RNS Number:0576M
i-documentsystems Group PLC
09 June 2003
9 June 2003
i-documentsystems group plc
Interim Results for the six months ended 30 April 2003
Highlights
* Turnover up 64% to #1.90 million (2002: #1.16 million)
* Loss before tax of #0.46 million (2002: #0.56 million)
* Loss per share reduced to 0.33 pence (2002: 0.46 pence)
* Cash of #2.15 million as at 30 April 2003 (2002: #1.94 million)
* Recurring annualised revenue #1.51 million (2002: #0.32 million)
* Gross margin of 87% (2002: 75%)
* 117 Local Authority customers (2002: 40 Local Authority customers)
* 11 UKPlanning customers as at 30 April 2003 (2002: 1 UKPlanning customer)
* Pipeline opportunities continue to increase both in quantity and quality
* Strengthened market position by winning both new customers and expanding
horizontally within Local Authorities
* On track to achieve profitability on a regular monthly basis by the year
end in October 2003
For further information:
John Wisbey, Chairman i-documentsystems group plc 020 7427 0660
Andrew Fraser, CEO i-documentsystems group plc 020 7427 0660
Tim Bowen, CFO and COO i-documentsystems group plc 020 7427 0660
Richard Fallowfield/Nadja Vetter CardewChancery 020 7930 0777
Chairman's Statement
For the six months ended 30 April 2003
"I am pleased to announce the results for the six months ending 30 April 2003
which were in line with expectations.
"Turnover increased by 64% to #1.90 million (2002: #1.16 million). The Group
incurred a loss of #0.46 million (2002: #0.56 million), which equates to a loss
per share of 0.33 pence (2002: 0.46 pence). The gross margin improved to 87%
(2002: 75%) for the period. Net cash as at 30 April 2003 amounted to #2.15
million compared with #1.94 million at 30 April 2002.
"In line with stated policy, earnings for the foreseeable future will be
re-invested to finance the growth of the Group's business. The Directors
therefore do not recommend the payment of a dividend.
"All three divisions within the Group have made considerable progress during the
period. Our software offerings continue to be rolled out across new departments
of existing Local Authority customers as well as being supplied to new Councils.
Our principal managed service offering, UKPlanning, is now attracting
considerable interest. After more than two years in development we now have 11
contracted Local Authorities using the service compared with only one a year
ago. The considerable investment the Group has made in UKPlanning now appears to
be fully justified as recurring revenues increase from the early adopters. The
Information Services division has been fully integrated into the Group and the
combination of information and software is attracting a significant level of
interest in the form of projects for Central Government bodies.
"Overall, we believe that the Group has delivered a highly creditable
performance in market conditions that have been challenging for so many other
firms. Our clear focus on our chosen market sectors has resulted in the Group
emerging as one of the UK's major e-Government solution providers. The Group
supplies products and services to 117 UK Local Authorities and now has several
examples of Councils rolling out our software as a corporate solution.
"The pipeline and order book continues to grow and the Group is on track to
achieve its stated aim of achieving profitability on a regular monthly basis by
the financial year end in October 2003.
"The Board remains committed to maximising shareholder value by achieving
ongoing profitability through increasing market share, both organically and by
acquisition. The sustained efforts of our team, together with a heightened brand
awareness, have further developed the strong pipeline of opportunities. I would
again like to take this opportunity to thank all of our staff for their ongoing
dedication and hard work."
Chief Executive's Report
For the six months ended 30 April 2003
I am pleased to report that i-documentsystems group plc (IDOX) has continued to
meet its targets for the six month period ended 30 April 2003. The Group has
successfully built upon its ability to deliver effective business solutions to
the Local Authority marketplace and is well placed to reap the rewards of the
considerable investment made in their development.
Operating Review
The Group's business now comprises three core elements: Software, Managed
Services and Information Services. The re-branding of the entire product range
under the concept of "information into intelligence" was completed during the
period under review.
Early indications would suggest that this concept is being well received amongst
the Group's target market of UK Local Authorities as well as other Central
Government bodies. Recent contracts with Futureskills Scotland (part of Scottish
Enterprise) and the Neighbourhood Renewal Unit (part of the Office of the Deputy
Prime Minister) are examples of how the Group's information resource have been
exploited into both project revenue and recurring income streams.
As the product range becomes more diverse and the scale of contracts from
existing customers increase, the number of new Local Authorities contracted in a
period is no longer the prime measure of the Group's performance. The Group's
remit has broadened from originally only providing solutions to planning
departments, to supplying many other Council departments such as social
services, education, trading standards and the chief executive's office, thereby
deriving additional rewards from the existing customer base. IDOX is also
competing in revenues and benefits departments, where vendors of transactional
systems have traditionally enjoyed a strong foothold. The effect of now having
solutions installed in multiple departments within a typical Local Authority is
that IDOX is now being awarded larger "corporate solution" type tenders.
