23 Sep 2010 07:00
23 September 2010
STILO INTERNATIONAL PLC
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2010
Stilo International plc ("Stilo", the "Group" or the "Company"), the AIM quoted software and services company, today announces its unaudited Interim Results for the six months ended 30 June 2010.
Highlights
·; Return to profitability, with a profit before taxation of £50,000 (2009: loss £180,000)
·; Revenues of £1.1m (2009: £1.1m)
·; Cash of £709,000 as at 30 June 2010 (2009: £518,000)
·; Increased revenues for OmniMark software, including orders from Japan Patent Office, Honeywell and the European Parliament
·; Commencement of the evaluation of Stilo Migrate v2 by one of the world's largest technology companies
·; Development of new Migrate service to convert books to the EPUB format for viewing on iPads, smartphones and other mobile reading devices.
·; SAP certification of Product Change Impact Analysis software now successfully completed, leading to increased marketing opportunities
David Ashman, Chairman, commenting on the Company's performance, stated:
"Trading conditions in the first half of 2010 have been encouraging, and good progress has been made on several fronts. We have returned to profitability during the period and increased our cash reserves, while making excellent progress with the development of new products and online services.
Overall, the Board is pleased with the progress made to date, and is now making additional investments in sales and marketing to better exploit the business opportunities arising from recent product development efforts. These investments are anticipated to make a positive contribution to our profitability in the next financial year."
Enquiries:
| Stilo International plc Les Burnham, Chief Executive Chris Moore, Chief Financial Officer | 01793 441444 |
|
|
|
| Charles Stanley Securities (Nominated Adviser and broker) Russell Cook / Carl Holmes | 020 7149 6000 |
Trading conditions in the first half of 2010 have been encouraging and I am pleased to report that good progress has been made on several fronts. We have returned to profitability during the period and increased our cash reserves, while making excellent progress with the development of new products and online services.
General Strategy
Stilo provides software and professional services to large organisations across a broad range of industry sectors, including Aerospace and Defence, Engineering, High Tech, Publishing and Government.
We operate in two distinct markets: the e-publishing market where we provide XML content conversion solutions, and the SAP systems market where we provide product lifecycle management solutions.
Demand for XML content conversion solutions is driven by the growing requirement for large organisations to aggregate content from disparate sources and publish complex information, technical and non-technical, to the web. Our customers publish aircraft and military equipment technical manuals, automotive repair data, product data sheets, online news and regulatory reports. They include Boeing, Airbus, AutoZone, Volvo, British Library, Wolters Kluwer, Japan Patent Office and the European Parliament.
Demand for product lifecycle management solutions is driven by a requirement for SAP customers to better manage and integrate their business processes and workflow, tracking product information from initial design through to manufacture, delivery and invoice. Our customers are predominantly Manufacturing and Engineering companies, and include AgustaWestland, BAe Systems, Waters and EADS.
Operations
As at 30th June 2010 the Group employed 17 permanent employees, based in the UK and Canada. On an ongoing basis, extensive use is made of contractors for the delivery of professional services engagements.
The XML Content Conversion Solutions business is centred in Canada, with the professional services team serving particularly the requirements of North American customers.
The Solutions for SAP business is based in the UK, focussed primarily upon sales to UK and European customers.
Performance
There was a profit before taxation of £50,000 (2009: Loss £180,000).
Total sales revenues for the period decreased marginally by 0.8% to £1,097,000 (2009: £1,106,000). Operating costs decreased by 19% to £905,000 (2009: £1,116,000). Included within operating costs are foreign exchange gains of £10,000 (2009: Losses £37,000).
The decrease in operating costs was primarily due to the cost reduction measures and restructuring which took place in 2009. The five day working week resumed in Canada, with effect from 1 June 2010.
The Company had a cash balance of £709,000 as at 30 June 2010 (30 June 2009: £518,000).
In the XML Content Conversion Solutions business, sales revenues increased for OmniMark software and included orders from the Japan Patent Office, Honeywell and the European Parliament.
