Netcall Regulatory News (NET)

6 Feb 2006 07:00

Netcall PLC06 February 2006 6 FEBRUARY 2006 NETCALL PLC ("Netcall" or "the Company") Interim Results for 6 months ended 31st December 2005 Netcall provides telephony solutions, including its innovative flagship productQueueBuster(TM), which enables call centres to manage call queuing, reduce costsand enhance customer service. HIGHLIGHTS Financial • Sales of £1.59 million (H1 FY2005: £1.43 million), representing year-on-year growth of 11.2% • Gross profit of £1.36 million (H1 FY2005: £1.16 million), an increase of 17.3% • Gross margin improved 5% to 86% (H1 FY2005: 81%) • Profit before tax up approximately 200% to £149,100 (H1 FY2005: £50,600) • Cash position of £1.7 million (H1 FY2005: £1.1 million) Operational • Increased sales led by continuing strong growth in the Hosted Service . • Increasing visibility of revenue stream • Launch of enhanced product range and new branding • New customers and repeat orders from customers in the Financial, Telecommunications and Government sectors Ron Elder, Chairman of Netcall, commented: "These results represent another positive step forward in the performance of theCompany. To an extent, much of the progress made is foundation building for thefuture, no more so than in the hosted services side of the business which isshowing real potential. This success and a move towards a more robust businessmodel will serve to enhance the predictability of the revenue stream. Based onthis change and significant market interest, we look forward to a successfuloutcome for the year." CHAIRMAN'S STATEMENT Results We are pleased to report that we have made another positive step forward duringthe first half of the current financial year. This has resulted in animprovement in business fundamentals and, importantly, the fourth consecutivehalf of growing profits which is evidence of the improving health of thebusiness. Of particular note, our hosted service offering has continued to gainmarket traction in the half. This is a great endorsement of the underlyingtechnology and service offering that will underpin our stability and futuregrowth. Turnover for the 6 months ended 31 December 2005 was £1.59 million, compared to£1.43 million in the corresponding period in 2004, an increase of 11.2%. Growthin turnover was to a large degree the result of a significant increase inservices revenue which showed an increase of 112% in comparison with the sameperiod last year and which has grown for the fourth consecutive half year. During this half year the gross margin achieved was similar to that achieved inthe second half of last year. This sustained margin reflects a year on yearmargin improvement of 5% and resulted in gross profits increasing by 17.3% to£1.36m (2004: £1.16m). Operating costs increased by 10.5% reflecting an increased level of investmentin marketing, which included product re-branding, and costs associated with there-organisation of operations. These figures are encouraging and show that we have been able to generateincreased profits from a stable cost base. Accordingly, profits before taxincreased by 195% from £50,000 in H1 FY2005 to £149,000 in the first half ofFY2006. Earnings per share were 0.2p ( FY2005: 0.1p). Our cash position remains strong,with £1.7m of cash as at 31st December 2005 as a result of the cash generativenature of the business. Operational Review QueueBuster The main area of progress in the half was the increase in contribution to salesof the hosted version of QueueBuster. This is due to the addition of newcustomers as well as the requirement from existing customers for increasedcapacity. During the first half we have continued to see significant levels ofinterest in this solution. The significant benefits of using the hosted serviceare such that many new customers are now taking advantage of the flexibilityassociated with this solution. New hosted service customers included those fromthe Financial, Telecommunications and Government sectors. Launch of QueueBuster Version 3 In addition, we launched in the half a new version of our flagship product,QueueBuster, which has a number of enhanced features and functionality, allaimed at helping businesses to roll out a solution that fits their needs whilecontinuing to increase staff productivity and improve customer satisfaction.QueueBuster Version 3 is, we believe, the most advanced solution currentlyavailable both as a hosted service and as a solution installed "in house" at acustomer's premises. QueueBuster Version 3 offers a fully managed system,creating an easy-to-install and low-risk solution for businesses. This enablesbusinesses to choose a solution which best matches their needs. In November, we also launched our Intelligent Communications PlatformTM (ICP)which incorporates a series of enhanced products including Netcall CallMeBack,InTouch and Identifier. They are designed for organisations of any size andprovide flexible ways to boost call handling efficiency as well as improvingcustomer service. Based on run rate revenues from hosted services and the contracted revenuerelating to existing maintenance contracts, we currently have visibility ofapproximately £1.0m for the remainder of the financial year. Expansion of channel sales operation We continue to see the growth in revenues