Netcall Regulatory News (NET)

6 Feb 2007 07:01

Netcall PLC06 February 2007 NETCALL PLC ("Netcall" or "the Company") Interim Results for 6 months ended 31st December 2006 Netcall plc (NET), a leading provider of call-back auto messaging and contactsolutions today announces interim results for the six months ended 31 December2006. HIGHLIGHTS Financial • Sales of £2.0 million (H1 FY2006 : £1.59 million), representing year-on-year growth of 26% • Gross profit of £1.74 million (H1 FY2006: £1.36 million), an increase of 28% • Profit before tax up by 192% to £375,100 (H1 FY2006: £128,300) • 6th consecutive half year growth in profits • Cash position of £2.0 million (H1 FY2006: £1.7 million) Operational • Continued focus on hosted services results in 6th consecutive six month period of growth in this area of the business, providing the Group with more consistent and visible earnings • Continued expansion of distribution channels which now contributes 41% of revenues Ron Elder, Chairman of Netcall, commented: "Today's results represent another successful period for Netcall and are a realendorsement of the implementation of a focused growth strategy. The Company hascontinued to develop and enhance its market position and product offering andmoved further towards a hosted services business model, all of which has had apositive effect on profits. The combination of an enhanced channel distributionnetwork and greater revenue visibility gives me confidence in a successfuloutcome for the year reflecting continued growth." ENQUIRIES Netcall plc (www.netcall.com) Tel. +44(0)1480 495300Ron Elder, ChairmanHenrik Bang, Chief Executive ICIS Tel. +44 (0)20 7651 8688Tom MoriartyLaura Cocker CHAIRMAN'S STATEMENT Results I am pleased to report that we have continued to make significant progressduring the first half of the current financial year with profits growing for thesixth consecutive half. This growth is a result of an increasing demand for ourinnovative technology and service offering, combined with a focused businessdevelopment strategy and underpinned by a robust business model. Turnover for the six months ended 31 December 2006 increased by 26% to £2.0million compared to £1.59 million from the same period in 2005. The increase hasbeen largely influenced by service revenues which continue to make a significantcontribution to turnover, having increased by 69%. It also represents the sixthconsecutive sixth-month period of hosted services growth. The gross margin for the period increased slightly compared to that of theequivalent period in 2005. This, combined with the growth in revenues, hasresulted in an increase in gross profits of 28% compared to the same period in2005. We have maintained firm control of operating costs and as a result these haveincreased by only 9% compared to the same period in 2005. Following the adoption of FRS 20, in line with current reporting standards, theCompany has changed its accounting policy with respect to equity-settledshare-based payments provided to employees under the Company's share optionplan. This has resulted in an exceptional charge of £53,900 in the period and aprior year adjustment. The comparators have been restated to reflect this as setout in note 4 of the Interim Statement. The excellent performance in sales coupled with maintaining a keen eye on costshas generated a very encouraging increase of 192% in profit before tax to£375,100 compared with £128,300 for the same period last year. This sixthconsecutive half year period of growth not only shows the strength of thebusiness model and but also emphasises the potential of the business to generatesignificant returns in the future. This is further underpinned by increasedrevenue visibility. Earnings per share were 0.6p (H1 FY2006: 0.2p). Our cash position remains strongwith £2.0m of cash as at 31 December 2006 as a result of the cash generativenature of the business. Operational Review Growth of QueueBusterQueueBuster, our flagship product, enables customers in a call centre queue tochoose the option of receiving a return call without losing their place in thequeue. Our product roadmap, which in due course will enhance our productoffering includes interactive messaging and call routing solutions. Hosted Services GrowthHosted services continue to grow in popularity with