RNS Number:4091F
AttentiV Systems Group PLC
19 November 2004
19 NOVEMBER 2004
ATTENTIV SYSTEMS GROUP PLC
("AttentiV" or "the Company")
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
AttentiV Systems Group plc is a leading developer and supplier of software to
the financial services sector. These are the first full year results reported by
the Company since its successful AIM listing in March 2004.
Financial highlights
* Turnover up 25% to #32.1 million (2003 #25.7 million)
* Underlying operating margin increased to 11% (2003 8%) *
* Underlying operating profit increased to #3.6 million (2003 #2.0
million) *
* Reported operating profit increased to #3.2 million (2003 #1.0 million)
* #2.2 million operating cash flow generated during the period (2003 #2.7
million) with closing net cash of #5.1 million (2003 #3.0 million)
* Maiden dividend as a quoted company of 0.66 pence per share which is six
months earlier than anticipated at the time of the company's flotation
* See note 3 for further details
Operational highlights
* Successful flotation on AIM in March 2004
* Delivery of Summit solution to The Royal Bank of Scotland plc group in
one of the UK's largest technology transformation programmes
* 5 year support and development agreement signed with Intelligent Finance
* Strengthening of position in sub-prime market
David Webber, Chief Executive of AttentiV, commented:
"The overall performance of the business over the financial year has been highly
satisfactory. Trading subsequent to the year-end has also progressed in line
with expectations. We expect our past success in selling a high level of
additional services and software licences to our existing customers to continue
and to enable fulfillment of our business plans for the financial year ending 30
September 2005."
ENQUIRIES:
AttentiV Systems Group plc Tel: 01582 845000
David Webber, Chief Executive
Philip Wood, Finance Director
ICIS Limited Tel: 020 7651 8688
Archie Berens
Caroline Evans-Jones
WEBSITE
A presentation in respect of preliminary results for the year ended 30 September
2004 will be posted to the investor section of the AttentiV website (
www.attentiv.com) at 9.30 a.m. on 19 November 2004.
Background Information on AttentiV Systems Group plc
AttentiV is a provider of software solutions and associated services to the
financial services sector.
AttentiV has three offerings to the financial services market.
1. Portfolio - a software solution for organisations offering asset-backed
finance products, personal loans and debt management;
2. Summit - a software system that supports the selling and administration
of mortgages, loans, savings, current accounts and associated services within
the retail banking sector; and
3. Tailored Solutions - software applications that are designed and built
to perform particular tasks within the financial services market place. The
functionality and scope of these solutions is determined by individual customer
requirements.
AttentiV provides all services required for a successful implementation of its
offerings including project management, business consultancy, technical services
and training. AttentiV also provides software development services; for the
Portfolio and Summit products all software development takes place as part of
the single product offering which is available to all customers, whilst for
tailored solutions the developed software resides solely in that particular
customer's software installation.
AttentiV retains all property rights over all the intellectual property it
creates.
AttentiV provides software support, maintenance and helpdesk services for
customers once they are running their businesses with the software and through
its Synergy outsourcing service can deliver any of its technology solutions as a
managed service.
ATTENTIV SYSTEMS GROUP PLC
("AttentiV" or "the Company")
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
Chairman's Statement
I am pleased to announce a strong set of results for the financial year ended 30
September 2004 with the AttentiV management team delivering the anticipated
improvement in financial performance.
Turnover has risen by 25% to #32.1 million (2003 #25.7 million).
The AttentiV team has delivered on the first stage of its objective of
operational improvement with underlying operating margin increased to 11% (2003
8%).
The combination of successful project delivery, customer retention and
efficiency improvements has led to reported operating profit increasing to #3.2
million (2003 #1.0 million) whilst underlying operating profit has increased to
#3.6 million (2003 #2.0 million). Underlying operating profit is stated after
adjustment for non-recurring costs related to the group's former ownership
together with the costs in 2004 associated with the rebranding to AttentiV.
The team continues to concentrate on appropriate financial diligence with #2.2
million operating cash flow generated during the period (2003 #2.7 million) and
debtor days at the year end are maintained at our target of between 40 to 50
days.
Overview of year
The overall performance of the business over the financial year has been highly
satisfactory.
The Summit retail banking product has had considerable success during the year
which culminated in the signature of a contract to provide mortgage application
processing capability to the Portman Building Society. The excellent performance
of Summit compensated for a lower than anticipated level of success for the
Portfolio product due to competitive pressures within the motor and consumer
finance markets.
In addition to the successful delivery of projects for London Scottish Bank plc,
Toyota Financial Services (UK) plc and a number of mortgage lenders including
Britannia Building Society and Bristol & West plc, AttentiV has strengthened its
position in the sub-prime mortgage market with the addition of Mortgages plc,
the Merrill Lynch subsidiary, as a customer.
