)LIABILITIES CREDITORS: amounts falling due after 6 (593,086) (508,106)more than one year NET LIABILITIES (544,411) (1,491,779) CAPITAL AND RESERVES Called up share capital 3,447,458 2,628,700 Share premium 2,579,460 - Profit and loss account (6,571,329) (4,120,479) EQUITY SHAREHOLDERS' DEFICIT (544,411) (1,491,779)
Consolidated Cash Flow Statement
for the year ended 30 September 2006
Note 30 September 30 September 2006 2005 (12 months) (16 months) Audited Audited ‚£ ‚£ Net cash outflow from (a) (2,258,607) (2,202,148)operating activities Returns on investments and (b) 31,743 (34,246)servicing of finance Capital expenditure (net) (b) (26,226) (123,960) Management of liquid (750,000) -resources Cash outflow before (3,003,090) (2,360,354)financing Financing (b) 3,238,589 2,294,697 Increase/(decrease) in cash (c) 235,499 (65,657)in the period (a) Reconciliation of operating loss to net cash outflow from operatingactivities 30 September 30 September 2006 2005 (12 months) (16 months) ‚£ ‚£ Operating loss (2,466,546) (3,057,276) Depreciation charge 83,613 120,896 Loss on sale of tangible 4,861 12,720fixed assets Employee share based payment 8,437 - (Increase)/decrease in (82,365) 14,506stocks (Increase)/decrease in (39,655) 41,286debtors Increase in creditors 233,048 665,720 Net cash outflow from operating (2,258,607) (2,202,148)activities (b) Analysis of cash flows 30 30 September September 2006 2005 (12 (16 months) months) ‚£ ‚£ Returns on investment and servicing of finance Interest paid (25,454) (34,246) Interest received 57,197 - Net cash inflow/(outflow) 31,743 (34,246) Capital expenditure Purchase of tangible fixed (101,059) (151,168) assets Sale of tangible fixed 74,833 27,608 assets Net cash outflow (26,226) (123,960) Financing Issue of ordinary shares (net of issue 3,398,219 2,627,700 costs) Capital element of finance (94,959) (74,224) leases Related party loans (64,671) (258,779) Net cash inflow 3,238,589 2,294,697
(c) Analysis and reconciliation of net (debt)/funds
At Cashflow Non-cashflow At ‚£ ‚£ 1 October 30 2005 September ‚£ 2006 ‚£ Cash on deposit - 750,000 - 750,000 Cash at bank and in hand 41 169,917 - 169,958 Bank loans and overdrafts (65,582) 65,582 - - (65,541) 985,499 - 919,958 Other loans (937,271) 64,671 - (872,600) Finance leases (110,114) 94,959 (26,136) (41,291) Net (debt)/funds (1,112,926) 1,145,129 (26,136) 6,067 30 30 September September 2006 2005 (12 months) (16 months) ‚£ ‚£ Increase/(decrease) in cash 235,499 (65,657)in the period Purchase of deposits 750,000 - Cash inflow from debt and 159,630 42,350lease financing Change in net funds/(debt) 1,145,129 (23,307)resulting from cash flows New finance leases in the (26,136) (309,400)period Movement in net funds/(debt) 1,118,993 (332,707)in the period Net debt at 1 October 2005 (1,112,926) (780,219) Net funds/(debt) at 30 6,067 (1,112,926)September 2006
Notes to the financial statements
1. Publication of non-statutory accounts
The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2006 or 2005, but is derived from those accounts. Statutory accounts for 2005 have been delivered to the Registrar of Companies and those for 2006 will be delivered by 31 March 2007. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under s. 237(2) or (3) Companies Act 1985.
The financial information contained within this Preliminary Announcement was approved by the Board on 5 March 2007.
2. Accounting Policies
Accounting policies applied to the preliminary financial information are consistent with those used for the 2005 accounts.
3. Loss per share
The calculations of loss per ordinary share are based on the loss for the financial year and the weighted average number of ordinary shares in issue during the year. Dilutive earnings per share is based on the weighted average number of ordinary shares in issue, adjusted to reflect conversion of all dilutive potential ordinary shares. Dilutive potential shares comprise share options granted to employees. For the periods ended 30 September 2006 and 30 September 2005 the impact of share options is anti-dilutive and these have been excluded from the calculation of diluted weighted average share capital.
30 September 30 September 2006 2005 (12 months) (16 months) ‚£ ‚£ Loss for the year (2,459,287) (3,091,522) Number Number Weighted average number of shares 32,177,254 15,003,123 Pence Pence Basic and diluted loss per ordinary share (7.6) (20.6)
The weighted average number of ordinary shares reflect the share split on 21 November 2005, whereby each of the issued and unissued ordinary shares of ‚£1 each were divided into 10 ordinary shares of 10 pence each.
4. Dividends
No dividends are proposed for the year ended 30 September 2006 (2005: Nil)
5. Creditors: Amounts falling due within one year
30 September 30 September 2006 2005 ‚£ ‚£ Bank loans and overdrafts - 65,582 Obligations under finance leases and 25,547 48,612hire purchase contracts Trade creditors 269,781 165,262 Amounts due to related 298,529 490,667parties Accruals and deferred 245,667 277,544income Other taxes and social 314,899 170,483security Other creditors 40,474 - 1,194,897 1,218,150
6. Creditors: Amounts falling due after more than one year
30 September 30 September 2006 2005 ‚£ ‚£ Obligations under finance leases and hire 15,744 61,502purchase contracts Amounts due to related 577,342 446,604parties 593,086 508,106
7. Reconciliation of Movements in Equity Shareholders' Deficit
30 30 September September 2006 2005 ‚£ ‚£ New shares issued (net of issue 3,398,218 2,627,700 costs) Employee share based payment 8,437 - Loss for the financial period (2,459,287) (3,091,522) Opening equity shareholders' (1,491,779) (1,027,957)deficit Closing equity shareholders' (544,411) (1,491,779)deficit 8. Copies of the Report and Accounts will be sent to shareholders in due courseand will be available from the registered office of the Company, 57 CardiganLane, Leeds, LS4 2LE.Enquiries:Amteus plc 01756 770376 Michael Abrahams (Chairman) 020 7628 2200 John East & Partners Limited 01756 770376 John East/Simon Clements/Johnny Townsend Rawlings Financial
John Rawlings
AMTEUS PLC