RNS Number:9323Y
AttentiV Systems Group PLC
21 May 2004
ATTENTIV SYSTEMS GROUP PLC
INTERIM REPORT FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2004
AttentiV Systems Group plc is a leading developer and supplier of software to
the financial services sector.
HIGHLIGHTS
* Six months turnover up 10.5% to #14.4 million (2003 #13.0 million)
* Operating margin increased to 10.7% (2003 1.6%)
* Six months operating profit increased to #1.5 million (2003 #0.2
million)
* #1.6 million operating cash flow generated during the period (2003 #0.2
million)
* Earnings per share advanced by 2.1p to 2.5p
* Successful flotation on AIM raising #3.7 million net for AttentiV
Commenting on the results, Peter Bertram, Chairman, said "I am pleased to report
on a period where the business has consolidated its position of strength as the
premier software provider in the UK mortgage market and undertaken a successful
flotation on AIM. These achievements and, in particular, the improvement in
operating margin and significant new sales wins, positions the Group for future
profitable organic growth."
ENQUIRIES
AttentiV Systems Group plc Tel: 01582 863388
David Webber, Chief Executive
Philip Wood, Finance Director
ICIS Limited Tel: 0207 628 1114 or 07802 442486
Tom Moriarty
Archie Berens
WEBSITE
A presentation in respect of the interim report for the period ended 31 March
2004 will be posted to the investor section of the AttentiV website (
www.attentiv.com) at 9.00 a.m. on 21 May 2004.
CHAIRMAN'S STATEMENT
INTRODUCTION
This is the first financial statement published by AttentiV Systems Group plc
since the Group was floated on AIM on 31 March 2004.
On behalf of AttentiV I would like to thank our new shareholders for their
support and we trust they will enjoy a long association with the development of
the Group.
TRADING RESULTS
I am pleased to announce growth in both turnover and profits during the first
six months of the financial year ending 30 September 2004.
Turnover rose to #14.4 million (2003 #13.0 million), an increase of 10.5% over
the same period in the previous year.
Operating profits rose to #1.5 million (2003 #0.2 million) and earnings per
share increased to 2.5p (2003 0.4p).
Operating margins increased to 10.7% from 1.6% in 2003.
The business generated operating cash flow of #1.6 million compared to #0.2
million in the same period of 2003.
The growth in turnover was attributable to the Group continuing to secure new
financial services customers and the contribution from associated implementation
services, support & maintenance revenues and licence fees.
The dividend of #1.3 million declared and paid during the period was made to
Lynx plc the owner of AttentiV prior to the flotation on AIM.
PERFORMANCE REVIEW
The Group's sole trading subsidiary, Lynx Financial Systems Limited, is a
provider of software solutions and associated services to the financial services
sector. Lynx Financial Systems Limited will be re-branded as AttentiV Systems
over the next six months. AttentiV has three offerings:-
Portfolio
Software solutions for organisations offering asset-backed finance products,
personal loans and debt management.
Revenue for the Portfolio product was #1.7 million (2003 #2.9 million).
Since 1 October 2003 #1.1 million (2003 nil) of costs have been included in the
movement of work in progress in respect of the project to develop the European
retailing system for a global motor finance organisation. The work in progress
will be released as a cost within operating charges, along with the associated
revenue and profit, in future periods.
During the period Toyota Financial Services (UK) plc completed the roll out of
the AttentiV motor finance solution across their operations and London Scottish
Bank plc commenced the roll out of the AttentiV personal loan and collection
solution across their UK branches.
Summit
Summit is a software system that supports the selling and administration of
mortgages, loans, savings, current accounts and associated services within the
retail banking sector.
Revenue for the Summit product was #10.1 million (2003 #6.8 million).
During the period Britannia Building Society successfully migrated their 2
million savings accounts and 180 plus branches to the Summit savings and branch
cashiering solution. This follows on from a successful migration of their
mortgage accounts in August 2002.
In a very rapid deployment of under six months Darlington Building Society, who
operate 13 branches and have over 10,000 mortgage customers, have successfully
taken Summit mortgages and application processing live and are well prepared for
the onset of mortgage compliance in autumn of this year.