In March 2003, IDOX finalised a contract with the Borough of Poole for the
supply, installation and implementation of a corporate e-Government solution.
The speed and breadth of implementation could mean that Poole will be the first
Local Authority in the UK to provide all its services online. The contract is
for an integrated system which brings together electronic online forms, document
management and workflow at the core of office automation. It also has knowledge
and content management, with information being supplied from our Information
Service, all accessed through a web browser. The Group believes this is a unique
combination in the Local Authority arena.
Another major success during this period was the winning of the Corporation of
London contract in conjunction with our partner ESRI/CAPS. This win further
strengthens our London base with more than 40% of Councils within the Greater
London area now using our software or services.
The IDOX offering, a unique blend of software and content, has earned the Group
recognition as a major player within the Local Government marketplace. This is
evidenced by the Group's increasing success and appearance on Local Authority
tender shortlists.
Whilst the number of firms attempting to enter the Local Authority marketplace
has increased of late, the only real impact on the Group has been that Councils
have taken longer to evaluate tenders as a result of an increase in volume of
responses. Substantial barriers to entry into this marketplace remain primarily
due to the necessity of having suitable reference sites.
Although the sales lead time in the Local Authority marketplace continues to be
lengthy, Local Authorities are under considerable pressure to meet the
Government's target of improving the delivery of services through the use of
electronic technology by 2005.
Managed Services
Our principal managed service offering, UKPlanning, is currently attracting an
increasing number of new customers following a relatively slow initial response.
During the period under review, new Local Authority customers include Watford,
Ashford, Hastings, Shepway, Swale and Thanet. This brings the total number of
UKPlanning clients to 11.
The technology developed for UKPlanning has been incorporated into the software
offering, ensuring standardisation of delivery for all customers. Prospects for
UKPlanning remain positive as the benefits and cost savings of the service
become evident to customers. Whilst the upfront revenues gained from UKPlanning
sales are far lower than for our traditional software sales, the UKPlanning
model provides strong recurring revenue streams.
Strategy and Alliances
The Group will continue to seek strategic partnerships, where appropriate, in
order to widen its offering to other markets, Local Authority departments and
Central Government. To date, IDOX has entered into such partnerships with HBS,
MVM Consultants (a subsidiary of AWG), and BT Syntegra. It has also reached a
three-year distribution agreement with Serco for its IDOX Software products and
services. Discussions are regularly held with other potential partners.
Product Development
IDOX has continued to make enhancements across its entire product range to meet
the needs of its customers; this process has been achieved in part through the
commitment of a well-supported user group.
The new Process Workflow module has been enhanced with specific workflow
processes being built to meet the demands of differing Local Authority
departments. In particular, significant progress has been made within the
revenues and benefits area where improved functionality has enabled the Group to
tender for and win corporate solution rollouts.
The demand for electronic forms continues to increase. IDOX has developed a
substantially more sophisticated solution with the ability to validate converted
CAD (computer aided design) files visually, when forms are submitted online.
This is a real-time conversion allowing an applicant to view the submitted
drawing in CAD form and see the conversion in a viewable format. The number of
electronic forms developed for Councils has now increased significantly.
The development of the new Records Management module is on schedule. This
product is necessary to enable IDOX Software to meet the Public Records Office
2002 specification which is fast becoming a pre-requisite to conforming with the
requirements of the Freedom of Information Act and other legislation with which
our customers must comply.
The integration of the Group's software skills into its information projects has
proved successful, particularly for creating structured databases used for
information sharing across the internet. This facility was a development
requirement for our own Information Services division. It will be of significant
benefit for external projects such as Futureskills and the Government Office of
the North East. It is believed that this will enhance IDOX's offering to its
existing Information Service subscribers and particularly to those Local
Authorities who wish to improve the dissemination of relevant content to their
citizens through this type of technology. This facility is a key differentiator
in our chosen market.
People
Employees totalled 78 at 30 April 2003, compared with 80 at 31 October 2002 and
47 at 30 April 2002. The Group now possesses a team and infrastructure capable
of delivering and managing rapid business growth. The anticipated higher revenue
flows for the second half of the financial year can be accommodated within a
stable cost base. The staff at IDOX have all worked hard to maintain the Group's
high reputation in the marketplace and deserve considerable recognition and
thanks, both in London and Glasgow, for the achievements that have been
recorded. This is against a backdrop of tight internal financial control.
