PHD.L Regulatory News (PHD)

29 Mar 2007 07:00

PROACTIS Holdings PLC29 March 2007 PROACTIS Holdings PLC Interim results for the 6 months ended 31 January 2007 PROACTIS Holdings PLC ("PROACTIS" or the "Company") the specialist Spend Controlsoftware provider, is today issuing its interim results for the 6 month periodto 31 January 2007. KEY POINTS • Revenues increased by 88% year on year to £1.96m (2006 : £1.04m) • Operating profit increased twentyfold to £0.20m (2006 : £0.01m) • Good organic growth - 14 new account wins • On 17 November 2006, PROACTIS acquired Requisoft plc. Requisoft has contributed £0.23m of revenues profitably and the conversion programme is well underway • On 28 March 2007, PROACTIS exchanged contracts to acquire Alito (UK) Limited ("Alito"). The combination of PROACTIS and Alito presents the UK's public sector with the strongest procurement solution available • £0.40m invested in overhead for future revenues Rod Jones, Chief Executive Officer, commented: "I am delighted with the good progress that PROACTIS has made over the last sixmonths. It has been a period of strong growth with further penetration into ourcore markets across all our channels. We have continued to invest in the productand in sales and marketing, we have acquired one business and exchanged contracts on another that bring real value to the Group and have positioned ourselves well for the accelerated growth of our business. 29 March 2007 Enquiries: PROACTIS Holdings PLC Tel: 01904 481 999 Rod Jones, Chief Executive Officer Weber Shandwick Financial Tel: 020 7067 0700 Nick Oborne / John Moriarty / James White Notes to editors: PROACTIS creates, sells and maintains specialist software which enablesorganisations to streamline, control and monitor all internal and externalexpenditure, other than payroll. PROACTIS' software is already used by more than200 organisations in the UK from the commercial, public and not-for-profitsectors. PROACTIS is a profitable, high growth business operating from York. It is asales led organisation with a marketing strategy involving a mix of sellingdirect and selling through a number of accredited channel partners. PROACTISdevelops all of its own software with its own in-house team of developers. CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REPORT We are delighted to report our interim results for the 6 month period to 31January 2007. The period has been one of continued good progress, with strong growth andfurther penetration into our core markets across all our channels. We havecontinued to invest in the product and in sales and marketing, we have acquiredtwo businesses that bring real value to the Group and we have positionedourselves well for the accelerated growth of our business. PROACTIS has achieved a number of key milestones against the strategy outlinedin our 2006 Annual Report & Accounts. These were : - Developing the accredited channel partner route to market: We have increased our accredited channel partners by a further 3 during the period taking our total to 15. We are beginning to see the potential worldwide reach of our products, making our first sales into the US through this route to market - Increasing the direct sales force: We have recruited to plan and invested within our direct sales force. Our product requires a high degree of technical sales skill and lead times between recruitment and first sale can be substantial, our new sales team members are progressing to schedule - Implementing a marketing and public relations programme: We have invested in marketing and advertising related overhead which has driven recognition of the PROACTIS brand. We anticipate that this investment will continue - Pursuing an acquisition strategy: We have acquired Requisoft and exchanged contracts on Alito. These are strong and complementary businesses; the strategic rationale for each of these acquisitions and their progress is set out below. Acquisition of Requisoft On 17 November 2006, PROACTIS acquired Requisoft, a recognised brand with anexcellent customer base in the commercial sector including ABN Amro, CliffordChance, Air Mauritius, the Army Technical Support Agency, Banco IMI London, Cityof London Police, BT Syntegra, Cap Gemini, Foreign & Commonwealth Office, GNER,HM Treasury, Herbert Smith, Craegmoor Healthcare and John Lewis Partnership. Ourstrategy is to convert the customer base and pipeline to the PROACTIS solutionand make appropriate operational savings. Migration of the client base toPROACTIS' code has been largely mapped out and the acquired direct sales teamhas already made their first sales of PROACTIS product from the acquiredRequisoft pipeline. Integration of the back office has already been completed. The initial consideration was £0.8m payable in cash as to £0.6m and loan notesas to £0.2m repayable on 31 July 2007. In addition, and dependent on financialperformance from completion to 31 July 2007, an additional consideration cappedat £0.3m, may be paid by way of a second loan note. Acquisition of Alito On 28 March 2007, PROACTIS exchanged contracts to acquire Alito, anotherrecognised brand with an excellent customer base in the public sector totallingover 40 local authorities and including 22 Yorkshire and Humberside authorities.The acquisition of Alito makes PROACTIS the leading provider of spend controlsoftware to the UK public sector and accelerates our product reach towardcontract management and tendering. It also presents excellent cross sell and upsell opportunity of both customer bases and we have acquired an excellent teamin sales, development and support which will complement our own. The initial consideration is £1.5m payable in cash. In addition, and dependenton financial performance from completion to 31 March 2008, an additionalconsideration capped at £1.75m, may be paid in cash or shares at PROACTIS'option. Financial overview Revenues increased to £2.0m from £1.0m for the same period last year. Thisincludes £0.2m from Requisoft since the date of the acquisition. The operating profit was £0.2m (6 months ended 31 January 2006 - £8,000) whichincludes a positive contribution from Requisoft. This level of profit has been achieved despite continued investment in thefuture growth of the business during this last six months. The principal areasof investment being: - Direct sales force overhead £0.2m- Sales and marketing overhead of £0.1m- Investment in PLC status of £0.1m- Research and development of our products of £0.2m At 31 January 2007 the Group had cash of £3.0m and remained debt free, with theexception of £0.2m of loan notes payable on 31 July 2007 in