The evaluation of Stilo Migrate v2 by one of the world's largest technology companies is currently underway, and an initial order for content conversion services was received from a leading manufacturer of semiconductors in the USA, for the conversion of product documentation to the DITA XML format, increasingly favoured by high-tech companies.
During the period, we successfully completed a project at a typesetting company in the UK, developing a system to convert books to the EPUB format for viewing on iPADs, smartphones and other mobile reading devices, and are now in the process of promoting a Migrate-based EPUB conversion service more generally to publishing organisations.
Additionally, in May, we received a significant order from Alldata Inc, a leading provider of OEM auto repair software to the professional automotive service industry, to further develop a system to convert, aggregate and publish technical information online.
In the SAP business division, projects have been undertaken with Micromass UK, AgustaWestland (in the UK and Italy), Toshiba, EADS and encouragingly an order was received from Martin Baker Aircraft for our recently announced Impact Analysis software. We have successfully completed the process of having our software certified by SAP, and are now seeking to build partner sales channels, both domestically and internationally, particularly in Germany, where there is a substantial base of manufacturing companies using SAP systems.
Key Products & Solutions
OmniMark
OmniMark provides an application development and high performance run-time environment to support XML content conversion solutions. Users of OmniMark are able to reduce significantly the time and costs of developing and maintaining new content conversion applications, whilst ensuring high-performance levels of execution which is especially critical to major web applications. OmniMark has been deployed by customers around the world for many years, and is a robust, well-proven technology. OmniMark v10 is scheduled for release in 2011.
Stilo Migrate
Stilo Migrate, the world's first on-demand content migration service, embodies Stilo's extensive content engineering expertise and advanced content processing technology. Stilo Migrate V1 was released in February 2009 and has attracted significant levels of customer interest. Accessible 24x7 from anywhere in the world, users are able to upload source documents over the internet and migrate content to target XML formats, on a pay-as-you-use basis. Migrate V2.1 is scheduled for release in 2010 and will dramatically extend the range of source documents and target formats that can be offered to customers as part of a tailored content conversion solution.
Product Change Management Suite for SAP users
Managing product changes, and their impact upon engineering, manufacturing and supply chain logistics, can be a major problem for users of SAP systems. We have developed a modular suite of low-cost applications that help users address this particular issue. SAP certification of the core Product Change Impact Analysis module was successfully completed in August 2010, providing potential new customers with re-assurance regarding the quality of our software and support services.
Outlook
Overall, the Board is pleased with the progress made to date, and is now making additional investments in sales and marketing to better exploit the business opportunities presented through recent product development efforts. These investments are anticipated to make a positive contribution to our profitability in the next financial year.
David Ashman
Chairman
23 September 2010
Unaudited Group Income Statement for the six months ended 30 June 2010
|
| Six months to 30 June 2010 Unaudited £'000 | Six months to 30 June 2009 Unaudited £'000 | Year to 31 December 2009 Audited £'000 |
|
|
|
|
|
| Revenue - Continuing Operations | 1,097 | 1,106 | 2,071 |
|
|
|
|
|
| Cost of sales | (105) | (135) | (251) |
|
|
|
|
|
| Gross profit | 992 | 971 | 1,820 |
|
|
|
|
|
| Administrative expenses | (905) | (1,116) | (2,042) |
| Exceptional expenses | - | - | (88) |
| Amortisation of intangible assets | (37) | (35) | (70) |
|
|
|
|
|
| Operating profit / (loss) | 50 | (180) | (380) |
|
|
|
|
|
| Finance income | - | - | 1 |
|
|
|
|
|
| Profit / (loss) before tax | 50 | (180) | (379) |
| Income tax | - | (58) | (78) |
|
|
|
|
|
| Profit / (loss) for the period from continuing operations |
50 |
(238) |
(457) |
|
|
|
|
|
| Earnings / (loss) per share from continuing operations - basic (note 2) | 0.046p | (0.22p) | (0.42p) |
| - diluted (note 2) | 0.046p | (0.22p) | (0.42p) |
All profits / (losses) are attributable to owners of the parent.
