30 Jun 2008 07:00
30 June 2008 Amteus plc ("Amteus" or "the Company") Interim Results for the six months ended 31 March 2008
Chairman's statement
Amteus, the provider of secure and identifiable instant messaging solutions, announces its interim results for the six months ended 31 March 2008.
Results
Revenue in the six months to 31 March 2008 amounted to ‚£69,289 (2007: ‚£47,959)and the loss before and after tax was ‚£1,606,480 (2007: ‚£1,595,155). Under theCompany's revenue recognition policy, there was ‚£243,212 of deferred revenueheld at the balance sheet date.
On 23 April 2008, the company raised ‚£1.5 million (after expenses) through a placing of 12,000,200 new ordinary shares at 15p per share.
Related party transaction
On 29 May 2008, Amteus announced that it had entered into an agreement with TheMedia Buzz Ltd ("The Media Buzz") to sell its relationship and acquisitionintelligent marketing services product to small and medium enterprise (`SME')and corporate customers. As a result of this agreement, sales in the currentquarter to June 2008 have increased substantially compared with the same periodlast year. In addition, the average order value has increased significantlyfrom less than ‚£2,000 during March 2008 to approximately ‚£12,000 during June2008.Outsourcing agreementAs already announced, the Company is working with a reseller partner to sellinto the education sector and certain other business sectors. The resellerpartner has now received its first substantial order for Amteus' products andthe Company is finalising arrangements to commence a roll-out programme as soonas possible.
Amteus is also making progress in identifying similar partners and the Directors are confident that further agreements will be signed in the next 12 months.
Product developmentWe have continued to invest in our secure communication product with particularemphasis on new interactive functionality. The Company will also be seeking tocombine this functionality with a Web 2.0 website jointly developed with TheMedia Buzz.
International Financial Reporting Standards ("IFRS")
As an AIM listed company, Amteus has had to comply with IFRS for the first timewhen preparing these interim results. Consequently, the interim statement hasbeen prepared using these new accounting standards and the comparative numbersfrom prior periods have been restated where necessary.
People
Amteus now employs 54 people, of which 19 have been recruited since March 2008, with the majority of them working in sales and marketing.
Outlook
The Board is confident that, by developing its relationship with The Media Buzzfurther, the significant sales growth achieved in the third quarter to 30 June2008 will be maintained for the full year. The directors also believe that theCompany's new reseller agreement, combined with the exciting and innovative Web2.0 developments, will enable Amteus to achieve further growth and increaseshareholder value in the future.Michael Abrahams CBE DLChairman30 June 2008Condensed Consolidated Income StatementFor the six month ended 31 March 2008 Note Unaudited Unaudited Audited 31 March 31 March 30 September 2008 2007 2007 (6 months) (6 months) (12 months) ‚£ ‚£ ‚£ Continuing operations Revenue 2 69,289 47,959 131,668 Cost of sales (55,365) (6,656) (56,275) Gross profit 13,924 41,303 75,393 Operating expenses (1,593,152) (1,623,180) (3,209,526) OPERATING LOSS (1,579,228) (1,581,877) (3,134,133) Investment revenue 4,377 12,736 48,708 Finance costs (31,629) (26,014) (33,369) LOSS BEFORE TAXATION (1,606,480) (1,595,155) (3,118,794)
Tax on loss on ordinary activities 3 - -
-
LOSS FOR THE PERIOD FROM CONTINUING (1,606,480) (1,595,155) (3,118,794) OPERATIONS ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY
Loss per share 4 (4.0p) (4.6p) (8.3p) * basic and diluted
STATEMENT OF RECOGNISED INCOME AND EXPENSE