The Group received the Investor in People award in March 2003, having achieved
ISO9001 status last year. The benefit of such accreditations is not only that
they act as a useful audit of our internal policies and procedures, but that
they further enhance our eligibility to participate successfully in the Local
Authority tender process.
Outlook
The results for the six months ended 30 April 2003 were in line with
expectations. The groundwork has been carried out to enable significant organic
revenue growth during the second half of the financial year. This augurs well
for the Group to achieve its stated aim of reaching profitability on a regular
monthly basis by the end of the current financial year.
Consolidated Profit and Loss Account
For the six months ended 30 April 2003
Note 6 months to 30 6 months to 30 12 months to 31
April 2003 April 2002 October 2002
(unaudited) (unaudited) (audited)
# # #
Turnover 1,903,078 1,158,948 3,017,602
External charges -245,344 -291,575 -667,161
1,657,734 867,373 2,350,441
Staff costs -1,554,171 -1,011,130 -2,524,671
Other operating charges -599,813 -450,233 -1,386,671
Operating loss -496,250 -593,990 -1,560,901
Net interest 37,068 34,553 77,428
Loss on ordinary -459,182 -559,437 -1,483,473
activities before taxation
Tax on loss on ordinary
activities 0 0 0
Loss for the period
transferred from reserves -459,182 -559,437 -1,483,473
Loss per share (pence)
Basic and diluted 2 -0.33 -0.46 -1.11
Consolidated Balance Sheet
At 30 April 2003
At At At
30 April 2003 30 April 2002 31 October 2002
(unaudited) (unaudited) (audited)
# # #
Fixed assets
Intangible fixed assets 660,606 696,906
Tangible assets 285,818 142,518 259,727
Investments 28,344 28,344
974,768 142,518 984,977
Current assets
Debtors 1,427,078 1,015,337 1,167,227
Cash at the bank and in hand 2,148,311 1,938,552 2,537,752
3,575,389 2,953,889 3,704,979
Creditors: amounts falling due -2,268,936 -988,758 -1,949,553
within one year
Net current assets 1,306,453 1,965,131 1,755,426
Creditors: amounts falling due
after more than one year -40,000 -40,000
Net assets 2,241,221 2,107,649 2,700,403
Capital and reserves
Called up share capital 1,408,039 1,283,172 1,408,039
Deferred share capital 0 1,112,014 1,112,014
Share premium account 4,098,538 2,789,389 4,098,538
Other reserves 2,406,759 1,239,471 1,294,745
Profit and loss account -5,672,115 -4,316,397 -5,212,933
Equity shareholders' funds 2,241,221 2,107,649 2,700,403
Consolidated Cash Flow Statement
For the six months ended 30 April 2003
Note 6 months to 30 6 months to 30 12 months to 31
April 2003 April 2002 October 2002
(unaudited) (unaudited) (audited)
# # #
Net cash outflow from 3 -295,756 -389,540 -843,324
operating activities
Returns on investment and servicing
of finance
Interest received 36,031 32,291 77,143
Net cash inflow from
returns on
investments and servicing
of finance 36,031 32,291 77,143
Capital expenditure and
financial investment
Purchase of tangible fixed -129,716 -75,957 -236,377
assets
Sale of tangible fixed 0 0 0
assets
Purchase of investment 0 0 -28,344
Net cash outflow from -129,716 -75,957 -264,721
capital expenditure
and financial investment
Acquisitions
Purchase of trade and assets 0 0 -418,601
Net cash balances acquired 0 0 181,481
with trade and assets
Net cash outflow from 0 0 -237,120
acquisitions
Financing
Issue of share capital 0 0 1,434,016
Net cash inflow from 0 0 1,434,016
financing
(Decrease)/increase in 4 -389,441 -433,206 165,994
cash
Notes on the Interim Report
For the six months ended 30 April 2003
1 BASIS OF PREPARATION
The interim financial information has been prepared in accordance with
applicable United Kingdom accounting standards and under the historical cost
convention. The principal accounting policies of the Group are set out in the
Group's 2002 annual report and financial statements. The policies remain as
stated in the annual report for the year ended 31 October 2002. At the Annual
General Meeting held on 31 January 2003 resolutions were passed permitting the
Company to buy back all the deferred ordinary shares and cancel them from its
issued share capital. This has now been completed. The financial information set
out in this report does not constitute statutory accounts as defined in section
240 of the Companies Act 1985. The figures for the year ended 31 October 2002
have been extracted from the statutory accounts, which have been filed with the
Registrar of Companies. The auditors' report on those financial statements was
unqualified and did not contain a statement under section 237(2) of the
Companies Act 1985.
