RNS Number:8917P
Atlantic Global PLC
18 September 2003
For Immediate Release 18 September 2003
ATLANTIC GLOBAL PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2003
Atlantic Global Plc, ("Atlantic Global" or "the Company"), the AIM listed
specialist developer of business and resource management software applications
to a broad range of customers, announces interim results for the six months
ended 30 June 2003.
In his statement to shareholders, Non-executive Chairman, Adrian Bradshaw said:
"The results demonstrate further organic growth and business development,
notwithstanding the Information Technology sector in general has continued to
experience difficult trading conditions. The period under review has in fact
been the most rewarding in the company's history in terms of successful product
development, with six business management products available to our customers,
including our new flagship, Corporate Vision."
Key points: Financial
Six months Six months Year
ended ended ended
30 June 2003 30 June 2002 31 Dec 2002
#'000 #'000 #'000
Sales 907 860 1,551
Operating profit before
goodwill and exceptional
costs
288 284 390
Profit before tax 231 230 235
Free cash flow 101 (18) 79
Net Cash Balance 1, 884 1,800 1, 897
Adjusted earnings per share 1.01 pence 1.03 pence 1.60 pence
Dividend payable per share - - 0.5 pence
Key points: Operating
* New software released during first half include Adeo 9 in April which
includes two new modules, Contractor Management and Risk Management
* Successful development of Corporate Vision, a generic resource,
organisation planning and milestone management tool developed in conjunction
with Pfizer and Norwich Union. First contract already signed with Norwich Union.
* Continuing investment in R&D of new software products
* Blue-chip client base further expanded during period: new contracts
awarded by Telewest Communications, Aspect Communications, NEC Technologies and
Atlan.
* Recent investment in sales and marketing has produced record new
business enquiries
* Total number of supported seats at 30 June 2003 stood at 21,000
Outlook
Commenting on current trading and prospects, Mr. Bradshaw added
"The level of sales interest in our software is currently at the highest level
in the Company's history and trading since the end of June 2003 has continued
successfully. We have focused on software product development and product launch
activity in the first half of the year. Related product sales are therefore
expected to impact in the second half. Accordingly we are looking forward to a
higher profit level in the second part of the year and beyond."
-ends-
Enquiries:
Eugene Blaine, Managing Director, Atlantic Global plc:
Rupert Hutton, Finance Director, Atlantic Global plc
Today only 020 7786 9600; Thereafter 01274 863300
www.atlantic-global.co.uk
Paul Vann, Binns & Co PR Ltd 020 7786 9600
Atlantic Global PLC
Chairman's Statement - Interim Report 2003
1. Introduction
I am very pleased to report on the Group's interim results for the six-month
period ended 30 June 2003, my first Statement as your recently appointed
Non-executive Chairman. The results demonstrate further organic growth and
business development, notwithstanding the Information Technology sector in
general has continued to experience difficult trading conditions. The period
under review has in fact been the most rewarding in the company's history in
terms of successful product development, with six business management products
now available to our customers, including our new "flagship", Corporate Vision,
further details of which are given in the Operating Review section of this
report. The response from our existing customer base to our Corporate Vision
product has confirmed our view that it has the potential to revolutionise and
deliver major efficiency savings to large corporations.
2. Financial Review
Turnover for the period increased by 5.5% to #907,000 compared to #860,000 in
the first six months of 2002. Operating profit before amortisation of goodwill
rose slightly to #288,000, compared to #284,000 in the first six months of 2002
while profit before tax for the period was unchanged at #231,000 (2002:
#230,000).
Earnings per share (before amortisation of goodwill) of 1.01p were generated for
the six-month period, (2002:1.03p).
Profit growth has been constrained in the first half in part due to a doubling
of our marketing expenditure to #85,000 compared with #43,000 for the equivalent
period in 2002 and also by an increase in our research and development
expenditure of #16,000. However, the financial benefits of these investments
should be felt in the second half of the year and beyond.
At 30 June 2003 the Group had net cash resources of #1,884,000, being cash at
bank and on deposit (2002: #1,800,000). The free cash flow since the start of
the year has been #101,000 confirming the cash generative nature of the
business. Net cash has continued to increase since 30 June 2003 and as at 1
September 2003 stood at #2,075,000.
3. Dividend
The Directors intend to continue to pursue a progressive dividend policy. At the
present time, they believe it would be prudent to recommend dividend payments at
the year-end and therefore no interim dividend is being declared.
4. Operating Review
During the period the company has made significant progress in many areas,
notably the following:
*The release of the Adeo 9 software at the beginning of April 2003,
providing significant improvement and updates to the functionality of our
Adeo suite (the core product of the business). A significantly greater
amount of the software's administration has been transferred to web-based
technology, increasing its flexibility. Adeo 9 also now includes two new
modules, Contractor Management and Risk Management.
*The Contractor Management module was based on two major existing
installations, which have been enhanced and further developed to include
many additional features. All of these improvements are now available
through our Web enabled Software. This module has already been contracted
for by Norwich Union in June 2003.