There is no recognised income or expense for the financial period other thanthose shown in the condensed consolidated income statement above andconsequently no separate statement of recognised income and expense has beenpresented.Condensed Consolidated Balance Sheet31 March 2008 Unaudited Unaudited Audited 31 March 31 March 30 September 2008 2007 2007 ‚£ ‚£ ‚£ NON-CURRENT ASSETS Intangible assets 52,903 15,184 23,349 Property, plant and equipment 132,162 168,817 178,855 185,065 184,001 202,204 CURRENT ASSETS Inventories 400,334 105,581 480,096 Trade and other receivables 211,942 183,239 267,720 Cash and cash equivalents 63 2,534,795 626,360 612,339 2,823,615 1,374,176 TOTAL ASSETS 797,404 3,007,616 1,576,380 CURRENT LIABILITIES Trade and other payables (1,829,429) (1,711,373) (1,067,127) Obligations under finance leases (25,677) (29,158) (37,129) (1,855,106) (1,740,531) (1,104,256) NET CURRENT (LIABILITIES)/ASSETS (1,242,767) 1,083,084 269,920 NON-CURRENT LIABILITIES Obligations under finance leases (27,249) (25,541) (44,736) TOTAL LIABILITIES (1,882,355) (1,766,072) (1,148,992) NET (LIABILITIES)/ASSETS (1,084,951) 1,241,544 427,388 EQUITY Share capital 4,045,328 3,948,709 4,045,328 Share premium 5,937,455 5,347,789 5,937,455 Share options reserve 394,365 277,026 300,224 Retained earnings (11,462,099) (8,331,980) (9,855,619) TOTAL EQUITY (1,084,951) 1,241,544 427,388Condensed Consolidated Cash Flow StatementFor the six months ended 31 March 2008 Note Unaudited Unaudited Audited 31 March 31 March 30 September 2008 2007 2007 (6 months) (6 months) (12 months) ‚£ ‚£ ‚£ Net cash from operating activities 5 (922,656) (1,430,399) (3,301,754) INVESTING ACTIVITIES Interest received 4,377 14,574 48,708 Proceeds on disposal of property, 43,950 25,651 54,902plant and equipment Purchase of property, plant and (68,968) (44,946) (87,133)equipment Net cash used in investing (20,641) (4,721) 16,477activities FINANCING ACTIVITIES Finance cost (31,629) (2,510) (57,853) Proceeds on issue of shares - 3,269,579 3,163,865 Repayments of obligations under (28,939) (17,679) (45,700)finance leases Receipt/(Repayment) of related party 377,568 (199,433) (68,633)loans Net cash used in financing 317,000 3,049,957 2,991,679activities Net (decrease)/increase in cash and (626,297) 1,614,837 (293,598)cash equivalents Cash and cash equivalents at 626,360 919,958 919,958beginning of year Cash and cash equivalents at end of 63 2,534,795 626,360year 1. BASIS OF PREPARATIONThe interim results for the six months ended 31 March 2008, which areunaudited, do not constitute statutory accounts within the meaning of theCompanies Act 1985 and have not been delivered to the Registrar of Companies.The results for the six months ended 31 March 2008 and 31 March 2007 have beenreviewed, but not audited, by the auditors.As Amteus plc is listed on the AIM Market ("AIM") the consolidated financialstatements for the year ended 30 September 2008 are required to be presented inaccordance with International Financial Reporting Standards ("IFRS"). Theinterim financial statements have been prepared in accordance with IFRS andcomparative information has been restated accordingly. Further details are setout in note 7.
The interim financial information has been prepared in accordance with IFRS and comparative information has been restated accordingly.
Amteus plc has adopted revised accounting policies in accordance with IFRS andthe interim financial statements have been prepared in accordance with theseaccounting policies, which have been published on the group's website www.amteus.com.The financial information for the period ended 30 September 2007 is an abridgedversion of Amteus plc's published statutory financial statements which receivedan unqualified auditors' report, contained no statement under section 237(2) or(3) of the Companies Act 1985 and which have been filed with the Registrar ofCompanies.The auditors have included an emphasis of matter paragraph in their auditreport, for the year ended 30 September 2007, to draw attention to the materialuncertainties associated with the Company's reliance on the adequate continuedfinancial support of its majority shareholder and the shareholder approval ofthe placing.
The existence of these material uncertainties may cast significant doubt about the Company's ability to continue as a going concern.
Going Concern
The interim financial statements have been prepared on the going concern basis, which assumes that the group will continue in operational existence for the foreseeable future.