The interim financial statements have been reviewed by the company's auditors. A
copy of the auditors' review report is attached to the Interim Report.
2 LOSS PER SHARE
The loss per share is calculated by reference to the loss attributable to
ordinary shareholders divided by the weighted average number of shares in issue
during each period, as follows:
6 months to 6 months to 12 months to
30 April 2003 30 April 2002 31 October 2002
(unaudited) (unaudited) (audited)
# # #
Loss for the period (#) -459,182 -559,437 -1,483,473
Weighted average numbers of 140,470,273 122,139,763 133,976,939
shares in issue
Loss per share (pence) -0.33 -0.46 -1.11
The deferred ordinary shares and options are anti dilutive under FRS 14.
3 NET CASH OUTFLOW FROM OPERATING ACTIVITIES
6 months to 6 months to 12 months to
30 April 2003 30 April 2002 31 October 2002
(unaudited) (unaudited) (audited)
# # #
Operating loss -496,250 -593,990 -1,560,901
Depreciation 103,625 57,533 150,029
Goodwill amortisation 36,300 0 30,250
Other non cash items 0 0 27,500
Increase in debtors -258,814 -215,979 -14,150
Increase in creditors 319,383 362,896 523,948
Net cash outflow from -295,756 -389,540 -843,324
operating activities
4 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
6 months to 6 months to 12 months to
30 April 2003 30 April 2002 31 October 2002
(unaudited) (unaudited) (audited)
# # #
(Decrease)/increase in cash in -389,441 -433,206 165,994
the period, being movement in
net funds in the period
Net funds at 1 November 2002 2,537,752 2,371,758 2,371,758
Net funds at 30 April 2003 2,148,311 1,938,552 2,537,752
Company Information
i-documentsystems group plc is an innovative provider of public sector
information, e-Government software and information management solutions to Local
Government. The Group is ideally suited to deliver on the e-Government
requirement, under which the Government has set targets for Local Authorities to
improve the delivery of services through the use of technology by 2005. The
Group's products and services have been specifically developed to enable Local
Authorities to meet their targets. i-documentsystems has a leading position in
putting the Local Government planning process onto the internet and is
experiencing growth in delivering other services electronically, both in the
public and private sectors. The Group was successfully admitted to the
Alternative Investment Market of the London Stock Exchange in December 2000.
(Stock ticker code: IDOX).
Products and Services
More and more information is being produced. Busy people are overwhelmed with
paper and the daunting choice of information sources, not least the internet.
For most of us, time seems to be an increasingly scarce resource.
i-documentsystems has a range of products that provide information in a format
that is useful and succinct, as well as the software and services to handle both
external and internal information within an organisation.
IDOX Software (previously known as Image-Gen) is an innovative suite of web
applications that has been designed, using the very latest technologies, to
deliver platform-independent solutions for document management and workflow with
proven content management, records management and knowledge management
capabilities. Stored information can be retrieved via a standard web browser on
a PC, PDA or even interactive TV. IDOX Software has the facility to handle all
types of documentation including multimedia (voice, video, photographs),
electronic documents and email, or scanned images from paper. More recently
electronic forms have also been developed. The workflow module provides two
options - people-orientated and process-driven workflow. People-orientated
workflow distributes information and documents around an organisation on a
people-driven basis, mimicking the way in which paper would normally be
distributed and actioned. It also tracks, controls and monitors the progress of
the information. Process-driven is the more traditional style of workflow, with
mapped and predetermined distribution of documentation and tasks around an
organisation. The XML forms and XML server components allow end-to-end
integration of data from the internet.
Included with the suite of software is access to the IDOX Information Service -
a library and information service built up over 25 years. This is believed to be
the most comprehensive information service on Local Government matters in the UK
including economic development, education, housing, planning, transport and
social services. Around 500 journals and 100 other sources of materials are
sifted through on a daily basis, both in hard copy and electronic format, with
the most useful and relevant material being identified for extraction. The key
information is then abstracted and recorded in a database for access by members.
Organisations are then able to ensure their busy executives are kept abreast of
the latest thinking and legislation.
A unique example of the benefits that can be gained from bringing information
and the software together is the UKPlanning managed service. This is the UK's
first interactive planning service; integrating information with software to
facilitate the processing of both paper and online planning applications. The
aim is to meet the many different information needs of citizens, the broader
community and all those participating in the planning process. A citizen can
submit and pay for an application online, comment on or track the progress of a
neighbour's application or ask detailed questions about the planning process.
This reduces the administration burden on the Council through the provision of
an outsourced service which is specifically designed to save time and money and
improve the planning process.
This information is provided by RNS
The company news service from the London Stock Exchange
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