The Risk Management module has been developed in consultation with LogicaCMG and
Barclays Bank Plc and has produced a generic risk management module within Adeo
that is capable of being modelled and used to manage risk at all levels in any
organisation.
*The development of Corporate Vision which is a generic resource,
organisation planning and milestone management tool. This system is capable,
through the provision and sharing of real time management information, of
changing how an organisation operates and makes decisions. Corporate Vision
has been developed in conjunction with Pfizer and Norwich Union. When linked
to the other core Adeo modules, an organisation's people, milestones and
costs will be clearly visible enabling day to day management decisions to be
made to ensure the best use of scarce resources. We have already won a major
contract for Corporate Vision from Norwich Union Life Services in June 2003.
*Continued investment in the research and development of our software
products, expenditure on which amounted to #136,000 during the period (2002:
#120,000).
*Our blue chip client base has been further expanded during the period
with new contracts including:
- Telewest Communications
- Aspect Communications
- Echostar International Corporation
- Atlan
- NEC Technologies (France and Portugal)
- Dunnhumby
*The recruitment of the new sales and marketing personnel is starting to
produce results with improved focus and clearer messaging resulting in
record interest being shown in our software products. This follows our
recent and very successful inaugural Adeo User Group Seminar, held in
London, hosted by the Company and attended by 64 senior managers from 37 of
our existing and prospective customers. The objective of the seminar was to
provide Adeo users with an insight into different customer experiences, the
future direction of Adeo, and to introduce them to Adeo Corporate Vision.
The event was designed to be factual, informative and, above all, to deliver
a platform for customers to successfully network and discuss their
experiences. Guest speakers included representatives from Norwich Union,
Virgin Mobile and Aspect Communications, all of whom provided excellent
presentations provoking keen interest and dialogue from the audience.
*In June 2003 the Company was successfully reassessed for its retention of
the Investors in People Standard with very impressive results.
*The Group's management expertise was also independently recognised when
Eugene Blaine, Group Managing Director, was nominated as a Northern Regional
Finalist in the Entrepreneur of the Year Awards 2003, organised by Ernst and
Young.
5. Board Changes
In June 2003, the Board announced that Michael Langmore, who had been
Non-executive Chairman of the Company since its flotation in June 2001, had
resigned to pursue other business activities. The Board wishes him well in his
ongoing commitments. The Company is in the process of recruiting a new
Non-executive Chairman, with relevant software industry experience, and hopes to
announce an appointment in the near future. Meanwhile, as announced, I will
continue to temporarily fulfil the role.
6. Outlook
We have focused on software product development and product launch activity in
the first half of the year. Related product sales are therefore expected to
impact in the second half. Accordingly we are looking forward to a higher profit
level in the second part of the year and beyond.
With the introduction of Corporate Vision, which is specifically targeted
towards very large blue-chip companies, we would expect that the average size of
future contracts will be larger and potentially less evenly spread than those
won in the past.
The level of sales interest in our software is currently at the highest level in
the Company's history and trading since the end of June 2003 has continued
successfully. In particular, we expect to sign contracts with a number of new
and existing customers in the near future. The total number of supported seats
of our software as at 30 June 2003 was 21,000.
Once again, it is a pleasure to be able to congratulate our people within the
Company for the continued progress, but special appreciation should be shown to
the whole of the Software Development Department for the successful creation of
the new and very sophisticated products that we have available for selling into
what is becoming for us a large and expanding market place.
The Directors believe that the Company is very well placed to increase its
market share, and that it has a committed and highly skilled team with high
quality and very competitive software products which deliver innovative business
solutions adding considerable value to our customers' organisations. Following
the recent developments within the Company, the directors believe that its
growth potential has been enhanced and that Atlantic Global can expect growth in
the years ahead.
Your Board looks forward to announcing further satisfactory progress for the
full year.
