Netcall Regulatory News (NET)

31 Jan 2005 07:00

Netcall PLC31 January 2005 31 JANUARY 2005 NETCALL PLC ("Netcall" or "the Company") Interim Results for 6 months ended 31 December 2004 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 £1.46 million (H1 2004: £0.67 million), representing year-on-year growth of 118% •Gross profit of £1.20 million (H1 2004: £0.53 million), an increase of 126%. •Gross margin improved 3% to 82% (H1 2004: 79%). •First H1 operating profit of £0.05 million (H1 2004: loss of £0.73 million). •Contracted future revenues of £1.63 million as at 31 December 2004. •Cash position of £1.1 million (H1 2004: £0.2 million). •Operating expenses of £1.15 million reduced by 25% compared with H2 2004. Operational •Hosted Services and maintenance portfolio experiencing continued strong growth. •Increased sales coming through the emerging distribution channel network, which include the first sales following the signing of the BT Global Services agreement. •Gaining traction in the international market. •New QueueBuster product customers signed in the period included RCI, Prudential, with repeat orders from Vertex, R&SA and BT. •New hosted services customers signed in the period include Bourne Leisure, Barclays Bank, Carillion and Freedom Finance. Ron Elder, Chairman of Netcall, commented: "The first half of this year has seen NetCall continue to execute the newopportunities and initiatives identified last year. The new distributionchannels continue to strengthen, as evidenced by the sales generated through thedistribution agreement signed with BT Global Services. The hosted servicesbusiness is generating a strong, consistent and increasing stream of sales,whilst our primary product, QueueBuster, was selected by one of the UK's largestfinancial institutions. These factors, combined with our continued improvementin operating margins, give us confidence in achieving a successful outcome forthe year as a whole." ENQUIRIES Netcall plc (www.netcall.com) Tel. +44(0)1480 495300Ron Elder, ChairmanHenrik Bang, Chief Executive ICIS Tel. +44 (0)20 7651 8688Archie BerensCaroline Evans-Jones Results The first half of the current financial year has seen both an improved financialperformance and encouraging developments in the continued roll out of Netcall'sQueueBuster product and service offering. Turnover for the 6 months ended 31 December 2004 was £1.46 million, compared to£0.67 million in the corresponding period in 2003, an increase of 118 per cent.This is the result of a significant increase in sales of our key QueueBusterproduct. Importantly, an increasing proportion of those sales wereinternational, which underlines the global potential of the product. We also sawan increased level of activity through our channel partners, which accounted for27% of product revenue for the period. Additionally, there was a greater levelof sales of the hosted Services products. There was also an improvement inrevenues earned from the provision of maintenance services as a result of ourexpanded product base. Gross margins improved from 79 per cent. last year to 82 per cent. Accordingly,gross profits increased to £1.20 million, compared to £0.53 million in theequivalent period last year. One of the main focuses of the period was to improve cost controls and we havemade a considerable reduction to overall fixed costs compared to the previoussix months. In addition, we have maintained tight controls on discretionaryspend. We therefore reduced operating expenses by 8 per cent. year-on-year andby 25 per cent. compared with the previous 6 months ended 30 June 2004. This has allowed us to report an operating profit of £47,914 (2003: operatingloss of £0.73 million), ahead of expectations and a reflection of the improvingoverall health of the business. Profit before taxation was £50,626 (2003: lossbefore tax of £726,712) and earnings per share were 0.1p (2003: loss per shareof 1.3p). Our cash position remains strong, with £1.1m of cash as at 31 December 2004. Operational Review QueueBuster A key development in our efforts to roll out our QueueBuster product was theintroduction of the hosted QueueBuster service, which allows organisations toroute calls through Netcall's hosted service, without the need to install theproduct on their own systems. This new offering has proved very attractive to awider span of potential customers, who are attracted by the hosted servicesmodel with its lower investment requirements, and we are pleased to report thatrevenues have been steadily rising each quarter. New customers contracting forthe service include Barclays Bank, Carillion, Freedom Finance and BourneLeisure, the last of which marked the first QueueBuster service sales through anew channel partner. In addition, a number of existing customers have expandedtheir use of the QueueBuster Service. A key component of our strategy has been to develop our indirect sales channelin order to leverage our product and service offering without incurringcommensurate increases in costs associated with the expansion of the directsales operation. The distribution agreement which we signed last year with BThas now started to yield real results: we were delighted that PrudentialAssurance became a customer during the period as a result of this agreement. Afurther sale was made to RCI through our partnership with Eircom. We are