Following the signing of a contract with The Royal Bank of Scotland plc earlier
in the period, I am pleased to report that the implementation of Summit is
progressing according to plan. On this basis, it is expected that, when all the
mortgage accounts are fully migrated onto Summit during 2005, the bank will be
the largest Summit user with some #35 billion of mortgage assets on the system.
On 10 March 2004 Mortgages plc signed a five-year outsourcing contract with
AttentiV for the Group to provide mortgage processing capability. This project
is planned to commence live use this summer and is progressing well.
Overall, we believe our success in this area is a clear endorsement of Summit,
both in terms of the quality of the product and our service offering.
Tailored Solutions
Revenue for Tailored Solutions was #2.6 million (2003 #3.3 million).
On 31 December 2003 Standard Life Bank Limited successfully completed their
skills transfer from the AttentiV on site team and are now able to maintain the
solution without assistance from AttentiV.
Commencing on 1 January 2004 Intelligent Finance, the HBOS plc internet bank,
commenced a five year support and development agreement for the bank's mortgage,
savings and offsetting systems.
Software licence revenues for the Group increased by 21.4% to #1.7 million (2003
#1.4 million). As at 31 March 2004 the Group has #8.5 million of contracted
licences not booked to revenue.
Services and third party revenues increased to #6.8 million (2003 #5.8 million)
whilst maintenance and outsourcing revenues were #5.9 million (2003 #5.8
million). At 31 March 2004 maintenance and contracted recurring revenues covered
60% of the Group's fixed cost base.
The combination of the high levels of contracted licences not yet booked to
revenue, the maintenance & contracted recurring revenues and the existing client
requirements for AttentiV services, results in 60% of expected revenue for the
year ending 30 September 2005 being identified at 31 March 2004.
DIVIDENDS
As advised in the admission prospectus dated 26 March 2004, it is the intention
of the Board to follow a progressive dividend policy, commencing in respect of
the financial year ended 30 September 2005.
STAFF
AttentiV's business relies on the continued retention, development and
recruitment of staff. The number of employees within the Group rose from 373 at
30 September 2003 to 391 at 31 March 2004 (2003 360) and I would like to take
this opportunity to thank the staff for their commitment and professionalism.
The Group does not plan any significant increase in headcount in the second half
of the financial year as the management continues to focus on increasing
efficiency and productivity within the business. However, the sales function is
to be strengthened with the recruitment of additional experienced resource
focusing on new business sales.
AttentiV has recently recruited Lena Marsh as Head of Human Resources whose
remit is to continue to improve the quality of staff training, recruitment and
retention.
OUTLOOK
Trading since 31 March 2004 has continued in line with our business plans and
the Board continues to be encouraged by the levels of sales activity within the
UK and Ireland mortgage market for Summit as financial institutions continue to
review their strategic plans following the adoption of the mortgage conduct of
business in Autumn 2004. Additionally there are significant levels of interest
from the existing customer base for additional software solutions to support the
introducers of mortgage business.
There continue to be a number of prospective future opportunities for the
Portfolio product family and the Board expects to receive decisions on these
projects over the forthcoming period. Operating costs will continue to be
maintained in line with the level of business opportunities available for the
product.
We believe that the Group is well placed for profitable organic growth in the
financial services sector with a continued focus on improvements in operational
efficiency and margins.
