STP.L Regulatory News (STP)

30 Jan 2007 07:02

Spiritel PLC30 January 2007 For immediate release 30 January 2007 SPIRITEL PLC ("Spiritel" or "the Company") Interim results for the six months ended 31 October 2006 Spiritel plc (AIM: STP), the telecommunications company, is pleased to announceits interim results for the six months ended 31 October 2006. Highlights • Trading at Spiritel has proceeded in line with Directors' expectations and the Company is on track to meet full year market forecasts, underpinned by recent earnings-enhancing acquisitions • Turnover in the period of £6.84m (H1 2005: £8.12m) with pre-tax loss of £1.14m (H1 2005: £0.23m) • Current half has started well with the Company trading at a positive underlying EBITDA level during the first two months • Reorganisation of the Company into Spiritel Wholesale and Spiritel Retail to broaden routes to market and achieve a direct relationship with customers to complement indirect sales • Delivery of Spiritel Retail's acquisitive strategy through the purchase and integration of Callplan Ltd and Networks Direct (UK) Ltd. The timing of these acquisitions was such that they made only a small contribution to the period under review • Spiritel continues to evaluate further potential acquisitions and will report further progress in due course • Directory enquiries service 118 918 launched in November 2006 in partnership with Oxfam, which receives 9p from every call Commenting on the results, Lord St John of Bletso, Spiritel's Chairman, said: "We are delighted by the progress made in the first half, which has allowed us toenter the second half in a much stronger position. Our cash generativeacquisitions completed at the end of the first half will make a fullcontribution during the second half. We continue to evaluate further potentialacquisition candidates and have been impressed by the opportunities available tous. The current half has started well, with the Company trading at a positiveunderlying EBITDA level during the first two months, giving us confidence forthe remainder of the year." For further information: Spiritel plc 020 7160 0100Alastair Mills, Chief Executive Buchanan Communications 020 7466 5000Mark Court/Mary-Jane Johnson Notes for Editors: About Spiritel plc Spiritel plc (AIM: STP) is a telecommunications group that joined the AIM marketof the London Stock Exchange in July 2004. We have multiple routes to market forour products and services, which include a range of both traditional andemerging telecoms technologies. Spiritel's client base includes corporate,wholesale and retail customers served directly through our value added resellerdivision Spiritel Retail, via web portals and through independent resellers. Spiritel, in partnership with Oxfam, has launched the directory enquiriesservice 118 918, from which Oxfam receives 9p from every call made. For further information please visit www.spiritelplc.com CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW The half year to 31 October 2006 has been one of considerable progress in termsof the development of the Company. In July we took the decision to reorganisethe Company's divisional structure into Spiritel Wholesale and Spiritel Retail,an initiative to support the Company's strategic objective of broadening itsroutes to market with a particular emphasis on achieving a direct relationshipwith end users of our products and services. The Wholesale division comprisesour call termination business and our VoIP product and services suite. TheRetail division, whose strategy is to acquire cash generative businesses,comprises the Company's direct to end user initiatives. We are pleased to reportthat the delivery of the Retail strategy is well under way, with the first twoacquisitions having already been made and integrated. Spiritel Retail We were delighted to deliver on our acquisition strategy soon after stating ourintention to build a Retail division through the purchase of companies that giveus a direct relationship with the end users of our products and services. InSeptember we announced the acquisition of CallPlan Ltd, a sales agency thatmarkets products and services in the UK on behalf of Australia's Telstra, one ofthe world's largest telecommunications companies. In October we acquired thehighly profitable Networks Direct (UK) Ltd, which provides voice and dataservices to more than 300 SMEs across the UK. These earnings-enhancingacquisitions made only a small contribution in the period under review but willmake their first full six month contribution in the second half. We continue toreview further acquisition opportunities and look forward to providing a furtherupdate in due course. Spiritel Wholesale During the period, and after the period end, we continued to provide wholesaleservices to most of the leading fixed line telcos in the UK and we were pleasedto add a significant new customer during the period. The great majority of ourrevenues in the period derived from our Wholesale business, which experiencedpricing pressure in common with industry peers. Post the period end there hasbeen some improvement in the Wholesale trading environment, including an easingof pressure on termination margins. Also, post the period end, we signed acontract with a major UK reseller in respect of our leading-edge VoIP productsuite. 