14 May 2012 07:00
14 May 2012
Nasstar plc
Interim results for the six months ended 31 March 2012
Nasstar plc ("Nasstar" or the "Company"), which provides Hosted Desktop cloud computing, announces its results for the six months ended 31 March 2012.
Key highlights for the period:
·; 37% annual increase in Hosted Desktop subscribers to 2,555 (31 March 2011: 1,866 subscribers)
·; New Hosted Desktop subscribers in Q1: 241 (Q1 2011: 120)
·; New Hosted Desktop subscribers in Q2: 314 (Q2 2011: 146)
·; New Hosted Desktop subscribers in April 2012: 150
·; Total Hosted Exchange subscribers at 31 March 2012: 5,931 (31 March 2011: 7,382), increased in April 2012 to 6,073
·; Hosted Desktop now key revenue and growth generator
·; Turnover £1.133m (6 months to 31 March 2011: £1.161m)
·; EBITDA* of £35,000 as a result of planned investment (6 months to 31 March 2011: £151,000)
·; Operating loss of £168,000 (6 months to 31 March 2011: £34,000) and net loss £182,000 (6 months to 31 March 2011: £83,000)
·; £293,000 new capital raised and a strong balance sheet
*Earnings before interest, taxation, depreciation, amortisation and share-based payments
Chairman's Statement
I am pleased to report the results for the Company for the six months ended 31 March 2012. Hosted Desktop is our core product and very much our prime focus going forward. During the period growth in Hosted Desktop has been strong with the addition of 555 new subscribers.
Of particular note is the Hosted Desktop adoption curve which is accelerating. In Q1 (1 October 2011 to 31 December 2011) we added 241 subscribers; in Q2 (1 January 2012 to 31 March 2012) we added 314 new subscribers. To put this growth into perspective, in the full year to September 2011 we added 400 subscribers. Furthermore, we anticipate this growth momentum to continue, and over 150 new subscribers were added to the platform in April 2012.
In anticipation of the growth, based on our sales pipeline, we decided during the period to gear up the business to be able to deliver a much higher capacity. The focus has therefore been on positioning the Company for growth rather than short-term profitability. We believe the additional costs incurred were essential for us to create a larger and more competitive company in the medium to long term. To this end, we have recruited additional key staff, implemented a new back-up solution and taken delivery of new EMC storage devices.
As a result of these improvements we now have the capacity to accommodate approximately double our existing number of subscribers without increasing the costs of the London data centre, storage and back-up.
We view our key driver for growth to be Hosted Desktop subscriptions because through Nasstar's "App Portal" - Nasstar's own intellectual property - partners and customers can deliver a wide variety of apps from multiple software vendors. By offering so many different apps we believe our service cannot be commoditised easily by any single software vendor, such as Microsoft.
In analysing our revenue for the period, Hosted Desktop accounted for almost two-thirds, up from just over fifty per cent last year, reflecting Hosted Desktop's importance as our core product. We began developing Nasstar Hosted Desktop in 2004, the same year in which we launched Hosted Microsoft Exchange. Hosted Exchange was our revenue generator whilst we developed the Hosted Desktop platform. Our strategy has always been to create a service based on our own proprietary platform.
In the year to September 2011 we saw a fall in Hosted Exchange revenues, primarily as a result of customer loss through M&A or through corporate failure. Although the period saw a further reduction in Hosted Exchange subscribers we are now migrating customers to Hosted Exchange 2010 and subscriptions grew again in April 2012. As Hosted Desktop sales grow we also expect that Hosted Exchange revenue will grow again in the second half of the year.
During the period, £293,000 new capital was raised from a new institutional shareholder. The proceeds of the subscription have strengthened the Company's balance sheet and are assisting the Company in implementing its growth strategy.
Outlook
We are very encouraged by the increasing adoption rate of Hosted Desktop. The work undertaken over the past few years developing a market leading Hosted Desktop service, combined with the investment made during recent months in hardware, software and staffing, put us in the perfect position to deliver medium- to long-term growth and profitability. We expect the increased sales to show an improved financial performance in the second half of the year.