Peter Bertram David Webber
Chairman Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the period ended 31 March 2004
Note Unaudited six Unaudited six Audited
months to months to twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Turnover 14,375 13,004 25,655
Operating costs (12,836) (12,796) (24,625)
----------- ----------- -----------
Operating profit 2 1,539 208 1,030
Net interest receivable 24 17 103
----------- ----------- -----------
Profit on ordinary
activities 1,563 225 1,133
before taxation
Tax on profit on ordinary
activities (289) - 1,866
----------- ----------- -----------
Profit on ordinary
activities 1,274 225 2,999
after taxation
Dividends 3 (1,267) - (3,330)
----------- ----------- -----------
Profit/(Loss) for the 7 225 (331)
period =========== =========== ===========
Earnings per share
- basic and diluted 4 2.5p 0.4p 5.9p
CONSOLIDATED BALANCE SHEET
at 31 March 2004
Unaudited Unaudited Audited
31 March 31 March 30 September
2004 2003 2003
#'000 #'000 #'000
Fixed Assets
Tangible assets 2,154 2,351 2,146
----------- ----------- -----------
Current assets
Stocks and work in progress 511 - 50
Deferred tax asset 1,582 - 1,866
Debtors 6,648 9,698 5,357
Cash at bank and in hand 4,652 1,977 3,041
----------- ----------- -----------
13,393 11,675 10,314
Creditors: amounts falling due
within one year (4,970) (8,964) (7,942)
----------- ----------- -----------
Net current assets 8,423 2,711 2,372
----------- ----------- -----------
Total assets less current
liabilities 10,577 5,062 4,518
Creditors: amounts falling due after
more than one year (2) (10) (6)
Accruals and deferred income (6,765) (4,353) (4,369)
----------- ----------- -----------
Net assets 3,810 699 143
=========== =========== ===========
Capital and reserves
Share capital 3,029 2,529 2,529
Share premium 3,281 121 121
Profit and loss account (2,500) (1,951) (2,507)
----------- ----------- -----------
Shareholders' funds 3,810 699 143
=========== =========== ===========
CONSOLIDATED CASH FLOW
for the period ended 31 March 2004
Note Unaudited six Unaudited six Audited
months to months to twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Net cash inflow from
operating activities 5 1,601 163 2,706
----------- ----------- -----------
Returns on investments and servicing
of finance
Interest received 25 18 105
Finance lease interest paid (1) (1) (2)
----------- ----------- -----------
Net cash inflow from returns
on investments and servicing
of finance 24 17 103
----------- ----------- -----------
Taxation (3) - 184
----------- ----------- -----------
Capital expenditure
Purchase of tangible fixed
assets (428) (221) (468)
----------- ----------- -----------
Net cash outflow from capital
expenditure (428) (221) (468)
----------- ----------- -----------
Financing
Net proceeds on issue of
share capital 3,660 - -
Net movement on loans - - (142)
Capital element of finance
lease rentals (4) (4) (7)
----------- ----------- -----------
Net cash inflow/(outflow)
from financing 3,656 (4) (149)
----------- ----------- -----------
Dividends paid (3,239) - (1,357)
----------- ----------- -----------
Increase/(decrease) in cash 1,611 (45) 1,019
=========== =========== ===========
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the period ended 31 March 2004
Unaudited six Unaudited six Audited
months to months to twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Profit for the period 1,274 225 2,999
Dividends (1,267) - (3,330)
Net proceeds from issue of shares 3,660 - -
----------- ----------- -----------
Net increase/(decrease) in
shareholders' funds 3,667 225 (331)
Shareholders' funds at start of
period 143 474 474
----------- ----------- -----------
Shareholders' funds at end of 3,810 699 143
period =========== =========== ===========
NOTES TO THE INTERIM REPORT
for the period ended 31 March 2004
1 BASIS OF PREPARATION
The financial information for each of the six month periods ended 31 March 2004
and 31 March 2003 is unaudited and does not constitute statutory accounts within
the meaning of section 240 the Companies Act 1985.
The financial information for the year ended 30 September 2003 is based on an
audited consolidation of the audited financial statements of the Company and the
financial statements of the following subsidiary undertakings:
Lynx Financial Systems Limited - audited financial statements
AttentiV Systems Limited - dormant company accounts
The accounting polices remain unchanged from those set out in the Accountants'
report on the Group within the placing and admissions document to AIM for the
year ended 30 September 2003.
2 OPERATING PROFIT
The operating profit for the six months to 31 March 2004 is after a charge of
#200,000 (2003 nil) representing a management fee paid to Lynx plc, the former
parent of AttentiV Systems Group plc.
In the six months to 31 March 2004 gross operating costs of #15.7 million (2003
#12.8 million) were reduced by #2.9 million (2003 nil), which represents a net
increase in work-in-progress on long term contracts, resulting in the reported
operating costs of #12.8 million (2003 #12.8 million).