Unaudited Group Statement of Comprehensive Income
for the six months ended 30 June 2010
|
| Six months to 30 June 2010 Unaudited £'000 | Six months to 30 June 2009 Unaudited £'000 | Year to 31 December 2009 Audited £'000 |
|
|
|
| |
| Profit / (loss) for the period | 50 | (238) | (457) |
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income
|
|
|
|
| Foreign currency translation differences | 13 | (25) | 10 |
|
|
|
|
|
| Total other comprehensive income | 13 | (25) | 10 |
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income relating to the period | 63 | (263) | (447) |
|
|
|
|
|
All comprehensive income is attributable to owners of the parent.
Unaudited Group Statement of Financial Position
as at 30 June 2010
|
| As at30 June 2010 Unaudited £'000 | As at 30 June 2009 Unaudited £'000 | As at 31 December 2009 Audited £'000 |
| Non-current assets |
|
|
|
| Goodwill | 1,690 | 1,676 | 1,683 |
| Other Intangible assets | 204 | 275 | 241 |
| Plant and equipment | 16 | 23 | 21 |
| Deferred tax assets | - | 73 | - |
|
|
|
|
|
|
| 1,910 | 2,047 | 1,945 |
| Current assets |
|
|
|
| Trade and other receivables | 427 | 569 | 480 |
| Income tax asset | 27 | 26 | 54 |
| Cash and cash equivalents | 709 | 518 | 436 |
|
|
|
|
|
|
| 1,163 | 1,113 | 970 |
|
|
|
|
|
| Total Assets | 3,073 | 3,160 | 2,915 |
|
|
|
|
|
| Current liabilities: Trade and other payables |
618 |
604 |
533 |
| Non-current liabilities: Other payables |
- |
18 |
6 |
|
|
|
|
|
| Total liabilities | 618 | 622 | 539 |
|
|
|
|
|
| Equity attributable to owners of the parent
|
|
|
|
| Called up share capital | 5,618 | 5,618 | 5,618 |
|
|
|
|
|
| Share premium account | 5,524 | 5,524 | 5,524 |
| Merger reserve | 658 | 658 | 658 |
| Retained earnings | (9,345) | (9,262) | (9,424) |
|
|
|
|
|
| Total equity | 2,455 | 2,538 | 2,376 |
|
|
|
|
|
|
|
|
|
|
| Total Equity and Liabilities | 3,073 | 3,160 | 2,915 |
|
|
|
|
|
Unaudited Group Statement of Changes in Equity
for the six months ended 30 June 2010
Attributable to the owners of the parent
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
|
|
| ||||||||||||||
| Balance at 1 January 2009 | 5,568 | 5,524 | 658 | (9,009) | 2,791 | ||||||||||||||
| Comprehensive income |
|
|
|
|
| ||||||||||||||
| Loss for the period | - | - | - | (238) | (238) | ||||||||||||||
| Other comprehensive income |
|
|
|
|
| ||||||||||||||
| Exchange adjustments | - | - | - | (25) | (25) | ||||||||||||||
| Total comprehensive income | - | - | - | (263) | (263) | ||||||||||||||
| Transactions with owners |
|
|
|
|
| ||||||||||||||
| Share based transactions | - | - | - | 10 | 10 | ||||||||||||||
| Total transactions with owners | - | - | - | 10 | 10 | ||||||||||||||
|
|
|
|
|
|
| ||||||||||||||
| Balance at 30 June 2009 | 5,618 | 5,524 | 658 | (9,262) | 2,538 | ||||||||||||||
| Comprehensive income |
|
|
|
|
| ||||||||||||||
| Loss for the period | - | - | - | (219) | (219) | ||||||||||||||
| Other comprehensive income |
|
|
|
|
| ||||||||||||||
| Exchange adjustments | - | - | - | 35 | 35 | ||||||||||||||
| Total comprehensive income | - | - | - | (184) | (184) | ||||||||||||||
| Transactions with owners |
|
|
|
|
| ||||||||||||||
| Share based transactions | - | - | - | 22 | 22 | ||||||||||||||
| Total transactions with owners | - | - | - | 22 | 22 | ||||||||||||||
|
|
|
|
|
|
| ||||||||||||||
| Balance at 1 January 2010 | 5,618 | 5,524 | 658 | (9,424) | 2,376
| ||||||||||||||
| Comprehensive income |
|
|
|
|
| ||||||||||||||
| Profit for the period | - | - | - | 50 | 50 | ||||||||||||||
| Other comprehensive income |