Lord Daresbury
Chairman
14 May 2012
Contacts:
Nasstar plc | |
Charles Black, Chief Executive Officer
| 020 7148 5000 |
Allenby Capital Limited, Nominated Adviser and Broker | |
Nick Naylor James Reeve | 020 3328 5656
|
Gresham PR Limited Neil Boom | 07866 805 108 |
About Nasstar plc
Nasstar (www.nasstar.com) provides hosted desktop and hosted exchange cloud computing services that enable subscribers to access their corporate desktop, files, applications and email in the cloud rather than using local hard drives. Hosted Desktop is a highly scalable service that provides benefits including anywhere access to computing, a standardised corporate desktop solution that can be accessed globally and in multiple languages and cost savings when compared to the traditional IT ownership model, replacing capital expenditure with a simple usage based payment model.
Nasstar was founded in 1998 by Charles Black. Nasstar plc was admitted to trading on the London Stock Exchange's Alternative Investment Market in December 2005 (AIM: NASA).
Nasstar plc
Consolidated statement of comprehensive income
for the six months ended 31 March 2012
Note | Six months to 31 March 2012 Unaudited £000
| Six months to 31 March 2011 Unaudited £000 | Year to 30 September 2011Audited £000 | |||
Revenue | 1,133 | 1,161 | 2,257 | |||
Cost of sales | (513) | (514) | (1,001) | |||
Gross profit | 620 | 647 | 1,256 | |||
Operating and administrative expenses | (770) | (670) | (1,268) | |||
Share-based payments | (18) | (11) | (38) | |||
Total operating and administrative expenses |
(788) |
(681) |
(1,306) | |||
Operating loss | (168) | (34) | (50) | |||
Finance expense | (20) | (49) | (92) | |||
Finance income | 6 | - | 2 | |||
Loss before taxation | (182) | (83) | (140) | |||
Taxation | - | - | 29 | |||
Loss for the period attributable to shareholders |
(182) |
(83) |
(111) | |||
Loss per share: | ||||||
Basic and diluted | 5 | (0.3)p | (0.2)p | (0.3)p | ||
Nasstar plc
Statement of financial position
as at 31 March 2012
| 31 March 2012 Unaudited £000
| 31 March 2011 Unaudited £000 | 30 September 2011 Audited£000 | |||
Assets | ||||||
Non-current assets | ||||||
Goodwill | 844 | 844 | 844 | |||
Intangible assets | 316 | 241 | 281 | |||
Plant and equipment | 378 | 224 | 253 | |||
Deferred taxation | 175 | 159 | 175 | |||
1,713 | 1,468 | 1,553 | ||||
Current assets | ||||||
Trade and other receivables | 464
| 424 | 444 | |||
Cash and cash equivalents | 709 | 5 | 814 | |||
1,173 | 429 | 1,258 | ||||
Total assets | 2,886 | 1,897 | 2,811 | |||
Equity and liabilities | ||||||
Capital and reserves attributable to equity holders | ||||||
Share capital | 537 | 357 | 507 | |||
Share premium | 3,952 | 2,706 | 3,689 | |||
Merger reserve | 662 | 662 | 662 | |||
Retained deficit | (2,712) | (2,548) | (2,548) | |||
Total equity | 2,439 | 1,177 | 2,310 | |||
Non-current liabilities | ||||||
Interest-bearing loans and borrowings | 41 | 99 | 43 | |||
Current liabilities | ||||||
Interest-bearing loans and borrowings | 50 | 99 | 94 | |||
Trade and other payables | 356 | 522 | 364 | |||
406 | 621 | 458 | ||||
Total equity and liabilities | 2,886 | 1,897 | 2,811 | |||
Nasstar plc
Statement of cash flows
for the six months ended 31 March 2012
Six months to 31 March 2012 Unaudited £000 | Six months to 31 March 2011 Unaudited £000 | Year to 30 September 2011Audited £000 | |||
Cash flow from operating activities | |||||
Operating loss before taxation | (168) | (34) | (50) | ||
Adjustments for: | |||||
Depreciation and amortisation | 185 | 174 | 348 | ||
Share-based payments | 18 | 11 | 38 | ||
Corporation tax receipts | - | 16 | 29 | ||
Net cash flow from operating activities before changes in working capital | 35 | 167 | 365 | ||
(Increase)/decrease in trade and other receivables | (20) | 36 | 16 | ||
(Decrease)/increase in trade and other payables | (8) | 30 | (128) | ||
Net cash flow from operating activities | 7 | 233 | 253 | ||
Investing activities | |||||