Adrian Bradshaw
Chairman
18 September 2003
Consolidated profit and loss account
for the six months ended 30 June 2003
Six months to Six months to Year ended 31
30 June 30 June December 2002
2003 2002
Notes
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Turnover 907 860 1,551
Cost of sales (258) (287) (624)
----------- ----------- -----------
Gross profit 649 573 927
Administration and (452) (380) (763)
establishment expenses
----------------------- ------- --------- --------- ---------
Operating profit before
goodwill amortisation
and exceptional costs
288 284 390
Goodwill amortisation (91) (91) (181)
Exceptional costs - - (45)
----------------------- ------- --------- --------- ---------
----------- ----------- -----------
Operating profit 197 193 164
Interest receivable 34 37 71
----------- ----------- -----------
Profit on ordinary 231 230 235
activities before
taxation
Tax on profit on 3 (92) (96) (104)
ordinary activities
----------- ----------- -----------
Profit on ordinary 139 134 131
activities after
taxation
Dividends proposed - - (114)
----------- ----------- -----------
Retained profit for the 139 134 17
period
====== ====== ======
Adjusted earnings per 4 1.01p 1.03p 1.60p
share
Basic earnings per 4 0.61p 0.61p 0.59p
share
Diluted earnings per 4 0.56p 0.57p 0.56p
share
Consolidated balance sheet
as at 30 June 2003
As at As at As at
30 June 30 June 31 December
Notes 2003 2002 2002
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed assets
Tangible assets 61 64 63
Goodwill 3,244 3,550 3,335
----------- ----------- -----------
3,305 3,614 3,398
====== ====== ======
Current assets
Debtors 778 592 365
Cash at bank and in hand 1,884 1,800 1,897
----------- ----------- -----------
2,662 2,392 2,262
Creditors: amounts falling
due within one year
(653) (531) (485)
----------- ----------- -----------
Net current assets 2,009 1,861 1,777
----------- ----------- -----------
Net assets 5,314 5,475 5,175
====== ====== ======
Capital and reserves ----------- ----------- -----------
Called up share capital 1,137 1,137 1,137
Share premium account 1,545 1,545 1,545
Shares to be issued 6 - 87 -
reserve
Other reserves 2,538 2,538 2,538
Profit and loss account 94 168 (45)
----------- ----------- -----------
Shareholders' funds 5,314 5,475 5,175
equity
====== ====== ======
Summarised group cash flow statement
for the six months ended 30 June 2003
Six months to Six months to Year ended
30 June 30 June 2002
2003 (Unaudited) 31 December
Notes (Unaudited) 2002
(Audited)
#'000 #'000 #'000
Net cash (outflow)/inflow
from operating
activities
5 80 (31) 158
Return on investment 34 39 72
Taxation - - (104)
Capital expenditure (13) (26) (47)
---------- ---------- ----------
Free cash flow 101 (18) 79
Acquisitions and
disposals - 2001 deferred
consideration paid
- (225) (225)
Equity dividends paid (114) (104) (104)
====== ====== ======
Cash outflow before
management of liquid
resources and financing
(13) (347) (250)
====== ====== ======
Management of liquid - 250 250
resources and financing
Financing - - -
---------- ---------- ----------
Net (decrease) in cash in (13) (97) -
the period
====== ====== ======
Notes to the interim report
1. The interim financial statements for the six months ended 30 June 2003 have
been prepared using accounting policies consistent with those set out in the
annual report and accounts of Atlantic Global Plc for the year ended 31
December 2002.
2. The interim financial information for the six months ended 30 June 2003 is
unaudited and does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985. The information has been reviewed by
the Company's auditors.
3. The tax charge for the period is based on the anticipated effective tax rate
for the year to 31 December 2003.
4. Earnings per share
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Profit after tax 139 134 131
Adjustments
- Goodwill amortisation 91 91 181
- Exceptional costs - - 45
---------- ---------- ----------
Adjusted profits 230 225 357
====== ====== ======
Number Number Number
000 000 000
Weighted average number of shares in
issue
22,747 21,806 22,281
Dilutive effect of maximum deferred
consideration shares
- 233 -
Options and warrants 1,976 1,277 1,298
---------- ---------- ----------
Diluted number of shares 24,723 23,316 23,579
====== ====== ======
Basic earnings per share
(based on profit after tax) 0.61p 0.61p 0.59p
Diluted earnings per share
(based on profit after tax) 0.56p 0.57p 0.56p
Adjusted earnings per share
(based on adjusted profits) 1.01p 1.03p 1.60p
5. Cash inflow from operating activities
Six months Six months Year ended
ending ending
30 June 30 June 31 December
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Operating profit before goodwill
amortisation and exceptional
costs
288 284 390
Goodwill amortisation (91) (91) (181)
Exceptional costs - - (45)
---------- ---------- ----------
Operating profit 197 193 164
Depreciation 15 14 29
Loss on disposal of fixed assets - - 6
Goodwill amortisation 91 91 181
(Increase) in debtors (258) (265) (36)
Increase/(decrease) in creditors 35 (64) (186)
---------- ---------- ----------
Net cash (outflow)/inflow from
operating activities
80 (31) 158
====== ====== ======
6. The reported figures for the six months ended 30 June 2002 included an amount
in respect of shares to be issued which it was anticipated would become due
under the terms of the deferred consideration agreement. Due to the level of
performance in the second half of 2002 being lower than anticipated the criteria
for the payment of the deferred consideration were not met and the amounts were
reversed in the reported figures for the year ended 31 December 2002.
7. Copies of this interim report are being sent to all shareholders. Further
copies of this interim report and the Company's annual report to 31 December
2002 are available from:
Mr R Hutton, Finance Director & Company Secretary, Atlantic Global Plc, Maple
House, Woodland Park, Bradford Road, Chain Bar, Cleckheaton, BD19 6BW.
Website: www.atlantic-global.co.uk
email:info@Atlantic-ec.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFVTADIDLIV