Ingenta Regulatory News (ING)

4 Aug 2005 07:00

Ingenta PLC04 August 2005 Date: Embargoed until 07.00am, Thursday 4 August 2005 Contacts: Ingenta Martyn Rose, Non-Executive Chairman Simon Dessain, Chief Executive Tel: 01865 799000 Website: www.ingenta.com Hudson Sandler Alistair Mackinnon-Musson Philip Dennis Tel: 020 7796 4133 Email: ingenta@hspr.co.uk Ingenta plc INTERIM RESULTS Ingenta plc, the technology and services provider to the publishing andinformation industries, is pleased to announce its Interim results for the sixmonths to 30 June 2005. The key points are: • Turnover up 6.5% against same period 2004 • Article 'pay per view' revenue increased by 14% • Further sales based on Ingenta's new Information Commerce System (ICS) announced • Loss for the financial period substantially reduced to £(0.3) million (2004: loss £(1.3) million) • 24% reduction in overheads against same period last year • Since December 2004 the monthly payroll costs are down 24% • Substantial progress towards profitability made during the period Commenting, Simon Dessain, Chief Executive, said: "Ingenta remains highly focussed on our goal of delivering a profit for theyear. Substantial progress towards this aim was made during the first half ". "During the first six months we completed a programme of cost reductions and areorganisation. As a result we are poised to achieve profitability, based upona continued modest upward trend in revenue". Ingenta plc UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 Financial Review Ingenta made substantial progress towards profitability in the six months to 30June 2005. The group achieved a 6.5% increase in turnover during the period to £3.3million, compared to the first half of last year (2004: £3.1 million). Profitmargins of 76% (2004: 77%) were adversely affected, albeit only slightly, as aresult of increased (lower margin) 'pay per view' revenues as a proportion oftotal revenue. A £0.9 million reduction in overheads to £2.9 million in thefirst half (2004: £3.8 million) when combined with the overall increase in groupturnover resulted in substantially reduced losses for the period of £(0.3)million (2004: loss £(1.3) million). The group had cash resources of £0.3 million at 30 June 2005 (31 December 2004:£0.9 million). Creditors of £3.6 million at the period end were reduced by £1.3million over the first six months, with other balance sheet items generallyshowing no more than expected seasonal movements. The group operates in highly competitive markets but has demonstrated that itsinvestments in technology to automate processes have enabled it to deliverimproving contributions at ever lower cost. The introduction of new products isalso providing the group with competitive advantage. Trading during the first half of the financial year has delivered encouragingresults from all three operating divisions, as described below, together with asummary of the activities in each of the operating groups: 1) IngentaConnect IngentaConnect represents 56% of group revenues (2004: 59% - 15 month period)and over 8,000 publications are now available via IngentaConnect. Usage of the IngentaConnect platform, for accessing online subscription content,continues to increase rapidly - with monthly peak user sessions during theperiod being up 40% over the 2004 peak. Ingenta added titles from 21 newpublishers during the period, including increasing the number available fromSpringer to over 1,000. Ingenta has also funded a research project through the American LibraryAssociation in recognition of the importance of the North American market. The gross margin on document delivery increased during the first half, as wellas showing a 14% rise in revenues. The combination of these two factors resultsin an improved contribution for Ingenta, as well as increases in royaltiespayable to publishers. Whilst the market for online delivery remains competitive, IngentaConnect candeliver profitably at increasingly low costs. 2) Information Commerce Systems (ICS) and Publication Websites Revenues from the ICS and Publication Websites unit represent 29% of groupturnover (2004: 28% - 15 month period). This unit provides technology, services and software to academic, research andprofessional publishers for the websites of specialist publications. At theheart is Ingenta's core competence of enabling easy to use, large scale,subscription access, rights management and e-commerce skills, both within thepublication websites Ingenta builds and operates and as external software sales. The publication website for the British Standards Institute (as previouslyannounced) went into live production during the period. Additionally, the earlydelivery phases of the Institute of Physics Publishing project - of the unit'snew Information Commerce Systems (ICS) - have been completed. Furthermore,UNESCO has become a new client and the OECD has signed a new long term agreement- both are for ICS enabled publication websites. These activities show the first signs of a financial return on the substantialinvestment that Ingenta has made and continues to make into ICS technologies.These investments are enabling sales of high functionality software andpublication websites at a lower cost of sale. 3) Publisher Communications Group Ingenta's Publisher Communication Group (PCG) continues to enhance itsreputation as a high quality provider of marketing, sales and research servicesto academic publishers. During the period the unit worked with 6 new publishersand further expanded its European presence as a result of increased demand. PCGrepresents 15% of group revenue (2004: 13% - 15 month period). Operations and Staff As outlined above and in the 2004 Annual Report, Ingenta now comprises threeprincipal activities. During the period the group created three business unitsaround these activities. This structure enables the management of each unit tofocus on their own specific objectives and will allow each to develop in moreindependent ways, as befits their differing business models and individualstages of development. Overall, group staff numbers were down to 98 at 30 June 2005 from 114 at 31December 2004. Despite these further reductions in staffing, Ingenta isdelivering more publication content, user sessions and services on behalf of ourpublisher clients. The contribution of Ingenta's staff during the period hasbeen magnificent and the Board would like to thank all of them for theircontinuing hard work. Current Trading and Prospects Results for the second half of the current financial year will receive somebenefit from orders taken during the first six months, however, a modest numberof further new sales will be required during the second half in order to ensurethe company's goals for the year are achieved. A recent review of the new business forecast for the second half, together withthe benefit of further cost reductions as a result of actions already taken,supports the Board's current business plan and forecast. This enables Ingentato maintain its expectation of further trading improvements in the second half. UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 Ingenta plcConsolidated Profit and Loss Accountfor the 6 months ended 30 June 2005 6 months ended 6 months ended 15 months ended 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £'m £'m £'mTurnover 3.3 3.1 8.8Cost of sales (0.8) (0.7) (2.3) Gross profit 2.5 2.4 6.5 Overheads (2.9) (3.8) (9.5) Exceptional items - (0.7) Operating loss and loss before tax (0.4) (1.4) (3.7)Tax 0.1 0.1 0.4 Loss for the financial period (0.3) (1.3) (3.3) Basic and diluted loss per share (0.2)p (1.0)p (2.5)p Ingenta plcConsolidated Balance Sheetas at 30 June 2005 As at As at As at 30 June 30 June 31 December 2005 2004 2004 (unaudited) (unaudited) (audited) £'m £'m £'mFixed assetsTangible assets 0.3 0.7 0.4Investments 0.2 0.2 0.2 0.5 0.9 0.6 Current assetsDebtors 1.6 2.3 2.7Cash at bank and in hand 0.3 0.1 0.9 1.9 2.4 3.6Creditors: amounts falling due within one year (3.6) (4.7) (4.9)Net current liabilities (1.7) (2.3) (1.3) Total assets less current liabilities (1.2) (1.4) (0.7) Creditors: amounts falling due after more than one year - (0.2) -Provisions for liabilities and charges (0.3) (0.6) (0.5)Net liabilities (1.5) (2.2) (1.2) Capital and reservesCalled up share capital 7.5 6.7 7.5Share premium account 21.0 19.8 21.0Merger reserve 11.0 11.0 11.0Reverse acquisition reserve 12.7 12.7 12.7Profit and loss account (53.7) (52.4) (53.4) Equity shareholders' deficit (1.5) (2.2) (1.2) Ingenta plcConsolidated Cash Flow Statement6 months ended 30 June 2005 6 months ended 6 months ended 15 months ended 30 June 30 June 31 December 2004 2005 2004 (unaudited) (unaudited) (audited) £'m £'m £'mCash flow from continuing operating activitiesLoss before tax (0.4) (1.4) (3.7)Depreciation charge 0.1 0.3 0.7 (Increase) / decrease in debtors 0.7 0.8 (0.2)Increase/(decrease) in creditors (1.3) (1.9) (0.6)Increase/(decrease) in provisions (0.2) (0.2) (0.1) Net cash outflow from operating activities (1.1) (2.4) (3.9) Tax received 0.5 0.3 0.3Capital expenditure and financial investmentsPurchase of tangible fixed assets - (0.1) (0.1) Management of liquid resourcesSale/(purchase) of short term deposits 0.7 - (0.7) Net cash inflow/(outflow) before financing 0.1 (2.2) (4.4) FinancingIssue of shares net of expenses - 3.0 5.0Repayment of principal under finance leases - - (0.1)Net cash inflow from financing - 3.0 4.9 Increase in cash in the period 0.1 0.8 0.5 Analysis of net fundsCash in hand and at bank 0.3 0.1 0.2 Cash on short term deposit - - 0.7 0.3 0.1 0.9 Statement of consolidated total recognised gains and lossesfor the six months ended 30 June 2005 6 months ended 6 months ended 15 months ended 30 June 30 June 31 December 2004 2005 2004 (unaudited) (unaudited) (audited) £'m £'m £'mLoss for the financial period (0.3) (1.3) (3.3)Currency translation differences on foreign currency - 0.1 0.2net investmentsTotal recognised losses for the period (0.3) (1.2) (3.1) Ingenta plcNotes to the Unaudited Interim Reportfor the six months ended 30 June 2005 1. Basis of preparation The Interim Financial Information has been prepared on the basis of theaccounting policies set out in the Group's Annual Report and Accounts for the 15months ended 31 December 2004 which have remained unchanged. 2. Publication of Non-Statutory Accounts The financial information contained in this interim report is unaudited and hasnot been reviewed by the auditors. It does not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. Statutory accounts for the 15months ended 31 December 2004 incorporating an unqualified audit report havebeen filed with the Registrar of Companies. 3. Basis of EPS Calculation The basic loss per share has been calculated by dividing the loss for the periodby the weighted number of ordinary shares of 186,207,420 (6 months to 30 June2004: 121,557,264; 15 months ended 31 December 2004: 130,244,269) in issueduring the 6 month period ended 30 June 2005. The company had no dilutiveordinary shares in issue in any of the periods and there is therefore nodifference between the loss per ordinary share and the diluted loss per ordinaryshare. There was no change in the number of shares in issue during the period. 4. Comparative period Last year's Interim results were in respect of the six months to 31 March 2004,which was for the first six months of an extended reporting period of 15 months(to 31 December 2004). In order to report performance consistently andappropriately, the comparative figures used in this report are for the six monthperiod ending 30 June 2004. The results for that period have been prepared onthe same basis and under the same accounting policies as those set out in theGroup's Annual Report and Accounts for the 15 months ended 31 December 2004. 5. Copies of Announcement Copies of this announcement will be available on the investors section of thecompany's website: http://www.ingenta.com/corporate/company/investors/finan_ann/or from the company's registered office at 23-38 Hythe Bridge Street, OxfordOX1 2ET. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange