Stilo Regulatory News (STL)

3 Mar 2005 07:00

Stilo International PLC03 March 2005 3 March 2005 STILO INTERNATIONAL PLC PRELIMINARY RESULTS FOR YEAR ENDED 31 DECEMBER 2004 Stilo International plc ("Stilo" or the "Company"), the AIM quoted ContentEngineering solutions company, today announces its preliminary results for theyear ended 31 December 2004. Highlights • Sales revenues from continuing operations (Content Engineering Division) increased by 9% to £1.92m (2003: £1.76m), despite weak US$. • Trading loss for the Company reduced to £663k (2003: £1.18m), including trading losses for the Content Engineering Division of £260k (2003: £690k) • Knowledge Engineering Division closed, reducing ongoing trading losses, and providing increased management focus on core Content Engineering business • Cash balance of £659k as at 31 December 2004 • Significant progress made with new product development of StiloCF2, however later than planned release adversely impacted sales in 2004 • Acquisition of the Content Engineering Division of Xia Systems Corporation, Ottawa, strengthening Stilo's professional services and sales capability in North America • Customers during 2004 included IBM, Toshiba, Sun Microsystems and the Institute of Atomic Energy Agency Barry Welck, Chairman, commenting upon the results, said: "Future growth will be driven by sales of content engineering solutionsincluding Stilo consultancy services and software products, with initialimplementations of StiloCF2 anticipated during 2005. Its successful marketacceptance will have a significant positive impact upon future companyearnings." Enquiries Les Burnham, Chief Executive, Stilo International plc 01793 441444Russell Cook, Charles Stanley Corporate Finance 020 7739 8200Ian Seaton, Bankside Consultants 020 7444 4157 Chairman's Statement 2004 was a period of major change and continued improvement for the Company. InMarch 2004 we successfully placed an additional 40,000,000 New Ordinary Shares,raising £900,000 after costs. The Knowledge Engineering Division was closed asof 30 November 2004 in order to reduce costs and focus resources exclusively onthe core business of Content Engineering. In December 2004 we completed theacquisition of the Content Engineering division of Xia Sytems Corporation,Ottawa, Canada which significantly improves Stilo's professional services andsales capability in North America. This division has integrated well with theexisting North American operation. Board Changes Changes were made to the Board during the period. David Ashman, a major investorin Stilo, joined as a Non-Executive Director, whilst Stephen Buswell andProfessor Roy Pike, two of the original founders of Stilo, subsequently steppeddown as executive Director and non-executive Director, respectively. Results Combined sales revenues for the Content Engineering and Knowledge EngineeringDivisions totalled £2.08m (2003: £2.28m), whilst the total trading loss, beforegoodwill amortisation and exceptional costs, was significantly reduced to£663,000 (2003: £1.18m). Sales revenues from continuing operations in the Content Engineering Divisionincreased by 9% to £1.92m (2003: £1.76m), despite difficult market conditionsand a weak US$ which adversely impacted sales by approximately £90,000 whencompared with 2003. There was a trading loss in the Content Engineering Divisionof £260,000 (2003: £690,000). The Group retained a positive cash balance of £659,000 at 31 December 2004(2003: £474,000). This included receipt, after costs, of £900,000 from a placingof 40m shares at 2.5p per share in March 2004. Non-recurring exceptional costs for the year totaled £372,000. The companyincurred redundancy and office closure costs of £254,000 relating to theKnowledge Engineering Division. The Company also incurred costs of £118,000comprising staff redundancy costs in the Content Engineering Division. The Content Engineering business of Xia Systems Corporation was acquired inDecember 2004 for a cash consideration of £101,000, plus associated costs of£9,000, funded exclusively from Company cash reserves. Strategy Stilo is a specialist provider of content engineering solutions, helping majororganizations to solve complex publishing problems. This typically involves thelarge-scale conversion of information content to XML format, prior to its highperformance processing, storage and output to multiple media channels includingweb, print or CDRom. Stilo's products and expert professional services complement those offered byvendors of content management systems and leading systems integrators. Softwaretechnology partners include Documentum, SAP and Toshiba distributes Stiloproducts in Japan. Products OmniMark OmniMark provides an application development and high performance run-timeenvironment for XML content processing applications. Users of OmniMark productsare able to significantly reduce the time and costs of developing andmaintaining new content processing applications, whilst ensuringhigh-performance execution levels especially critical to major web applications.OmniMark version 8 is planned for release during 2005. StiloCF2 StiloCF2 enables organizations to improve the management of what can betypically hundreds of inter-related content processing applications, reducingthe time and costs of implementing and maintaining enterprise publishingsystems. StiloCF2 