generated through our channels asbeing key to enabling the Company to best leverage its technology. I am pleasedto report that during this half growth in channel generated service revenuescontributed a significant proportion of the overall increase over the secondhalf of last year. Overall sales through our channels represented 24% of thecompanies total revenues. New branding and marketing campaign In conjunction with the expansion of our sales channel operation and thelaunching of new products we have focused resources on the marketing andbranding of our product offerings. The new branding provides much greaterclarity as to the benefits to customers of employing Netcall technology. It isaccompanied by a new corporate and product identity and logos, and currently weare executing a number of marketing related activities to stimulate leadgeneration and sales. Outlook These results represent another positive step forward in the performance of theCompany. To an extent, much of the progress made is foundation building for thefuture, no more so than in the hosted services side of the business which isshowing real potential. This success and a move towards a more robust businessmodel will serve to enhance the predictability of the revenue stream. Based onthis change and significant market interest, we look forward to a successfuloutcome for the year. Ron ElderChairman6 February 2006 NETCALL PLC Consolidated Profit and Loss Account Six Months to Six Months to Year Ended 31st Dec 2005 31st Dec 2004 30th June 2005 £'000 £'000 £'000 Turnover 1,592.7 1,432.0 2,822.1 ----------- ----------- -----------Product 1,053.9 1,178.5 2,172.0Services 538.8 253.5 650.1 ----------- ----------- ----------- Cost of Sales (228.1) (269.4) (469.1) ----------- ----------- -----------Gross profit 1,364.6 1,162.6 2,353.0 Administrative expenses (1249.9) (1,130.8) (2,233.0)Other operating income 10.5 - 7.9 ----------- ----------- ----------- Operating profit beforeInterest 125.2 31.8 127.9Interest receivable 28.9 20.8 44.6Interest payable (5.0) (2.0) (14.4) ----------- ----------- -----------Profit before taxation 149.1 50.6 158.1Taxation - - - ----------- ----------- -----------Net profit 149.1 50.6 158.1 =========== =========== =========== Profit per ordinary share 0.2p 0.1p 0.2p Consolidated Balance Sheet As at As at As at 31st Dec 2005 31st Dec 2004 30th June 2005 £'000 £'000 £'000Fixed AssetsIntangible assets - 26.3 -Tangible assets 189.0 108.5 172.4 --------- --------- ---------- 189.0 134.8 172.4Current assetsStock 18.2 96.0 19.5Debtors due within one year 1,023.9 1,239.3 1,079.3Cash at bank and in hand 1,735.7 1,068.5 1,393.4 --------- --------- ---------- 2,777.8 2,403.8 2,492.2Creditors: amounts falling duewithin one yearTrade creditors 297.4 147.9 128.6Deferred revenue 629.2 663.6 233.1Other creditors includingtaxation 453.5 387.2 856.2and social security --------- --------- ---------- 1,380.1 1,198.7 1,217.9 Net current assets 1,397.7 1,205.1 1,274.3 --------- --------- ----------Total assets less currentLiabilities 1,586.7 1,339.9 1,446.7Creditors: amounts falling dueafter one year 72.5 102.5 87.5 --------- --------- ---------- 1,514.2 1,237.4 1,359.2 ========= ========= ==========Capital and ReservesCalled up share capital 3,289.6 3,275.5 3,285.6Share premium account 15,121.8 15,115.5 15,120.0Special and capital reserves 245.0 245.0 245.0Profit and Loss Account (17,142.2) (17,398.6) (17,291.4) --------- --------- ---------- 1,514.2 1,237.4 1,359.2 ========= ========= ========== Consolidated Cash Flow Six Months to Six Months to Year Ended 31st Dec 2005 31st Dec 2004 30th June 2005 £'000 £'000 £'000Net cash outflow fromoperating activities 388.6 (158.8) 208.1 Returns on investments andservicing of finance 21.9 2.7 30.1 Capital expenditure andfinancial investment (59.1) (17.2) (86.3) --------- --------- ----------Cash outflow before financing 351.4 (173.3) 151.9 Financing (9.2) (15.0) (15.4) --------- --------- ----------Increase/ (Decrease) in cash 342.2 (188.3) 136.5 --------- --------- ---------- Notes 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. The interim financial information has been prepared on the basis of the accounting policies which were applied in preparation of the annual financial statements to 30th June 2005. The results for the six months to 31st December 2004 have been restated to the reporting utilised in the audited results for the year ended 30th June 2005 (b) Statutory accounts in respect of the year to 30th June 2005 have been delivered to the Registrar of Companies and those accounts were subject to an unqualified report by the Auditors. Accounts for the six month period ended 31st December 2004 and 31st December 2005 have not been delivered to the Registrar of Companies. 2. The Board has not declared an interim dividend to shareholders (2004: 0 pence per share). 3. The profit per ordinary share is calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of 65,790,936 ordinary shares in issue during the six months ended 31st December 2005 (31st December 2004: 65,509,270 and 30th June 2005:65,592,187). 4. Administration and other operating expenses includes £48,500 relating to reorganisation costs (31st December 2004: £16,000 and 30th June 2005: £21,160). 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