25 Sep 2008 07:00
25 September 2008
STILO INTERNATIONAL PLC
UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2008
Stilo International plc ("Stilo" or the "Company"), the AIM quoted software and services company, today announces its unaudited Interim Results for the six months ended 30 June 2008.
Highlights
Profit before taxation of £137,000 (2007: £39,000 loss)
Sales revenues increased by 3% to £1,294,000 (2007: £1,251,000)
Operating costs reduced by 6% to £1,054,000 (2007: £1,120,000)
Release of JETView digital publishing solution for airline maintenance in collaboration with ABX Air, Inc.
Major new contract wins include AgustaWestland, BAe, AutoZone and Schlumberger
Improved cash position of £572,000 as at 30 June 2008 (2007: £237,000)
Barry Welck, Chairman, commenting on the Company's performance, stated:
"We have made significant progress during the six months ended 30 June 2008, reporting increased turnover and profits, a major product release, a doubling in product development expenditure, an improved cash position and a growing order book.
In May 2008 we announced the release of JETView, a digital publishing solution for airline maintenance documentation, developed and marketed in association with ABX Air, Inc. Additionally we have recently won major contracts for professional services engagements with clients in Europe and North America, including AgustaWestland, BAe, AutoZone and Schlumberger.
With innovative new product releases scheduled over the coming months, the Board anticipates ongoing improvements in future revenue growth and profitability."
Enquiries:
| Les Burnham, Chief Executive, Stilo International plc | 01793 441444 |
| Russell Cook and Carl Holmes, Charles Stanley Securities (Nominated Adviser and broker) | 020 7149 6000 |
Chairman's Statement
We have made significant progress during the six months ended 30 June 2008, reporting increased turnover and profits, a major product release, a doubling in product development expenditure, an improved cash position and a growing order book.
Marketplace
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 key market sectors: the XML content processing market supporting e-publishing applications, and the SAP systems market for Product Lifecycle Management and Document Management Solutions.
The XML content processing market 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.
The SAP market for Product Lifecycle Management and Document Management Solutions is driven by a requirement for organisations 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 engineering companies operating in the Aerospace and Defence sector, and include AgustaWestland, BAe Systems and EADS.
Operations
As at 30th June 2008, the group employed 23 full-time employees, based in the UK, and Canada. On an ongoing basis, extensive use is made of contract personnel for professional services and new product development activities.
The XML content processing business is centred in Canada, with the professional services team serving particularly the requirements of North American customers.
The SAP business division is based in the UK, focussed primarily upon sales to UK and European customers.
Performance
The Company continues to make progress and build a solid foundation to support future growth.
The interim trading profit before taxation, after capitalisation of development costs, was £137,000 (2007: £39,000 loss), a significant improvement over the previous year.
Total sales revenues for the period increased by 3% to £1,294,000 (2007: £1,251,000), and operating costs were reduced by 6% to £1,054,000 (2007: £1,120,000).
A sales increase in content processing services, OmniMark software and maintenance revenues, was offset by a sales decrease in the SAP business division caused by order delays, subsequently received. Savings in operating costs were primarily due to the closing of the Paris office in 2007.
The company increased its investment in Research and Development for the period with expenditure related to the ongoing development of OminMark and additionally Stilo Migrate. Expenditure on Stilo Migrate has been capitalised as an intangible asset.
The Company had a cash balance of £572,000 as at 30 June 2008 (30 June 2007: £237,000).
In June 2008 two directors (L.Burnham and D. Ashman) collectively subscribed for 5,000,000 new 1p Ordinary shares in Stilo at 1.8p per share.
The accompanying interim results for the six months ended 30 June 2008 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
Development
We invest in two major product development programmes. The ongoing development of our flagship product, OmnniMark, is undertaken in Canada, while the development and upcoming release of Stilo Migrate, a new, ground-breaking, online XML content conversion service, is managed from Europe.
A recent professional services engagement with ABX Air, Inc., resulted in the release in April 2008 of JETView, a digital publishing solution for managing airline maintenance information.
In the SAP business division, we have now released the first three of a planned range of 'solution accelerators', all of which have arisen from professional services engagements undertaken with customers.
Products & Solutions
OmniMark
OmniMark provides an application development and high performance run-time environment for XML content processing applications. Users of OmniMark are able to reduce significantly the time and costs of developing and maintaining new content processing 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 over a fifteen year period, and is a robust, well-proven technology, with OmniMark v9 scheduled for release Q4 2008.
Stilo interactive Technical Information Publisher (iTIP)
Originally developed for the Canadian Military, Stilo's iTIP has evolved over a ten year period as a proven approach to delivering complex technical information to widely-distributed user communities, using simple web browsers.
iTIP provides a complete solution for organisations that create, manage and deliver technical information across the full product lifecycle, including mission-critical equipment systems in the aerospace, defence, automotive, transportation, manufacturing and engineering sectors.
In May 2008 Stilo released JETView, a digital publishing solution for airline maintenance documentation, developed and marketed in co-operation with ABX Air, Inc., and based upon the iTIP publishing framework.
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. Scheduled to be available in the coming months, Stilo Migrate is set to revolutionise the growing market for content migration services. Accessible 24x7 from anywhere in the world, users will be able to upload source documents over the internet and migrate content to target XML formats, on a pay-as-you-use basis.
Solution Accelerators for SAP
It is our intention to develop a range of low-cost solution accelerators that rapidly extend the functionality of SAP systems, and to date have announced the first three i.e., Part Impact Analysis, Document Link and Data Archive. Each accelerator is implemented for a fixed price, including both a software and services component.
Outlook
The trading results show a steady growth in profits compared with the previous year, notwithstanding a doubling in product development expenditure during the period.
In May 2008 we announced the release of JETView, a digital publishing solution for airline maintenance documentation, developed and marketed in association with ABX Air, Inc. Additionally we have recently won major contracts for professional services engagements with clients in Europe and North America, including AgustaWestland, BAe, AutoZone and Schlumberger.
With innovative new product releases scheduled over the coming months, the Board anticipates ongoing improvements in future revenue growth and profitability.
Barry Welck
Chairman
25 September 2008
Unaudited Group Income Statement
for the six months ended 30 June 2008
| Six months to 30 June 2008 Unaudited £'000 | Six months to 30 June 2007 Unaudited £'000 | Year to 31 December 2007 Audited £'000 | |
| Continuing Operations | |||
| Revenue | 1,294 | 1,251 | 2,436 |
| Cost of sales | (89) | (129) | (240) |
| -------------- | -------------- | -------------- | |
| Gross profit | 1,205 | 1,122 | 2,196 |
| Administrative expenses | (1,054) | (1,120) | (2,128) |
| Write down of intangible assets | (15) | (7) | (30) |
| Exceptional expenses | - | (37) | (105) |
| -------------- | -------------- | -------------- | |
| Operating profit / (loss) | 136 | (42) | (67) |
| Finance income | 1 | 3 | 5 |
| -------------- | -------------- | -------------- | |
| Profit / (loss) before tax | 137 | (39) | (62) |
| Income tax | - | - | 156 |
| -------------- | -------------- | -------------- | |
| Profit / (loss) for the period from continuing operations | 137 | (39) | 94 |
| ======== | ======== | ======== | |
| Earnings / (loss) per share from continuing operations - basic and diluted (note 3) | 0.13p | (0.04)p | 0.09p |
| -------------- | -------------- | -------------- |
All profits / (losses) are attributable to equity holders of the parent.
Unaudited Group statement of recognised income and expense
for the six months ended 30 June 2008
| Six months to 30 June 2008 Unaudited £'000 | Six months to 30 June 2007 Unaudited £'000 | Year to 31 December 2007 Audited £'000 | |
| Foreign currency translation differences | 40 | 47 | 26 |
| -------------- | -------------- | -------------- | |
| Net income recognised directly in equity | 40 | 47 | 26 |
| Profit / (Loss) for the period | 137 | (39) | 94 |
| -------------- | -------------- | -------------- | |
| Total recognised income for the period attributable to the equity shareholders | 177 | 8 | 120 |
| of the parent | -------------- | -------------- | -------------- |
Unaudited Group Balance Sheet
as at 30 June 2008
| | As at 30 June 2008 Unaudited £’000 | As at 30 June 2007 Unaudited £’000 | As at 31 December 2007 Audited £’000 | |
| Non-current assets | | | | |
| Goodwill | 1,671 | 1,671 | 1,671 | |
| Other Intangible assets | 254 | 126 | 224 | |
| Plant and equipment | 29 | 31 | 32 | |
| Deferred tax assets | 100 | 100 | 100 | |
| | -------------- | -------------- | -------------- | |
| | 2,054 | 1,928 | 2,027 | |
| Current assets | | | | |
| Trade and other receivables | 537 | 715 | 725 | |
| Income tax asset | 55 | 17 | 56 | |
| Cash and cash equivalents | 572 | 237 | 236 | |
| | -------------- | -------------- | -------------- | |
| | 1,164 | 969 | 1,017 | |
| | -------------- | -------------- | -------------- | |
| Total Assets | 3,218 | 2,897 | 3,044 | |
| | ======== | ======== | ======== | |
| Current liabilities: Trade and other payables | 683 | 611 | 765 | |
| | | | | |
| Long Term liabilities: Other payables | 41 | 70 | 51 | |
| | -------------- | -------------- | -------------- | |
| Total liabilities | 724 | 681 | 816 | |
| | | | | |
| Equity attributable to equity holders of the parent | | | | |
| Called up share capital | 5,618 | 5,523 | 5,568 | |
| Shares to be issued | - | 45 | - | |
| Share premium account | 5,524 | 5,485 | 5,485 | |
| Merger reserve | 658 | 658 | 658 | |
| Retained earnings | (9,306) | (9,495) | (9,483) | |
| | -------------- | -------------- | -------------- | |
| Total equity | 2,494 | 2,216 | 2,228 | |
| | -------------- | -------------- | -------------- | |
| | | | | |
| Total Equity and Liabilities | 3,218 | 2,897 | 3,044 | |
| | ======== | ======== | ======== | |
Unaudited Group Cash Flow Statement
for the six months ended 30 June 2008
| Six months to 30 June 2008 Unaudited £'000 | Six months to 30 June 2007 Unaudited £'000 | Year to 31 December 2007 Audited £'000 | |
| Cash flows from operating activities | |||
| Cash generated from / (used in) operations | 293 | (180) | (74) |
| Tax credit received | - | - | 17 |
| -------------- | -------------- | -------------- | |
| Net cash from / (used in) operating activities | 293 | (180) | (57) |
| Cash flows from investing activities | |||
| Finance income | 1 | 3 | 5 |
| Purchase of plant and equipment | (2) | (6) | (26) |
| Capitalised development costs | (45) | - | (106) |
| Consideration on Proceed Acquisition | - | - | (90) |
| -------------- | -------------- | -------------- | |
| Net cash used in investing activities | (46) | (3) | (217) |
| -------------- | -------------- | -------------- | |
| Financing activities | |||
| Issue of ordinary share capital | 90 | - | 90 |
| Share Issue Costs | (1) | - | - |
| -------------- | -------------- | -------------- | |
| Net cash from financing activities | 89 | - | 90 |
| -------------- | -------------- | -------------- | |
| Net increase / (decrease) in cash and cash equivalents | 336 | (183) | (184) |
| Cash and cash equivalents at beginning of period | 236 | 420 | 420 |
| -------------- | -------------- | -------------- | |
| Cash and cash equivalents at end of period | 572 | 237 | 236 |
| ======== | ======== | ======== |
Notes to the Interim Results
for the six months ended 30 June 2008