v2.1 is just coming out of development, with initial customersanticipated in 2005. Markets and Customers Key target markets include publishing, aerospace & defence, automotive,engineering, IT, Telco and government agencies. Our customers include WoltersKluwer, Airbus, Boeing, BAe, IBM, European Parliament and the InternationalAtomic Energy Agency. Stilo's offices are located in the UK, France, Benelux and North America. Prospects Stilo's content engineering business has over 170 customers subscribing toannual maintenance contracts for OmniMark software. In 2004 this accounted for35% of annual revenues. Future growth will be driven by sales of contentengineering solutions including Stilo consultancy services and softwareproducts, with initial implementations of StiloCF2 anticipated during 2005. Itssuccessful market acceptance will have a significant positive impact upon futurecompany earnings. Barry WelckChairman 3 March 2005Results for the year ended 31 December 2004Consolidated Profit and Loss Account 2004 2004 2003 2003 £'000 Unaudited £'000 Audited £'000 £'000 Turnover- continuing 1,916 1,759- discontinued 160 520 -------- -------- 2,076 2,279Cost of Sales (102) (233) -------- -------- Gross Profit 1,974 2,046 Administrative expenses- normal (2,928) (3,513)- exceptional (118) (28) -------- --------Operating loss- continuing (669) (1,012)- discontinued (403) (483) --------- --------- (1,072) (1,495) Profit on disposal of subsidiary - 18Exceptional item - divisionclosure (254) -costsInterest receivable 27 32 -------- --------Loss on ordinary activitiesbefore (1,299) (1,445)taxation Taxation 46 131 -------- --------Loss on ordinary activities aftertaxation (1,253) (1,314) -------- --------Loss for the financial year (1,253) (1,314) ===== =====Loss per share (pence) (1.56) (2.61) -------- --------Fully diluted loss per share (1.56) (2.61)(pence) -------- -------- Statement of Total Recognised Gains and LossesFor the year ended 31 December 2004 2004 2003 Unaudited Audited £'000 £'000Loss for the financial year (1,253) (1,314)Unrealised loss on foreign exchange (45) (5) -------- -------- (1,298) (1,319) -------- -------- Consolidated Balance Sheet as at 31 December 2004 2004 2003 Unaudited Audited £'000 £'000Fixed assetsIntangible assets 1,902 2,071Tangible assets 83 180 -------- -------- 1,985 2,251Current assetsDebtors 584 933Cash at bank and in hand 659 474 --------- --------- 1,243 1,407Creditors: amounts falling due within one year (675) (728) --------- ---------Net current assets 568 679 --------- ---------Total net assets 2,553 2,930 ===== ===== Capital and reservesCalled up share capital 5,423 5,023Share premium account 5,349 4,828Merger reserve 658 658Profit and loss account (8,877) (7,579) --------- ---------Equity shareholders' funds 2,553 2,930 ===== ===== Consolidated Cash Flow StatementFor the year ended 31 December 2004 2004 2003 Unaudited Audited £'000 £'000Net cash outflow from operating (504) (1,458)activitiesReturns on investments and servicingof financeInterest received 27 32 ------- -------Net cash inflow from returns oninvestments and 27 32servicing of finance Taxation credit received 91 125 Capital expenditurePurchase of tangible fixed assets (25) (61)Proceeds from disposal of fixed assets 4 - ------- -------Net cash outflow from capital (21) (61)expenditure Acquisitions and disposalsClosure costs (219) -Acquisition of division (110) -Loan to former subsidiary - 18 ------- -------Net cash outflow from acquisitions and (329) 18disposals ------- -------Net cash outflow before management ofliquid (736) (1,344)resources and financingManagement of liquid resources(Increase) / decrease in short term (113) 1,388deposits FinancingIssue of ordinary share capital 1,000 -Share issue costs (79) - ------- -------Net cash inflow from financing 921 - -------- --------Increase in cash 72 44 ===== ===== Notes to the Preliminary Announcement For the year ended 31 December 2004 1. The financial information in this announcement does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985.Statutory accounts for the previous financial year ended 31 December 2003 havebeen delivered to the Registrar of Companies. The auditors' report on thoseaccounts was unqualified and did not contain any statement under section 237(2)or (3) of the Companies Act 1985. The auditors have indicated that they intendto give an unqualified report, and will not contain any statement under section237(2) or (3) of the Companies Act 1985, on these statutory accounts. Copies ofthe Company's Report and Accounts will be sent to shareholders shortly and willbe available at the registered office of the Company: 2 Bloomsbury Street,London WC1B 3ST. 2. The consolidated accounts include the accounts of the Company and itssubsidiary undertakings and have been prepared using acquisition accountingprinciples. 3. The basic earnings per share is calculated on the weighted averagenumber of shares in issue during the year of 80,228,470 (2003: 50,228,470). Thefully diluted earnings per share takes account of outstanding options whichresults in a weighted average number of shares in issue during the year of80,228,470 (2003: 50,228,470). 4. The directors do not recommend the payment of a final dividend (2003: nil). This information is provided by RNS The company news service from the London Stock Exchange