service revenue customersnow contributing 45% to total revenues, in the same period last year theyrepresented 34%. This is the sixth consecutive six month period of growth. Theincrease in average revenue per customer and growth in number of customers usingthe hosted service offering has contributed to this upward trend. Expansion of Channel PartnershipsAs part of our business growth strategy we have continued to increase theproportion of revenues derived from channel partnerships, which now contributes41% to total revenues compared to 24% in 2005. This represents a growth inrevenues generated through our partnerships of 93% over the same period lastyear. In October 2006 we announced that we had joined the AvayaDeveloperConnection program, which involves the promotion and co-marketing ofNetcall's products. In November 2006 we also announced a strategic OEMpartnership agreement with Affiniti, which offers QueueBuster as a hostedservice under the Affiniti OpenQueue brand. OutlookToday's results represent another successful period for Netcall and are a realendorsement of the implementation of a focused growth strategy. The Company hascontinued to develop and enhance its market position and product offering andmoved further towards a hosted services business model, all of which has had apositive effect on profits. The combination of an enhanced channel distributionnetwork and greater revenue visibility gives me confidence in a successfuloutcome for the year reflecting continued growth. Ron ElderChairman6 February 2007 NETCALL PLCConsolidated Profit and Loss Account Six Months to Six Months to Year Ended 31st Dec 2006 31st Dec 2005 30th June 2006 Unaudited Unaudited Audited as restated as restated see note 4 see note 4 £'000 £'000 £'000 Turnover 2006.5 1,592.7 3,134.5 ----------- ----------- -----------Product 1,097.1 1,053.9 1807.7Services 909.4 538.8 1326.8 ----------- ----------- ----------- Cost of Sales (265.0) (228.1) (449.9) ----------- ----------- -----------Gross profit 1,741.5 1,364.6 2,684.6 ----------- ----------- ----------- Administrative expensesFRS 20 Share option charges (53.9) (20.8) (65.5)Other (1350.1) (1,239.4) (2,317.0) ----------- ----------- ----------- (1404.0). (1,260.2) (2,382.5) ----------- ----------- ----------- Operating profit 337.5 104.4 302.1Interest receivable 41.2 28.9 63.6Interest payable (3.6) (5.0) (9.4) ----------- ----------- -----------Profit before taxation 375.1 128.3 356.3Taxation - - - ----------- ----------- -----------Net profit 375.1 128.3 356.3 =========== =========== =========== ----------- ----------- -----------Net profit before interestand share option charges 391.4 104.4 367.6Net profit before shareoption charges 429.0 149.1 421.8 ----------- ----------- ----------- Profit per ordinary share 0.6p 0.2p 0.5p NETCALL PLCConsolidated Balance Sheet As at As at As at 31st Dec 2006 31st Dec 2005 30th June 2006 Unaudited Unaudited Audited as restated see as restated see note 4 note 4 £'000 £'000 £'000Fixed AssetsIntangible assets - - -Tangible assets 159.6 189.0 154.3 --------- --------- ---------- 159.6 189.0 154.3Current assetsStock 45.9 18.2 62.2Debtors due within one year 1,443.8 1,023.9 1052.5Cash at bank and in hand 2,001.0 1,735.7 1819.5 --------- --------- ---------- 3,490.7 2,777.8 2934.2 Creditors: amounts falling duewithin one yearTrade creditors 157.9 297.4 306.1Accruals and deferred revenue 981.3 878.8 766.4Other creditors including 237.7 203.9 160.6taxation and social security --------- --------- ---------- 1,376.9 1,380.1 1,233.1 Net current assets 2,113.8 1,397.7 1,701.1 --------- --------- ----------Total assets less currentLiabilities 2,273.4 1,586.7 1,855.4Creditors: amounts falling dueafter one year 42.5 72.5 57.5 --------- --------- ---------- 2,230.9 1,514.2 1,797.9 ========= ========= ==========Capital and ReservesCalled up share capital 3,299.9 3,289.6 3,297.1Share premium account 15,126.4 15,121.7 15,125.2Special and capital reserves 245.1 245.1 245.1Employee share schemes reserve 213.4 114.8 159.5Profit and Loss Account (16,653.9) (17,257.0) (17,029.0) --------- --------- ---------- 2230.9 1,514.2 1797.9 ========= ========= ========== Consolidated Cash Flow Six Months to Six Months to Year Ended 31st Dec 2006 31st Dec 2005 30th June 2006 £'000 £'000 £'000 Net cash inflow from operating