Payments for intangible assets | (127) | (84) | (204) | ||
Payments for property, plant and equipment | (218) | (43) | (165) | ||
Net cash flow from investing activities | (345) | (127) | (369) | ||
Financing activities | |||||
Issue of ordinary share capital | 293 | - | 1,200 | ||
Expenses of issue of ordinary shares | - | - | (67) | ||
Proceeds from lease-finance arrangements | - | 21 | 21 | ||
Repayment of lease-finance arrangements | (28) | (63) | (107) | ||
Repayment of bank loan | (18) | (15) | (32) | ||
Interest paid | (20) | (49) | (92) | ||
Interest received | 6 | - | 2 | ||
Net cash flow from financing activities | 233 | (106) | 925 | ||
Net (decrease)/increase in cash and cash equivalents in the period | (105) | - | 809 | ||
Cash and cash equivalents at the beginning of the period | 814 | 5 | 5 | ||
Cash and cash equivalents at the end of the period | 709 | 5 | 814 | ||
NOTES TO THE INTERIM REPORT
1 | Corporate information | |||||
Nasstar Plc ("the Company") is a company incorporated in England and Wales and quoted on the London Stock Exchange's Alternative Investment Market. | ||||||
2 | Basis of preparation | |||||
These condensed interim financial statements of the Company and its subsidiaries ("the Group") for the six months ended 31 March 2012 have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRSs). The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest audited financial statements for the year ended 30 September 2011. While the financial figures included within this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as set out in IAS34. | ||||||
These condensed interim financial statements do not constitute Statutory Accounts under the Companies Act 2006, have not been audited, and do not include all of the information required for full annual financial statements. They should be read in conjunction with the Group's consolidated annual financial statements for the year ended 30 September 2011. The auditors' opinion on those Statutory Accounts was unqualified and did not draw attention to any other matters required by the Companies Act 2006. The Statutory Accounts for the year ended 30 September 2011 have been delivered to the Registrar of Companies. | ||||||
The comparative figures presented are for the six months ended 31 March 2011 and the year ended 30 September 2011. | ||||||
3 | Total comprehensive income | |||||
There are no additional items of income and expense which are not included within the statement of comprehensive income. | ||||||
4 | Segmental analysis | |||||
A segment is a distinguishable component of the Group that is engaged in providing products or services in a particular business sector (business segment) or in providing products or services in a particular economic environment (geographic segment), which is subject to risks and rewards that are different in those other segments. | ||||||
The Group operated in the period in one segment, the provision of software as a service, and in one market, the United Kingdom. The disclosures required by IFRS8 relating to profits, losses, assets and liabilities of the segment are therefore shown by the financial statements as a whole. | ||||||
The Group had thirty-three overseas customers in the period. | ||||||
5 | Loss per share | |||||
The calculation of the basic loss per share for the six months ended 31 March 2012 is based upon the following: | ||||||
Six months to 31 March 2012 Unaudited
| Six months to31 March 2011 Unaudited
| Year to 30 September 2011Audited
| ||||
Weighted average number of shares in issue | 52,172,648 | 35,733,224 | 40,212,676 | |||
Loss attributable to shareholders of the parent | £182,000 | £83,000 | £111,000 | |||
Loss per 1p ordinary share | (0.3p) | (0.2p) | (0.3)p | |||
The diluted loss per share for all periods is the same as the basic loss per share as the losses have an anti-dilutive effect. | ||||||
6 | Dividend | |||||
No dividend has been paid or proposed in the period.
| ||||||