|
|
|
|
| ||||||||||||||
| Exchange adjustments | - | - | - | 13 | 13 | ||||||||||||||
| Total comprehensive income | - | - | - | 63 | 63 | ||||||||||||||
| Transactions with owners |
|
|
|
|
| ||||||||||||||
| Share based transactions | - | - | - | 16 | 16 | ||||||||||||||
| Total transactions with owners | - | - | - | 16 | 16 | ||||||||||||||
|
|
|
|
|
|
| ||||||||||||||
| Balance at 30 June 2010 | 5,618 | 5,524 | 658 | (9,345) | 2,455 |
Unaudited Group Cash Flow Statement
for the six months ended 30 June 2010
|
| Six months to 30 June 2010 Unaudited £'000 | Six months to 30 June 2009 Unaudited £'000 | Year to 31 December 2009 Audited £'000 |
| Cash flows from operating activities |
|
|
|
| Profit / (loss) before taxation | 50 | (180) | (379) |
| Adjustment for depreciation and amortisation | 62 | 45 | 87 |
| Adjustment for investment income | - | - | (1) |
| Adjustment for foreign exchange differences | - | (57) | 8 |
| Adjustment for share-based payments | 16 | 11 | 32 |
|
|
|
|
|
| Operating cash flows before movements in working capital | 128 | (181) | (253) |
| Decrease in trade and other receivables | 53 | 389 | 478 |
| Increase / (decrease) in trade and other payables | 85 | (256) | (354) |
|
|
|
|
|
| Cash generated from / (used in) operations | 266 | (48) | (129) |
| Tax credit received | 27 | 23 | 52 |
|
|
|
|
|
| Net cash from / (used in) operating activities | 293 | (25) | (77) |
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
| Finance income | - | - | 1 |
| Development costs capitalised | - | (23) | (24) |
| Purchase of plant and equipment | (20) | (6) | (10) |
|
|
|
|
|
|
|
|
|
|
| Net cash used in investing activities | (20) | (29) | (33) |
|
|
|
|
|
|
|
|
|
|
| Net increase / (decrease) in cash and cash equivalents
|
273 |
(54) |
(110) |
| Cash and cash equivalents at beginning of period | 436 | 572 | 546 |
|
|
|
|
|
| Cash and cash equivalents at end of period | 709 | 518 | 436 |
|
|
|
|
|
Notes to the Interim Results
for the six months ended 30 June 2010
1. The interim results (approved by the Board of Directors and authorised for issue on 22 September 2010) 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 2009. 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 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 date of the financial statements. If in the future such estimates and assumptions, which are based on management's best judgement at the date of the financial statements, 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 financial statements 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 2010 have been prepared in accordance with the accounting policies expected to apply in respect of the financial statements for the year ended 31 December 2010.
There is no tax charge for the period due to the availability of tax losses brought forward.
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 2010 was 109,728,470 shares (30 June 2009 and 31 December 2009: 109,728,470 shares). In accordance with IAS33 paragraph 47 there are no dilutive effects on the earnings per share calculations as the average price of ordinary shares in Stilo International plc is below the exercise price of the outstanding share options granted.
Copies of this report will be sent to shareholders and will be available to the public from the Company's registered office, Regus House, Windmill Hill Business Park, Whitehill Way, Swindon, SN5 6QR. The report will also be available to download from the investor relations section of the Company's website www.stilo.com.