Last checked at 13 Feb 2009 07:00
IPPlus PLC
INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
Highlights
| 6 months ended 31 December 2008 (unaudited) | 6 months ended 31 December 2007 (unaudited) | 12 months ended 30 June 2008 (audited) | |
| £ | £ | £ | |
| Revenue | 1,935,839 | 1,805,123 | 3,947,385 |
| (Loss)/profit before taxation | (64,936) | 138,019 | 392,202 |
Group name changed to IPPlus PLC on 29th September 2008
Turnover up by 7% on corresponding prior year period
Measures in place to reduce overheads and return Group to profitability
Closing cash at 31st December 2008 of £239,273
Chairman's statement
Financial Summary
In the six months to December 2008 the Group suffered a loss before taxation of £64,936 (December 2007: profit of £138,019), on a slightly increased turnover of £1,935,839 (December 2007: £1,805,123).
The Group cash position at the 31st December 2008 amounted to £239,273, a reduction in the period of £70,241, the major expenditure being the further payment of £64,461 for the new telephone switch. This cash balance has been strengthened by the arrangement of a £100,000 overdraft facility with NatWest Bank PLC.
On the strength of the previous year's performance the Board actioned an expansion programme. The cost of new staff, coupled to the annual pay review carried out in June, substantially increased our monthly overheads whilst expected revenue increases slowly dipped as the recession started to bite. This adverse impact on profitability was further aggravated by both the expected seasonal rise in call volumes during October and November failing to materialise and the pressure the credit crunch placed on donations to the charity sector which historically provides sizeable traffic and revenue running up to Christmas.
Against this background, the Board implemented a cost reduction review to ensure that the company was well placed to progress in both the current climate and when the economy starts to turn around. The first act was to down-size the newly expanded sales team and salaried staff were then asked to consider taking voluntary salary cuts to safeguard the existing team. The entire staff were aware of daily news reports of the struggles of other well known companies and appreciated that immediate action was required to stabilise our position and prevent further headcount reductions. As such these proposals were accepted as a preferred course of action. The new reduced salary levels, with Directors and senior executives suffering the largest cuts, became effective from 1st January 2009, and should return the business to a stable footing.
Change of Name
The Board decided to rename the Company to better reflect the various component divisions and at the AGM on 29th September 2009 it was agreed to rename the business as IPPlus PLC.
Business Summary
IPPlus PLC operates through two principal subsidiaries, IPPlus (UK) Limited and CallScripter Limited.
The Group trades under three main trading names: CallScripter, Ansaback and IP3 Telecom.
CallScripter is an enhanced customer interaction software suite specifically developed for contact centres, telesales and telemarketing operations. Our clients gain major benefits by introducing CallScripter's dynamic scripting environment into their organisation. The software facilitates the rapid set-up, handling and reporting of sophisticated inbound, outbound and e-mail campaigns.
Ansaback is a 24 hours a day, 7 days a week bureau telephony service providing overflow and out of hours call handling, emergency cover, dedicated phone resources, non-geographic, low call and Freephone telephone facilities as well as disaster recovery lines and other ancillary telecommunication services.
IP3 Telecom is the telephony services arm of the Ansaback business providing a range of network level interactive call services. With options for self-sufficiency or fully managed services, the platform gives the user the ability to run a professional call handling operation without the necessity for expensive hardware, installation, and on-going maintenance costs. Clients can route their required services through our web portal, allowing them to monitor their call traffic in real time or have reports sent periodically by email, fax or text.
The platform allows for fast and efficient configuration of services, with most functions available to go live at the push of a button. Web access also allows remote management from anywhere in the world, without any proprietary software requirement. We have triple redundancy in place covering location, infrastructure and service providers. This minimises the chance of any client down time and is key to the resilience of the platform.
Review of Operations
CallScripter
We have made steady progress in increasing the sales but as the market tightens our customers' expenditure comes under increased scrutiny. We have secured our second public sector contract and this will position us well to tackle more public sector tenders. We are poised to expand the OEM (Original Equipment Manufacturer) collaboration with Interactive Intelligence Inc. (ININ), adding the new reporting module to the existing bundle. The hosted solution continues to gain momentum with 6 clients now using the system which runs within a web-farm based in East London. This new service is ideally placed for the home-worker market and one of the fastest growing "Home Call Centre" companies is now using the hosted platform to deliver its solutions to its UK home workers.
