Stilo Regulatory News (STL)

23 August 2019

STILO INTERNATIONAL PLC

UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2019

Stilo International plc ("Stilo", the "Group" or the "Company") today announces its unaudited Interim Results for the six months ended 30 June 2019. The Company provides software tools and cloud services that help organisations create and process structured content in XML format, so that it can be more easily stored, managed, re-used, translated and published to multiple print and digital channels.

FINANCIAL HIGHLIGHTS

·; Reduction in sales revenues to £638,000 (2018: £707,000)

·; Operating costs remain level £656,000 (2018: £657,000), excluding capitalised development costs for AuthorBridge of £110,000 (2018: £99,000)

·; Loss before tax for the period of £29,000 (2018: £42,000 profit)

·; Total comprehensive income for the period remained positive at £14,000 (2018: £5,000) subsequent to favourable foreign currency translation differences

·; Cash of £1,096,000 as at 30 June 2019 (2018: £1,442,000)

·; No interim dividend declared

BUSINESS HIGHLIGHTS

·; Migrate customers for the period include Mastercard, Arris/Commscope, Applied Materials, Visa, GE Healthcare and Deltek.   

·; AuthorBridge customers in the US include IBM, Kaplan Professional Education and the Nuclear Regulatory Commission. A major release of AuthorBridge shipped in June 2019 and it is not expected to further capitalise AuthorBridge development costs beyond this date. 

·; OmniMark sales include European Parliament, Qantas and Embraer.

David Ashman, Chairman, commenting on the Company's performance, stated:

In our Trading Update of 23 May 2019 we indicated that sales were slower than planned and that a loss was expected for the half-year period.

We are currently expecting trading to continue slowly for the remainder of 2019 and need to take measures to reduce our operating costs wherever possible. Of primary importance is the proposal to de-list from AIM and re-register as a private limited company, subject to shareholders' approval. This is the subject of an associated announcement issued immediately following the release of these interim results and is expected to generate potential annualised cost savings of over £120,000. Additional cost-reduction activities include organisational and management changes that are currently underway.

The Company continues to develop high-quality software tools used by leading organisations around the world. With a reduced cost base and increased sales to be driven by the recruitment to the newly created role of VP Sales & Marketing, it is our intention to generate steady ongoing profits and resume the payment of dividends to shareholders as soon as possible.

ENQUIRIES

Unaudited Group Income Statement

for the six months ended 30 June 2019

Unaudited Group Statement of Comprehensive Incomefor the six months ended 30 June 2019

All comprehensive income is attributable to equity shareholders of the parent company.

Unaudited Group Statement of Financial Position

as at 30 June 2019

Unaudited Group Statement of Changes in Equity

for the six months ended 30 June 2019

Unaudited Group Cash Flow Statement

for the six months ended 30 June 2019

Notes to the Interim Results

for the six months ended 30 June 2019

1. The interim results (approved by the Board of Directors and authorised for issue on 23 August 2019) are neither audited nor reviewed and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The financial information for the full preceding year is extracted from the statutory accounts for the financial year ended 31 December 2018. Those accounts, upon which the auditors issued an unqualified opinion, and did not contain a statement under Section 498 (2) and (3) of the Companies Act 2006, have been delivered to the Registrar of Companies. As permitted, this interim report has been prepared in accordance with UK AIM listing rules and not in accordance with IAS 34 'Interim Financial Reporting', therefore it is not fully in compliance with IFRS.

2. Stilo International plc is a public limited company incorporated in the United Kingdom. The Company is domiciled in the United Kingdom and its ordinary shares are traded on the AIM market of the London Stock Exchange plc. Stilo provides specialist software and professional services.

The consolidated interim results have been prepared in accordance with the recognition and measurement principles of IFRS including standards and interpretations issued by the International Accounting Standards Board, as adopted by the European Union. They have been prepared using the historical cost convention.

The preparation of the interim results requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. If in the future such estimates and assumptions, which are based on management's best judgement at the reporting date, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change. The interim results are presented in sterling and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The interim results of the Group for the period ended 30 June 2019 have been prepared in accordance with the accounting policies expected to apply in respect of the financial statements for the year ending 31 December 2019.

3. The financial position and performance of the group was particularly affected by the adoption of the new revenue standard IFRS 16 Leases as from 1 January 2018. In accordance with the transition provisions in IFRS 16, the Group has adopted the new rules retrospectively with the cumulative effect of initially applying the standard recognised at the date of the initial application. The impact of the adoption as at 1 January 2019 was to recognise a right-of-use asset and a lease liability of £335,000.

4. The basic earnings per share is calculated on the weighted average number of shares in issue during the period. The fully diluted earnings per share takes account of outstanding options. The weighted average number of ordinary shares in issue for the six months to 30 June 2019 was 113,930,470 shares (30 June 2018: 113,930,470 and 31 December 2018: 113,930,470 shares). The weighted average number of ordinary shares in issue for the six months to 30 June 2019, for the fully diluted earnings per share, taking account of outstanding options was 117,380,214 (30 June 2018: 116,615,746, 31 December 2018: 115,944,901).

5. Copies of this report will be available to download from the investor relations section of the Company's website www.stilo.com.