A placing of ordinary shares has been concluded and has resulted in a cashinjection of ‚£1.5m net of issue costs. The Directors as part of the placingprocess, have prepared detailed forecasts that indicate the requirement for thecontinuing adequate financial support from the major shareholder.
This dependency on continued adequate support of the majority shareholder indicates the existence of material uncertainties, which may cast significant doubt about the company's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
In forming their opinion the Directors have taken into account the proceeds from the placing of ordinary shares and the commitment by the majority shareholder to continue to provide adequate financial support.
If the going concern basis was inappropriate, adjustments, which it is not practicable to quantify, would be required, including those to write down assets to their recoverable value, to reclassify fixed assets as current assets and to provide for any further liabilities that may arise.
2. segment information
Analysis between activities is not presented as the group's operations comprise a single class of business, which is the provision of secure and private communications over the internet for business. The group's operations are located in Great Britain.
3. tax on loss on ordinary activities
There is no tax charge for the period.
4. LOSS PER SHARE
Loss per share is calculated by dividing the loss after taxation by the weighted average number of ordinary shares in issue of 40,453,278 (31 March 2007: 34,970,320 shares and 30 September 2007: 37,631,140 shares).
5. NET CASH FROM OPERATING ACTIVITIES
Unaudited Unaudited Audited 31 March 31 March 30 September 2008 2007 2007 (6 months) (6 months) (12 months) ‚£ ‚£ ‚£ Loss for the period (1,606,480) (1,595,155) (3,118,794) Adjustments for: Investment revenue (4,377) (12,736) (48,708) Finance costs 31,629 26,014 33,369 (Profit)/Loss on disposal of property, (852) 860 6,649plant and equipment
Amortisation of intangible assets 1,922 397
790
Depreciation of property, plant and 41,087 43,839 87,577equipment Employee share based payment 94,141 111,530 134,728 Operating cash flows before movements in (1,442,930) (1,425,251) (2,904,389)working capital Decrease/(Increase) in inventories 79,762 (20,456)
(394,971)
Decrease/(Increase) in receivables 55,778 (128,575) (199,447) Increase in payables 384,734 143,883 197,053 Net cash from operating activities (922,656) (1,430,399) (3,301,754) 6. DIVIDENDS
No dividends are proposed for the six months ended 31 March 2008 (six months ended 31 March 2007: ‚£nil, year ended 30 September 2007: ‚£nil).
7. FIRST TIME ADOPTION OF IFRS
The year ending 30 September 2008 is the first year that the group will presentits consolidated financial statements under IFRS. The last consolidatedfinancial statements under UK GAAP were for the year ended 30 September 2007.The group's date of transition to IFRS was therefore 1 October 2006. Theadoption of IFRS does not affect the cash flows of the group. The disclosuresrequired in the period of transition are given below:
Reconciliation of equity at 31 March 2007
UK GAAP Effect of Restated 31 March transition under IFRS 2007 to IFRS ‚£ ‚£ ‚£ NON-CURRENT ASSETS Intangible assets - 15,184 15,184 Property, plant and equipment 184,001 (15,184) 168,817 184,001 - 184,001 CURRENT ASSETS Inventories 105,581 - 105,581 Trade and other receivables 183,239 - 183,239 Cash and cash equivalents 2,534,795 - 2,534,795 2,823,615 - 2,823,615 TOTAL ASSETS 3,007,616 - 3,007,616 CURRENT LIABILITIES Trade and other payables (1,711,373) - (1,711,373) Obligations under finance leases (29,158) - (29,158) (1,740,531) - (1,740,531) NET CURRENT ASSETS 1,083,084 - 1,083,084 NON-CURRENT LIABILITIES Obligations under finance leases (25,541) - (25,541) TOTAL LIABILITIES (1,766,072) - (1,766,072) NET ASSETS 1,241,544 - 1,241,544 EQUITY Share capital 3,948,709 - 3,948,709 Share premium 5,347,789 - 5,347,789 Share options reserve 277,026 - 277,026 Retained earnings (8,331,980) - (8,331,980) TOTAL EQUITY 1,241,544 - 1,241,544
The adoption of IAS 38 requires computer software to be recognised as an intangible asset. Computer software under UK GAAP was capitalised and recorded as property, plant and equipment.