Ansaback
The call volumes have remained sluggish as traffic has dipped across virtually every sector. Importantly, existing clients have remained loyal and new business has been added making up for some of the call volume decreases. The TV shopping channels have remained busy albeit not as much as in previous years. In recessionary times outsourcing is seen as a cost effective solution for a myriad of marketing, sales and order taking functions and we are currently quoting for an increased number of quality outsourced projects, many of which are referrals from existing clients.
IP3 Telecom
We now have 52 clients using the platform with early sales and marketing being focused on current Ansaback clients, which will continue to be the target market for the first half of 2009. Negotiations have opened with several insurance broker networks, where the platform will support our delivery into the financial services market where telephony efficiency is paramount, and IP3 Telecom will continue to work closely with CallScripter in their push to enter the public sector. Notably, on this front, we have agreed a trial with a local District Council which started in January 2009.
Risks
The risks remain unchanged. A key risk within Ansaback is the technology utilised in the call centre and as such we have invested in a 'state of the art' modern telephone switch. This new switch includes fail-over systems to further increase our business continuity / disaster recovery readiness whilst also enabling us to offer additional services to clients. Looking at other risks, to lower our susceptibility to power outages, we have a standby generator in case of power cuts, while our main computer systems have been upgraded to improve their resilience and minimise any down-time should a problem arise. Additionally, the Ansaback business is heavily dependent on consumer spending and any weakening in consumer confidence might have an adverse impact on the divisional performance. IP3 Telecom could be affected if there is a major carrier breakdown affecting the entire network.
The risks to the CallScripter division continue to be in the ability of our sales team and the partner resellers to achieve both domestic and international market penetration.
Dividend
The directors do not recommend payment of a dividend.
Outlook
Whilst the current outlook for the economy is difficult the Group offers products and services which are required by businesses. As witnessed by the many TV and newspaper reports since 1st January further deterioration across many sectors is evident and we have noticed a recent worsening in the movement of orders into sales, with some expected sales moving from December to February. The Board do not consider these sales to be lost, but it would appear that, in the current economic climate, some customers are starting to delay their purchasing decisions. Given current sales levels and the lumpy nature of our turnover the Directors anticipate the second half of the year to be an improvement on the first six months, and expect the overall annual result to break-even. The forthcoming months will present testing trading conditions and, whilst we are financially strong in cash terms, we have re-aligned our cost base and working practices to meet these challenges.
Philip Dayer
Chairman
13th February 2009
CONDENSED CONSOLIDATED INCOME STATEMENT
| Note | 6 months ended 31 December 2008 (unaudited) | 6 months ended 31 December 2007 (unaudited) | 12 months ended 30 June 2008 (audited) | |
| £ | £ | £ | ||
| Revenue | 3 | 1,935,839 | 1,805,123 | 3,947,385 |
| Cost of sales | (1,060,404) | (950,655) | (1,970,925) | |
| --------------- | -------------- | --------------- | ||
| Gross profit | 875,435 | 854,468 | 1,976,460 | |
| Administrative expenses | (947,777) | (727,320) | (1,600,486) | |
| --------------- | --------------- | --------------- | ||
| Operating (loss)/profit | 3 | (72,342) | 127,148 | 375,974 |
| Finance income | 8,061 | 15,490 | 22,426 | |
| Finance expenditure | (655) | (4,619) | (6,198) | |
| --------------- | --------------- | --------------- | ||
| (Loss)/profit before taxation | (64,936) | 138,019 | 392,202 | |
| Taxation | - | - | 180,566 | |
| --------------- | --------------- | --------------- | ||
| (Loss)/profit for the period | (64,936) | 138,019 | 572,768 | |
| --------------- | --------------- | --------------- | ||
| Attributable to: | ||||
| --------------- | --------------- | --------------- | ||
| Equity holders of the parent company | (64,936) | 138,019 | 572,768 | |
