Progility Regulatory News (PGY)

12 Apr 2006 07:01

ILX Group PLC12 April 2006 ILX Group PLC Trading Update & Adoption of International Financial Reporting Standards ILX Group plc ('ILX Group'), the AIM quoted vocational education and trainingcompany, today made the following statement about the year to 31 March 2006which has just ended and the decision to adopt IFRS for that year. "We are pleased to report that trading in the fourth quarter was broadly in linewith expectations. Turnover for the year, whilst marginally behind ourexpectations, will reach £6.9 million, an increase of 77% on the previous year(2005: £3.9 million). Operating profit, under IFRS which will be adopted for thefirst time, will come in at approximately £1.1 million (2005: £0.8 million)before charges relating to share options of £0.1 million (2005: £0.05 million).The Company's Preliminary Results for the year ended 31 March 2006 will beannounced on 26 June 2006. The Company has seen significant growth from its core markets, particularlyPRINCE2 and ITIL, with sales of computer-based-training (CBT) products in thisarea exceeding our expectations at over 30% up on last year. CBT sales in thelast quarter totalled over £900,000 and included major new customers Barclays,Logica CMG, and Vodafone. Considerable investment in new CBT products has taken place, particularly in thesecond half of the year, including a blended training product in "ManagingSuccessful Programmes" which has now gone on sale and other products which willbe brought to market over the next few months. Classroom training, again in PRINCE2 and ITIL, increased more than 100% on theprevious year. Whilst this is extremely encouraging, the speed of the expansionhas led to some erosion of gross margins from this part of the business. Thishas now been addressed through the hire of key personnel who have a track recordof delivering large volumes of training events. Significant customers in thelast quarter included clients such as Cheshire County Council, ComputaCenter,the Home Office, Legal and General, and National School of Government. The two acquisitions acquired in the year have also bedded down well. MountLane, acquired in November 2005, has secured major deals with AWE, BritishAmerican Tobacco, and a major bank for their flagship offering the PerformanceSupport Tool. Customer Projects, acquired in February, has recently secured anextended deal with the Pension Protection Fund, the bulk of which will bedelivered in financial year 2006/7. We remain optimistic about the future prospects for the Company and the board isconfident that the company is on track to meet market expectations for 2007." Re. Adoption of International Financial Reporting Standards A full reconciliation between figures under UK GAAP and IFRS will be provided atthe time of the preliminary announcement. The key differences are: * Under IFRS, a charge must be made for the value of share options provided to staff; a charge will therefore be made in both years ended 31 March 2005 and 2006, as discussed above. * Under IFRS, goodwill is subject to annual impairment review rather than regular amortisation. Accordingly, no goodwill charge is expected for either of the years ended 31 March 2005 and 2006. In 2005 the goodwill charge was £0.29 million. * Under IFRS, product development expenditure must be capitalised where it relates to commercially viable projects. (2005: £0.2 million). Previously, under UK GAAP, companies had the option to expense or capitalise. Capitalised developments are then subject to annual impairment reviews. For further information, please contact: ILX Group plc Binns & Co PR Ltd Charles Stanley Securities Ken Scott Paul McManus Philip Davies Tel: 020 7371 4444 Tel: 020 7786 9600 Tel: 020 7953 2457 Mob: 07980 541 893 This information is provided by RNS The company news service from the London Stock Exchange