therefore encouraged by the early performance of the channel and have putin place a programme designed to increase sales in this area. Other Netcall Products Whilst the majority of our sales are generated by our QueueBuster product andservice offerings, we are now starting to see some renewed traction in themarket for our web call back products. We are working on a number of initiativesto continue the growth of this revenue stream. Outlook The last six months have been very important in improving the predictability ofthe Company's revenue base. Our aim has been to increase the proportion ofrecurring revenues paid to us by our customers. The development of the hostedQueueBuster service and the levels of maintenance revenues earned from a growingcustomer base have significantly contributed in this regard. With a tightercontrol over our costs, we have stabilised the cost base and will selectivelystart investing in the future development of the business. Our aim now is tocontinue the good progress we have made in the first half of the financial year.Through the ongoing build-up of our sales channels and by exploiting the growingawareness of our product and its capabilities we are confident of a favourableoutcome for the current financial year. Ron ElderChairman31 January 2005 NETCALL PLCConsolidated Profit and Loss Account Six Months to Six Months to Year Ended 31st Dec 2004 31st Dec 2003 30th June 2004 £ £ £TURNOVERContinuing operations 1,458,820 666,268 2,414,211 ----------- ----------- ----------- 1,458,820 666,268 2,414,211 Cost of Sales (259,414) (138,487) (471,378) ----------- ----------- -----------GROSS PROFIT 1,199,406 527,781 1,942,833 OPERATING COSTSAdministration and otheroperating expenses (1,151,491) (1,255,014) (2,786,225) OPERATING Profit/(Loss)Continuing operations 47,914 (727,233) (843,392) ----------- ----------- ----------- PROFIT/(LOSS) BEFORE INTEREST 47,914 (727,233) (843,392)Interest receivable 20,843 3,000 18,853Interest payable (18,131) (2,479) (3,392) ----------- ----------- -----------PROFIT/(LOSS) BEFORE TAXATION 50,626 (726,712) (827,931)Taxation - - 32,224 ----------- ----------- -----------NET PROFIT/(LOSS) 50,626 (726,712) (795,707) =========== =========== =========== Profit/(Loss) per ordinaryshare 0.1p (1.3p) (1.3p) NETCALL PLCConsolidated Balance Sheet As at As at As at 31st Dec 2004 31st Dec 2003 30th June 2004 £ £ £ Fixed AssetsIntangible assets 26,311 39,139 -Tangible assets 108,514 146,241 153,268Investments - - --------- --------- ---------- 134,825 185,380 153,268 Current assetsStock 96,027 121,379 130,359Debtors due within one year 1,239,270 522,862 1,033,535Cash and bank and in hand 1,068,543 152,936 1,256,872 --------- --------- ---------- 2,403,840 797,177 2,420,766 Creditors: amounts fallingduewithin one yearTrade creditors 147,880 144,872 209,121Deferred revenue 663,645 523,078 726,040Other creditors includingtaxation 387,278 150,657 334,637and social security --------- --------- ---------- 1,198,803 818,607 1,269,798 Net current assets 1,205,037 (21,430) 1,150,968 --------- --------- ---------- Total assets less currentLiabilities 1,339,862 163,950 1,304,236Creditors: amounts fallingdueafter one year 102,500 - 117,500 --------- --------- ---------- 1,237,362 163,950 1,186,736 ========= ========= ========== Capital and ReservesCalled up share capital 3,275,464 2,836,514 3,275,464Share premium account 15,115,483 14,458,444 15,115,483Special and capital reserves 245,055 245,055 245,055Profit and Loss Account (17,398,640) (17,376,063) (17,449,266) --------- --------- ---------- 1,237,362 163,950 1,186,736 ========= ========= ========== NETCALL PLCConsolidated Cash Flow Six Months to Six Months to Year Ended 31st Dec 2004 31st Dec 2003 30th June 2004 £ £ £ Net cash outflow fromoperating activities (158,772) (88,984) (221,838) Returns on investments andservicing of finance 2,712 521 15,461 Capital expenditure andfinancial investment (17,269) (36,911) (58,066) --------- --------- ----------Cash outflow beforemanagement of liquidresources and financing (173,329) (125,374) (264,443) Management of liquid - - -resources Financing (15,000) - 1,243,005 --------- --------- ----------Increase/ (Decrease) in cash (188,329) (125,374) 978,562 --------- --------- ---------- 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 to30 June 2004. (b) Statutory accounts in respect of the year to 30 June 2004 have beendelivered to the Registrar of Companies and those accounts were subject to anunqualified report by the Auditors. Accounts for the six months periods ended 31December 2003 and 31 December 2004 have not been delivered to the Registrar ofCompanies. 2. The Board has not declared an interim dividend to shareholders (2003: 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 65,509,270 ordinary shares in issue during the six months ended 31 December 2004 (31 December 2003: 56,730,267 and 30 June 2004:60,005,122). 4. Administration and other operating expenses includes £16,000 relating to reorganisation costs (31 December 2003: £nil and 30 June 2004: £65,721). Copies of this interim report are being sent to all shareholders on the Registerof Members on the 31st January. Further copies of the Interim Statement areavailable from the Registered Office of the Company: 10 Harding Way, St. Ives,Cambs. 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