| --------------- | --------------- | --------------- | ||
| Basic and diluted earnings per share | 4 | (0.2)p | 0.5p | 1.9p |
CONDENSED CONSOLIDATED BALANCE SHEET
| 31 December 2008 (unaudited) | 31 December 2007 (unaudited) | 30 June 2008 (audited) | ||
| £ | £ | £ | ||
| Assets | ||||
| Non-current assets | ||||
| Intangible assets | 231,048 | 203,735 | 222,252 | |
| Plant and equipment | 238,246 | 198,564 | 259,715 | |
| Deferred taxation | 280,000 | 76,000 | 280,000 | |
| --------------- | --------------- | --------------- | ||
| Non-current assets | 749,294 | 478,299 | 761,967 | |
| Current assets | ||||
| Trade and other receivables | 764,779 | 654,443 | 943,826 | |
| Cash and cash equivalents | 239,273 | 324,637 | 309,514 | |
| --------------- | --------------- | --------------- | ||
| Current assets | 1,004,052 | 979,080 | 1,253,340 | |
| --------------- | --------------- | --------------- | ||
| Total assets | 46 | 1,753,346 | 1,457,379 | 2,015,307 |
| --------------- | --------------- | --------------- | ||
| Liabilities | ||||
| Non-current liabilities Long term borrowings | - | (10,273) | (3,781) | |
| Deferred taxation | (58,160) | (34,726) | (58,160) | |
| --------------- | --------------- | --------------- | ||
| Non current liabilities | (58,160) | (44,999) | (61,941) | |
| Current liabilities | ||||
| Trade and other payables | (442,059) | (484,178) | (614,793) | |
| Current portion of long term borrowings | (10,273) | (55,161) | (30,783) | |
| --------------- | --------------- | --------------- | ||
| Current liabilities | (452,332) | (539,339) | (645,576) | |
| --------------- | --------------- | --------------- | ||
| Total liabilities | (510,492) | (584,338) | (707,517) | |
| -------------- | --------------- | --------------- | ||
| --------------- | --------------- | --------------- | ||
| Net assets | 1,242,854 | 873,041 | 1,307,790 | |
| --------------- | --------------- | --------------- | ||
| Equity | ||||
| Equity attributable to shareholders of the parent | ||||
| Share capital | 297,908 | 297,908 | 297,908 | |
| Other reserves | 18,396 | 18,396 | 18,396 | |
| Profit and Loss Account | 926,550 | 556,737 | 991,486 | |
| --------------- | --------------- | --------------- | ||
| Total equity | 1,242,854 | 873,041 | 1,307,790 | |
| --------------- | --------------- | --------------- |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
| 6 months ended 31 December 2008 (unaudited) | 6 months ended 31 December 2007 (unaudited) | 12 months ended 30 June 2008 (audited) | |
| £ | £ | £ | |
| Cash flows from operating activities | |||
| (Loss)/profit for the period | (64,936) | 138,019 | 572,768 |
| adjustments for: | |||
| Interest income | (8,061) | (15,490) | (22,426) |
| Interest expense | - | 3,245 | 3,802 |
| Interest element of finance leases | 655 | 1,374 | 2,396 |
| Deferred tax provision | - | - | (180,566) |
| Depreciation | 26,041 | 18,229 | 40,222 |
| Amortisation | 51,890 | 32,789 | 83,677 |
| Decrease/(increase) in trade and other receivables | 179,047 | 5,800 | (283,583) |
| (Decrease) in trade and other payables | (101,450) | (124,557) | (9,727) |
| --------------- | --------------- | --------------- | |
| Cash generated from operations | 83,186 | 59,409 | 206,563 |
| Interest paid | - | (3,245) | (3,802) |
| Interest element of finance leases | (655) | (1,374) | (2,396) |
| --------------- | --------------- | --------------- | |
| Net cash generated from operating activities | 82,531 | 54,790 | 200,365 |
| --------------- | --------------- | --------------- | |
| Cash flows from investing activities | |||
| Interest received | 8,061 | 15,490 | 22,426 |
| Capitalisation of development costs Customer contracts purchased | (60,686) - | (53,754) - | (108,121) (15,038) |
| Purchase of property, plant and equipment | (75,856) | (72,206) | (148,769) |
| --------------- | --------------- | --------------- | |
| Net cash used in investing activities | (128,481) | (110,470) | (249,502) |
| --------------- | --------------- | --------------- | |
| Cash flows from financing activities | |||
| Repayments of borrowings | (15,000) | (25,001) | (46,667) |
| Capital element of finance leases | (9,291) | (8,572) | (8,572) |
| --------------- | --------------- | --------------- | |
| Net cash used in financing activities | (24,291) | (33,573) | (55,239) |
| --------------- | --------------- | --------------- | |
| Net decrease in cash | (70,241) | (89,253) | (104,376) |
| --------------- | --------------- | --------------- | |