3 DIVIDENDS
Unaudited six Unaudited six Audited
months to months to Twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Interim - - 1,357
Final dividend of 2.5p per share
paid 1,267 - 1,973
to Lynx plc ----------- ----------- -----------
1,267 - 3,330
=========== =========== ===========
4 EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares on the assumed conversion of
all dilutive options.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
Basic earnings Dilutive effects Diluted earnings
per share of options per share
Six months to 31 March 2004
Earnings #'000 1,274 - 1,274
Weighted
average number
of shares 50,632,439 26,080 50,658,519
----------- ----------- -----------
Per share
amount pence 2.5 - 2.5
=========== =========== ===========
Six months to 31 March
2003
Earnings #'000 225 - 225
Weighted
average number
of shares 50,577,794 - 50,577,794
----------- ----------- -----------
Per share
amount pence 0.4 - 0.4
=========== =========== ===========
12 months to 30
September 2003
Earnings 2,999 - 2,999
Weighted
average number
of shares 50,577,794 - 50,577,794
----------- ----------- -----------
Per share
amount pence 5.9 - 5.9
=========== =========== ===========
5 NET CASH INFLOW FROM OPERATING ACTIVITIES
Unaudited six Unaudited six Unaudited
Months to months to Twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Operating profit 1,539 208 1,030
Depreciation 420 504 956
(Increase)/decrease in work in
progress (461) 80 30
(Increase)/decrease in debtors (1,291) (1,286) 674
Increase in creditors 1,394 657 16
----------- ----------- -----------
Net cash inflow from operating
activities 1,601 163 2,706
=========== =========== ===========
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited six Unaudited six Audited
months to months to twelve months
31 March 31 March to 30 September
2004 2003 2003
#'000 #'000 #'000
Increase/(decrease) in cash in the
period 1,611 (45) 1,019
Cash flow from financing - - 142
Cash flow from finance leases 4 4 7
----------- ----------- -----------
Change in net debt resulting from
cash 1,615 (41) 1,168
flows
Non-cash movements in financing - - 2,197
----------- ----------- -----------
Movement in net funds/(debt) in
the 1,615 (41) 3,365
period
Net funds/(debt) at start of 3,027 (338) (338)
period ----------- ----------- -----------
Net funds/(debt) at end of period 4,642 (379) 3,027
=========== =========== ===========
7 COPIES OF THE INTERIM REPORT
Copies of the interim report will be sent to shareholders. Further copies will
be available from the company's registered office at Gainsborough House,
Houghton Hall Park, Houghton Regis, Bedfordshire, LU5 5XF for one month from the
date of this announcement.
INDEPENDENT REVIEW REPORT TO ATTENTIV SYSTEMS GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2004 which comprises the Consolidated Profit and
Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow, Reconciliation
of Shareholders' Funds and related Notes 1 to 7. We have read the other
information contained in the interim report which comprises only the highlights
and Chairman's Statement and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information. Our
responsibilities do not extend to any other information.
This report is made solely to the company, in accordance with guidance contained
in APB Bulletin 1999/4 "Review of Interim Financial Information". Our review
work has been undertaken so that we might state to the company those matters we
are required to state to it in a review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company, for our review work, for this report, or for the
conclusion we have formed.
Directors' Responsibilities
The interim report including the financial information contained therein is the
responsibility of, and has been approved by, the directors. They are responsible
for preparing the interim report and ensuring that the accounting policies and
presentation applied to the interim figures are consistent with the those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
"Review of Interim Financial Information" issued by the Auditing Practices Board
for use in the United Kingdom. A review consists primarily of making enquiries
of management and applying analytical procedures to the financial information
and underlying financial data and, based thereon, assessing whether the
accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as test of controls
and verification of assets, liabilities and transactions. It is substantially
less in scope than an audit performed in accordance with United Kingdom auditing
standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2004.
GRANT THORNTON
Chartered Accountants
Oxford, 21 May 2004
This information is provided by RNS
The company news service from the London Stock Exchange
END
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