118 918 In partnership with Oxfam, Spiritel launched the 118 918 directory enquiriesservice towards the end of last year. The service is priced at the same level asthe UK's dominant directory services with the unique feature that 9p from everycall goes to Oxfam. People In April 2006 we were delighted to welcome Steven Maine, a former ChiefExecutive Officer of Kingston Communications plc, to the Board as aNon-Executive Director. In December 2006 Steven, whose vast experience of thetelecoms sector has been of great value to the development of the Company,became Deputy Chairman. In October a co-founder of the Company, JohnVergopoulos, stood down from the Board to pursue other business interestsprimarily in the private sector. Financials Turnover in the period was £6.84m (H1 2005: £8.12m) of which £120,000 (H1 2005:nil) arose from the two acquisitions towards the period end of Callplan andNetworks Direct. The pre-tax loss was £1.14m (H1 2005: £0.23m), reflectingrestructuring costs and pressure on wholesale prices. The loss per share was0.57p (H1 2005: 0.17p). Outlook We are delighted by the progress made in the first half, which has allowed us toenter the second half in a much stronger position. Our cash generativeacquisitions completed at the end of the first half will make a fullcontribution during the second half. We continue to evaluate further potentialacquisition candidates and have been impressed by the opportunities available tous. The current half has started well with the Company trading at an underlyingEBITDA positive level during the first two months giving us confidence for theremainder of the year. Lord St John of Bletso Alastair MillsChairman Chief Executive 29 January 2007 SPIRITEL PLC CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT For the six months ended 31 October 2006 Restated Six months six months ended 31 ended 31 October 2006 October 2005 Unaudited Unaudited Note £'000 £'000 Turnover - continuing operations 6,717 8,117 - acquisitions 120 - 6,837 8,117 Cost of sales (6,173) (6,885) Gross profit 664 1,232 Administrative expenses (1,695) (1,398) Operating (loss)/profitContinuing operations (1,067) (166)Acquisitions 36 - (1,031) (166) Share of operating loss of joint venture (18) - (1,049) (166) Net interest payable (90) (63) Loss on ordinary activities before taxation (1,139) (229) Tax on loss on ordinary activities - (11) Loss on ordinary activities after taxation (1,139) (240) Minority interest 134 - Loss for the financial period (1,005) (240) Loss per ordinary share in pence 4 (0.57) (0.17) There were no recognised gains or losses other than the loss for the financialperiod. SPIRITEL PLC CONSOLIDATED SUMMARISED BALANCE SHEET AT 31 OCTOBER 2006 31 October Restated 31 2006 October 2005 Unaudited Unaudited £'000 £'000 Fixed assetsTangible Assets 748 944Intangible Assets 2,457 - 3,205 944 Current assetsDebtors 1,059 954Cash at bank and in hand 252 92 1,311 1,046 Creditors: amounts falling due within one year (4,052) (1,359) Net current liabilities (2,741) (313) Total assets less current liabilities 464 631 Creditors: amounts falling due after more than one year 4,695 6,757 Provision for liabilities 18 84 4,713 6,841Capital and reservesCalled up share capital 2,195 1,378Share premium account 3,630 1,128Reverse acquisition reserve (5,763) (5,763)Profit and loss account (4,311) (2,953)Shareholders' deficit (4,249) (6,210) 464 631 SPIRITEL PLC CONSOLIDATED SUMMARISED CASHFLOW STATEMENT For the six months ended 31 October 2006 Restated Six months ended six months ended 31 October 2006 31 October 2005 Unaudited Unaudited £'000 £'000 Net cash (outflow) / inflow from operating activities (Note 6) (755) 258 Returns on investments and servicing of finance 2 - Taxation 17 (120) Capital expenditure (76) (496) Acquisitions and disposals (907) - Financing 1,873 20 Increase / (decrease) in cash (Note 7) 154 (338) NOTES TO THE INTERIM FINANCIAL INFORMATION For the six months ended 31 October 2006 1). INTERIM FINANCIAL INFORMATION The interim financial information covers the six months ended 31 October 2006,is unaudited and does not constitute statutory financial statements. 2). PRINCIPAL ACCOUNTING POLICIES The interim financial information has been prepared using the same accountingpolicies as set out in the financial statements for the year ended 30 April2006, except for the mandatory adoption of FRS 20 "Share based payments" and FRS26 "Financial Instruments - measurement". FRS 20 - Share based payments FRS 20 requires the recognition of a charge for share based payment transactionswhich includes share options. The charge to the profit and loss account in thesix months ended 31 October 2006 was £39,000. The adoption of FRS 20 has alsoresulted in a prior period adjustment in respect of the comparative six monthperiod ended 31 October 2005. The charge to the profit and loss account for thesix month period to 31 October 2005 was £20,000 and the comparative figures havebeen restated accordingly. FRS 26 - Financial instruments - measurement The directors do not consider that the adoption of FRS 26 has had a materialimpact on the financial statements of the group, and hence no prior periodadjustment has been made. 3). DIVIDENDS The Directors do not recommend the payment of a dividend. 4). LOSS PER ORDINARY SHARE The loss per share is based on the equity losses of £1,005,000 (2005: loss£240,000) and 176,477,807 (2005: 137,819,803) ordinary shares of 1p each, beingthe weighted average number of ordinary shares in issue during the period. NOTES TO THE INTERIM FINANCIAL INFORMATION (CONTINUED) For the six months ended 31 October 2006 5). PREFERENCE SHARES 4,100,000 redeemable preference shares of £1 each have been classified asfinancial liabilities and included within Creditors: amounts falling due aftermore than one year (2005: £4,100,000). 6). NET CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES Restated Six months ended six months ended 31 October 2006 31 October 2005 Unaudited Unaudited £'000 £'000 Operating loss (1,031) (166)Depreciation & amortisation 225 191Decrease / (increase) in debtors 132 (20)(Decrease) / increase in creditors (81) 253Net cash (outflow) / inflow from operating activities (755) 258 7). RECONCILIATION OF NET CASH FLOW TO MOVEMENT OF NET DEBT Six months ended Six months ended 31 October 2006 31 October 2005 Unaudited Unaudited £'000 £'000 Increase / (decrease) in cash in the financial period 154 (338)Loans received (1,250) -Other non-cash items (92) (63)Movement in net debt in the financial period (1,188) (401) Net debt at 1 May 2006 (5,046) (6,264)Net debt at 31 October 2006 (6,234) (6,665) This information is provided by RNS The company news service from the London Stock Exchange