It is particularly pleasing that AttentiV has consolidated its position as the
UK's leading provider of mortgage systems by its supply to The Royal Bank of
Scotland plc group of a solution to enable the consolidation of its primary
mortgage processing platforms in one of the UK's largest technology
transformation programmes. The programme is scheduled to be completed in autumn
2005.
Software licence revenues for the group increased to #4.8 million (2003 #3.0
million) with services and third party revenues increasing to #15.7 million
(2003 #10.9 million). Support & maintenance and outsourcing revenues were #11.6
million (2003 #11.8 million).
In the year ended 30 September 2004 gross operating costs of #30.5 million (2003
#26.6 million) were reduced by #1.6 million (2003 #2.0 million), which
represents a net increase in work-in-progress on long term contracts, resulting
in the reported operating costs of #28.9 million (2003 #24.6 million).
Dividend
Following the group's flotation on AIM the board is pleased to announce the
proposed payment of a dividend ahead of the expectations set on flotation. The
board proposes the payment of a final dividend of 0.66p per ordinary share which
together with the pre-flotation dividend of #1,267,000 (paid to the company's
then parent) makes the total dividend paid and proposed equivalent to 3.16p per
share (2003 6.58p). The final dividend will be paid on 14 February 2005 to
shareholders on the register as at 28 January 2005. The shares are expected to
be quoted ex dividend on 26 January 2005.
Operational Review
Portfolio
Revenue for the Portfolio product was #4.6 million (2003 #5.1 million) which was
below expectations due to the level of competition within the consumer and motor
finance sector.
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 completed the roll out of the AttentiV personal loan and collection
solution across their UK branches.
Stroud & Swindon Building Society, The Cooperative Bank plc and Mortgages plc
also completed projects to deploy the Portfolio collections and credit
management solution.
Summit
Revenue for the Summit product was #22.0 million (2003 #14.1 million). This
performance was ahead of expectations due to the continuing consolidation of
Summit's position within the sector together with the continued closure of sales
opportunities within the growing user base.
During the period Britannia Building Society successfully migrated their 2.5
million savings accounts and 188 branches to the Summit Savings and Branch
Cashiering solution with the licence fee associated with this project being
recognised in the first half of the financial year.
Following the signing of a contract with The Royal Bank of Scotland plc in
December 2003 the implementation of Summit has progressed well with the Royal
Bank of Scotland, NatWest and Ulster Bank brands successfully processing
mortgages subsequent to our financial year-end.
In two further rapid deployments of Summit both the National Counties and
Darlington Building Societies have successfully commenced transacting live
mortgage business during the year. In August, Bristol & West plc successfully
migrated their historic mortgage book on to the Summit mortgage platform. On 1
September 2004 Mortgages plc, the Merrill Lynch subsidiary, successfully
commenced transacting live mortgage business on Summit. They join Southern
Pacific Mortgages Limited and Preferred Mortgages Limited, the Lehman's
subsidiaries, as sub-prime lenders using mortgage lending solutions from
AttentiV: further evidence of the opportunity we believe exists for AttentiV in
the sub-prime market.
During the autumn, our mortgage customers have migrated to Summit Release 9.1 in
support of their compliance with the FSA's Mortgage Conduct of Business rules.
Tailored Solutions
Revenue for Tailored Solutions was #5.5 million (2003 #6.5 million). This
reduction was expected and was due to a client taking their support and
maintenance in house on 31 December 2003.
The five-year support and development agreement signed with Intelligent Finance,
the HBOS plc internet bank, to support the bank's mortgage, savings and
offsetting systems, has progressed well through the year.
Investment
During the year AttentiV has completed further investments in its software
products with additional enhancements to the user interfaces for Summit and
Portfolio. There was also significant investment in the Summit product to
support regulatory requirements and greater performance capability for high
business volumes. Additionally, a new mortgage point of sale solution provided
in collaboration with a partner, has been promoted since the early summer. This
has already resulted in three customers adopting the solution.
The savings and mortgages offset capability for Summit remains on track for
delivery within the next release of Summit and the revolving credit capability
developed for Portfolio Credit will shortly be available to customers.
Improvement
Building upon the improvements in operating performance over the past year, a
programme has been established for further operational improvements in
productivity to be achieved in 2005. For the development and support functions,
there are particular metrics that are being monitored on a monthly basis to
track against this programme and any variances to the plan are being reported to
the AttentiV Board. The management team is confident that improvements will be
achieved in 2005 and this will underpin our continuing focus on removing our
dependency on licence revenues.
Staff
We have continued to invest in the training of our employees over the year.
Average employee numbers have risen from 368 in 2003 to 391 in 2004 but we do
not envisage employee numbers significantly increasing beyond that number within
2005. Retention has been maintained at 89% for the year.
Current Trading & Outlook
Trading since 30 September 2004 has continued in line with expectations, with
our Summit customers transacting new mortgage business in accordance with the
Mortgage Conduct of Business rules, to schedule, on 1 November 2004.