| Cash at beginning of the period | 309,514 | 413,890 | 413,890 |
| Net decrease in cash | (70,241) | (89,253) | (104,376) |
| --------------- | ---------------- | --------------- | |
| Cash at the end of the period | 239,273 | 324,637 | 309,514 |
| --------------- | --------------- | --------------- |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Share Capital | Other Reserves | Profit And Loss Account | Total Equity | |
| £ | £ | £ | £ | |
| Balance at 31st December 2007 | 297,908 | 18,396 | 556,737 | 873,041 |
| Total recognised Income and expense for the period | - | - | 434,749 | 434,749 |
| -------------- | -------------- | -------------- | -------------- | |
| Balance at 30th June 2008 | 297,908 | 18,396 | 991,486 | 1,307,790 |
| Total recognised Income and expense for the period | - | - | (64,936) | (64,936) |
| -------------- | -------------- | -------------- | -------------- | |
| Balance at 31st December 2008 | 297,908 | 18,396 | 926,550 | 1,242,854 |
| -------------- | -------------- | -------------- | -------------- |
Notes to the Interim Financial Statements
The Company operates principally as a holding company. The main subsidiaries are engaged in the development and sale of call centre contact relationship management software and the provision of a 24 hours a day, 7 days a week out of hours and overflow telephony service.
IPPlus PLC is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom. The address of IPPlus PLC's registered office is also its principal place of business. IPPlus PLC's shares are listed on the Alternative Investment Market of the London Stock Exchange.
The Group's consolidated interim financial statements (the "interim financial statements") are presented in pounds sterling (£), which is also the functional currency of the parent company.
These interim financial statements do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 30th June 2008, prepared under IFRS (International Financial Reporting Standards), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 237 (2) of the Companies Act 1985.
These interim financial statements are for the six months ended 31st December 2008. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30th June 2008.
These interim financial statements are based on the recognition and measurement principles of applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and have been prepared under the historical cost convention.
The accounting policies adopted are consistent with those expected to be used in the financial statements for the year ended 30th June 2009 and have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.
IPPlus PLC operates two business sectors, Ansaback and CallScripter. The revenue and operating profit/(loss) of each business sector is summarised below:
| Business segments | Ansaback | CallScripter | Group |
| 6 months to December 2008 | £ | £ | £ |
| Revenue | 1,585,173 | 350,666 | 1,935,839 |
| Segment result | 97,553 | (169,895) | (72,342) |
| --------------- | --------------- | --------------- | |
| 12 months to June 2008 | |||
| Revenue | 3,244,122 | 703,263 | 3,947,385 |
| Segment result | 359,722 | 16,252 | 375,974 |
| --------------- | --------------- | --------------- | |
| 6 months to December 2007 | |||
| Revenue | 1,578,389 | 226,734 | 1,805,123 |
| Segment result | 176,152 | (49,004) | 127,148 |
| --------------- | --------------- | --------------- |
The calculation of the earnings per share is based on the profit/(loss) after taxation added to/(deducted from) reserves divided by the weighted average number of ordinary shares in issue during the relevant period. No diluted profit per share is shown because all options are non-dilutive.
| 6 months ended 31 December 2008 (unaudited) | 6 months ended 31 December 2007 (unaudited) | 12 months ended 30 June 2008 (audited) | |
| (Loss)/profit after taxation added to reserves | £(64,936) | £138,019 | £572,768 |
| Weighted average number of ordinary shares in issue during the period | 29,790,743 | 29,790,743 | 29,790,743 |
| Basic and diluted (loss)/earnings per share | (0.2)p | 0.5p | 1.9p |
On 29th September 2008 the company changed its name from County Contact Centres PLC to IPPlus PLC.
Copies of this interim statement are being sent to the Company's shareholders on Thursday 19 February 2009 and will also be available from the Company's head office at Melford Court, The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ. A copy is also available to download on the corporate page of the Group website at www.ipplusplc.com.