respect of theRequisoft acquisition. The acquisition of Alito will be recognised in the Annual Report & Accounts to31 July 2007. Employees and partners The directors thank all management and staff at PROACTIS for their dedicationand commitment without which our substantial progress would not have beenpossible. We offer a special thanks to our Accredited Channel Partners whocontinue to promote and sell our products to great effect. Outlook Our continued investment in the PROACTIS brand and the acquisitions of Alito andRequisoft strongly position PROACTIS for substantial growth. We look forward tothe continued delivery of value to our shareholders. Alan Aubrey Rod JonesChairman Chief Executive Officer28 March 2007 Consolidated Profit and Loss AccountFor the six month period ended 31 January 2007 Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 31 January 2007 31 January 2006 31 July 2006 Acquisitions Total Note £000 £000 £000 £000Turnover 227 1,955 1,039 2,905Cost of sales (47) (861) (334) (1,261) __________________________________________________Gross profit 180 1,094 705 1,644Administrative costs (160) (1,076) (697) (1,747) __________________________________________________Operating profit | |before exceptional | |items | 20 18 8 479 |Exceptional items 5 | - 182 - (582)| |_________________________________________________|Operating profit / (loss) 20 200 8 (103)Interest receivable 88 4 29Interest payable - (4) (9) __________________________________________________Profit / (loss) before taxation 288 8 (83)Taxation 7 10 - __________________________________________________Profit / (loss) for the financialperiod 295 18 (83) __________________________________________________Earnings per shareBasic 3 1.0p 0.3p (0.5p) __________________________________________________Diluted 3 0.9p 0.3p (0.5p) __________________________________________________Basic excludingexceptional items 3 0.4p 0.3p 2.5p __________________________________________________ Consolidated balance sheetAs at 31 January 2007 Unaudited Unaudited Audited 31 January 2007 31 January 2006 31 July 2006 Note £000 £000 £000Fixed assetsGoodwill 8 1,192 - -Tangible fixed assets 30 17 18 __________________________________________________ 1,222 17 18Current assetsDebtors 1,187 458 1,105Cash at bank 2,950 290 3,764 __________________________________________________ 4,137 748 4,869Creditors : Amounts falling due within one year (1,414) (634) (1,237) __________________________________________________Net current assets 2,723 114 3,632 Creditors : Amountsfalling due after more than one year - (133) - __________________________________________________ 3,945 (2) 3,650 __________________________________________________ Capital and reservesCalled up share capital 3,012 728 3,012Share premium 2,735 - 2,735Merger reserve 556 1,796 556Profit and loss account (2,358) (2,526) (2,653) __________________________________________________ Shareholders' funds 3,945 (2) 3,650 __________________________________________________ Consolidated Cashflow StatementFor the six month period ended 31 January 2007 Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 31 January 2007 31 January 2006 31 July 2006 £000 £000 £000Operating profit / (loss) 200 8 (103)Depreciation and amortisation 8 5 11(Increase) / decrease in working capital (474) (91) (110) _________________________________________Net cash outflow from operating activities (266) (78) (202)Net cash inflow from servicing of finance 88 - 11Net cash inflow from taxation 7 10 10Net cash outflow from acquisitions (623) - -Net cash outflow from capital expenditure (20) (4) (11)Net cash inflow / (outflow)from short term deposits 820 35 (3,265) _________________________________________Net cash outflow before financing 6 (37) (3,457) FinancingProceeds from the placing - - 4,000Costs of the placing - - (335)Shares issued from employeeshare option scheme - 10 97Loans repaid - (13) (171) _________________________________________Net cash inflow / (outflow) from financing - (3) 3,591 _________________________________________Increase / (decrease) in cash in the period 6 (40) 134 _________________________________________Analysis of net fundsCash at bank and in hand 200 20 194Short term deposits 2,750 270 3,570Loan notes (211) (158) - _________________________________________Net cash 2,739 132 3,764 _________________________________________ Interim accountsFor the six month period ended 31 January 2007 Notes 1. The interim report is prepared on the basis of the accounting policies set out in the Company's Annual Report & Accounts for the year ended 31 July 2006. The comparative figures for the year ended 31 July 2006 are not the Company's statutory accounts for the financial period. These accounts have been audited by the Company's Auditors. The report of the Auditors was unqualified and did not contain a statement under Section 23(2) or (3) of the Companies Act 1985. 2. The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings. 3. The calculation of basic earnings per share for the period is based on the profit or loss after taxation divided by the weighted average number of ordinary shares in issue for the period being 30,122,810 for 31 January 2006 (16,264,508 for 31 July 2006 and 6,388,930 for 31 January 2005). The weighted average number of ordinary shares used in the calculation of diluted earnings per share for the period was 31,238,754 for 31 January 2006 (16,264,508 for 31 July 2006 and 6,388,930 for 31 January 2005). 4. There were no recognised gains or losses other than the profit for the six month period ended 31 January 2007. 5. The exceptional credit recognised during the six month period ended 31 January 2007 is the reversal of a provision made at the time of the float, originally charged to the profit and loss account as an exceptional item during the year ended 31 July 2006. 6. There were no dividends for the six month period ended 31 January 2007. 7. The interim report was approved by the Board of Directors on 28 March 2007. 8. During the period PROACTIS acquired the entire issued ordinary share capital of Requisoft plc. The Group has adopted the principles of acquisition accounting. The assets and liabilities arising from the acquisition are as follows : Provisional fair value £000Tangible fixed assets 13Cash at bank and in hand (43)Net current liabilities (371) _________Net liabilities acquired (401) _________Purchase consideration Cash 580 Loan notes 211 _________ 791 _________Provisional goodwill 1,192 _________Cash outflow on acquisition 623 This information is provided by RNS The company news service from the London Stock Exchange