activities 197.7 388.6 468.7 Returns on investments and servicing of finance 37.6 21.9 54.2 Capital expenditure and financial investment (42.8) (59.1) (83.6) --------- --------- ----------Cash inflow before financing 192.5 351.4 439.3 Financing (11.0) (9.2) (13.2) --------- --------- ----------Increase in cash 181.5 342.2 426.1 --------- --------- ---------- NETCALL PLCNotes to the Interim Statement 1. For the purposes of Section 240 of the Companies Act 1985: (a) This Interim report does not constitute a set of statutory accounts. Theinterim financial information has been prepared on the basis of the accountingpolicies which were applied in preparation of the annual financial statements to30th June 2006. with the exception of the accounting for share options. FRS 20"Share Based Payments" is applicable for the first time and has a prior yearimpact which is detailed in note 4. (b) Statutory accounts in respect of the year to 30th June 2006 have beendelivered to the Registrar of Companies and those accounts were subject to anunqualified report by the Auditors. Accounts for the six month period ended 31stDecember 2006 and 31st December 2005 have not been audited nor delivered to theRegistrar of Companies. 2.Interim Dividend The Board has not declared an interim dividend to shareholders (2005: 0 penceper share). 3.Profit per Share The profit per ordinary share is calculated by dividing the net profit for theperiod attributable to ordinary shareholders by the weighted average number of65,996,699 ordinary shares in issue during the six months ended 31st December2005 (31st December 2005: 65,790,936 and 30th June 2006: 65,813,224). 4.Implementation of FRS 20 "Share-based payment" Accounting Policy ChangeThe Group has applied the requirements of FRS 20 "Share-Based Payments". Inaccordance with the transitional provisions, FRS 20 has been applied to allgrants of equity instruments after 7 November 2002 that were unvested as of 1July 2005 The Group issues equity-settled share-based payments to certain employees anddirectors. Equity-settled share-based payments are measured at fair value at thedate of grant. The fair value determined at the grant date of the equity-settledshare-based payments is expensed on a straight-line basis over the vestingperiod, based on the group's estimate of shares that will eventually vest. Fair value is measured by use of a Black-Scholes model. The expected life usedin the model has been adjusted, based on management's best estimate, for theeffects of non-transferability, exercise restrictions, and behaviouralconsiderations. A liability equal to the portion of the goods or services received is recognisedat the current fair value determined at each balance sheet date for cash-settledshare-based payments Impact of restatement The impact of implementing FRS 20 "Share-Based Payments" on the comparativefinancial statements is set out below. Profit and Loss Account Six Months to YearEnded 31st Dec 2005 30th June 2006 £'000 £'000 Administrative expenses as previously stated 1,249.9 2,357.9Other operating income (10.5) (11.0)Share-based payment additional charge 20.8 35.6 Administrative expenses as restated 1,260.2 2,382.5 Share- based charges 20.8 65.5Other 1,239.4 2,317.0 Profit per share - basic and diluted (pence) as previously stated 0.2 0.6Share-based payment charge - 0.1 ---------- ----------Profit per share - basic and diluted (pence) as restated 0.2 0.5 Balance Sheet As at 31st Dec As at 30th June 2005 2006 £,000 £'000 Profit and Loss account as previously stated (17,142.2) (16,899.4)Share-based payment additional charge (114.8) (129.6) ---------- ----------Profit and Loss account as restated (17,257.0) (17,029.0) ---------- ---------- Share option reserve aspreviously stated 0.0 29.9Share-based payment additional charge 20.8 35.6Share-based payment prior year adjustment 94.0 94.0 ---------- ----------Share option reserve as restated 114.8 159.5 Copies of this interim report are being sent to all shareholders on the Registerof Members on the 6th February. Further copies of the Interim Statement areavailable from the Registered Office of the Company: 10 Harding Way, St. Ives,Cambridgeshire, PE27 3WR and from the Company's web site: www.netcall.com This information is provided by RNS The company news service from the London Stock Exchange