Reconciliation of equity at 30 September 2007
UK GAAP Effect of Restated 30 September transition under IFRS 2007 to IFRS ‚£ ‚£ ‚£ NON-CURRENT ASSETS Intangible assets - 23,349 23,349 Property, plant and equipment 202,204 (23,349) 178,855 202,204 - 202,204 CURRENT ASSETS Inventories 480,096 - 480,096 Trade and other receivables 267,720 - 267,720 Cash and cash equivalents 626,360 - 626,360 1,374,176 - 1,374,176 TOTAL ASSETS 1,576,380 - 1,576,380 CURRENT LIABILITIES Trade and other payables (1,067,127) - (1,067,127) Obligations under finance leases (37,129) - (37,129) (1,104,256) - (1,104,256) NET CURRENT ASSETS 269,920 - 269,920 NON-CURRENT LIABILITIES Obligations under finance leases (44,736) - (44,736) TOTAL LIABILITIES (1,148,992) - (1,148,992) NET ASSETS 427,388 - 427,388 EQUITY Share capital 4,045,328 - 4,045,328 Share premium 5,937,455 - 5,937,455 Share options reserve 300,224 - 300,224 Retained earnings (9,855,619) - (9,855,619) TOTAL EQUITY 427,388 - 427,388
The adoption of IAS 38 requires computer software to be recognised as an intangible asset. Computer software under UK GAAP was capitalised and recorded as property, plant and equipment.
Reconciliation of equity at 1 October 2006
UK GAAP Effect of Restated 1 October transition under IFRS 2006 to IFRS ‚£ ‚£ ‚£ NON-CURRENT ASSETS Intangible assets - 15,478 15,478 Property, plant and equipment 178,715 (15,478) 163,237 178,715 - 178,715 CURRENT ASSETS Inventories 85,125 - 85,125 Trade and other receivables 59,774 - 59,774 Cash and cash equivalents 919,958 - 919,958 1,064,857 - 1,064,857 TOTAL ASSETS 1,243,572 - 1,243,572 CURRENT LIABILITIES Trade and other payables (1,169,350) - (1,169,350) Obligations under finance leases (25,547) - (25,547) (1,194,897) - (1,194,897) NET CURRENT LIABILITIES (130,040) - (130,040) NON-CURRENT LIABILITIES Trade and other payables (577,342) - (577,342) Obligations under finance leases (15,744) - (15,744) (593,086) - (593,086) TOTAL LIABILITIES (1,787,983) - (1,787,983) NET LIABILITIES (544,411) - (544,411) EQUITY Share capital 3,447,458 - 3,447,458 Share premium 2,579,460 - 2,579,460 Share options reserve 165,496 - 165,496 Retained earnings (6,736,825) - (6,736,825) TOTAL EQUITY (544,411) - (544,411)
The adoption of IAS 38 requires computer software to be recognised as an intangible asset. Computer software under UK GAAP was capitalised and recorded as property, plant and equipment.
Reconciliation of profit for the year ended 30 September 2007 and the six month period ended 31 March 2007
The reclassification of computer software from property, plant and equipment tointangible assets required a corresponding reclassification of the relateddepreciation charge to amortisation. This has no impact on the operating lossrecorded for these periods.
8. DISTRIBUTION OF INTERIM REPORT TO SHAREHOLDERS
The interim report will be available for inspection by the public at theregistered office of the company during normal business hours on any weekdayand from the Company's website www.amteus.com. Further copies are available
onrequest.9. POST BALANCE SHEET EVENTSThe Company raised an additional ‚£1.5 million net of expenses through a placingof 12,000,200 new shares at 15p per share. These shares were admitted totrading on AIM on 30 April 2008. The Company's founder and major shareholder,JC Morris, has been providing financial support to the Company and willcontinue to do so as required.Further enquiries:Amteus plc Tel: 01653 618016 Michael Abrahams (Chairman) John East & Partners Limited Tel: 020 7628 2200 Simon Clements Rawlings Financial Tel: 01653 618016 Catriona Valentine
vendor