In accordance with our business plans we have subsequent to the financial year
end reduced our delivery capacity for the Portfolio product. This was in
response to the level of competitive pressures within the motor and consumer
finance sector resulting from the low barriers to entry, compared to core
banking systems, for new suppliers to the sector. However, the opportunities
within the retail banking sector and our existing customer base is expected to
compensate for the challenging motor and consumer finance sector.
Our aspirations for growth within the consumer finance sector are supported by a
detailed programme of marketing activities and we remain encouraged by the
pipeline of opportunities.
Our view is that a number of mortgage providers, with internally developed
lending systems, will need to take very tactical approaches to achieving
mortgage compliance and that there will be both cost and efficiency burdens
associated with the solutions they have adopted. A number of these organisations
will need to make strategic decisions regarding their mortgage processing
platforms during 2005 and securing sales wins to these organisations will lay
the basis for further business success for AttentiV for the year ending 30
September 2006.
We expect our past success in selling a high level of additional services and
software licences to our existing customers to continue and thereby facilitate
fulfillment of our business plans for the financial year ending September 2005.
The company has #7.1 million (2003 #6.0 million) of contracted licences not yet
booked to revenue together with a maintenance and contracted recurring revenues
base at 30 September 2004 of #12.4 million (2003 #10.8 million).
Looking forward, we expect the level of regulation in UK financial services to
continue to be an important factor that will lead organisations to abandon in
house developed solutions, because of the accelerating cost burden of
compliance. Instead, we expect they will find it more efficient to adopt product
solutions where the regulatory cost burden is shared across a broad user
community. We therefore expect further opportunities to arise over the coming
year within the mortgage market in the UK and Ireland as organisations assess
their need to enhance their strategic platforms to meet future regulatory and
market requirements.
Peter Bertram
Chairman
19 November 2004
ATTENTIV SYSTEMS GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
Consolidated profit and loss account
For the year ended 30 September 2004
2004 2003
Notes #'000 #'000
Turnover 2 32,071 25,655
Operating costs (28,874) (24,625)
--------- ---------
Operating profit 3,197 1,030
Net interest receivable 125 103
--------- ---------
Profit on ordinary activities before taxation 3,322 1,133
Tax on profit on ordinary activities (635) 1,866
--------- ---------
Profit on ordinary activities after taxation 2,687 2,999
Dividends 4 (1,667) (3,330)
--------- ---------
Profit/(Loss) for the period 1,020 (331)
========= =========
Earnings per share
- basic 5 4.8 p 5.9 p
- diluted 5 4.6 p 5.9 p
All of the activities of the group are classed as continuing.
There were no recognised gains or losses other than the profit for the financial
year.
ATTENTIV SYSTEMS GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
Consolidated balance sheet
As at 30 September 2004
2004 2003
#'000 #'000
Fixed assets
Tangible assets 2,100 2,146
--------- ---------
Current assets
Stocks and work in progress 19 50
Debtors 9,867 7,223
Cash at bank and in hand 5,072 3,041
--------- ---------
14,958 10,314
Creditors: amounts falling due within one year (6,987) (7,942)
--------- ---------
Net current assets 7,971 2,372
--------- ---------
Total assets less current liabilities 10,071 4,518
Creditors: amounts falling due after more than one year - (6)
--------- ---------
10,071 4,512
Accruals and deferred income (5,234) (4,369)
--------- ---------
Net assets 4,837 143
========= =========
Capital and reserves
Share capital 3,029 2,529
Share premium 3,295 121
Profit and loss account (1,487) (2,507)
--------- ---------
Shareholders' funds 4,837 143
========= =========
ATTENTIV SYSTEMS GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
Consolidated cash flow statement
For the year ended 30 September 2004
2004 2003
Notes #'000 #'000
Net cash inflow from operating activities 6 2,231 2,706
--------- ---------
Returns on investments and servicing of finance
Interest received 126 105
Finance lease interest paid (1) (2)
--------- ---------
Net cash inflow from returns on investments and
servicing of finance 125 103
--------- ---------
Taxation (8) 184
--------- ---------
Capital expenditure
Purchase of tangible fixed assets (743) (468)
--------- ---------
Net cash outflow from capital expenditure (743) (468)
--------- ---------
Financing
Net proceeds on issue of share capital 3,674 -
Net movement on loans - (142)
Capital element of finance lease rentals (8) (7)
--------- ---------
Net cash inflow/(outflow) from financing 3,666 (149)
--------- ---------
Equity Dividends paid (3,240) (1,357)
--------- ---------
Increase in cash 7 2,031 1,019
========= =========
ATTENTIV SYSTEMS GROUP PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004
Notes to the preliminary financial information
1. Basis of preparation
The principal accounting policies of the group are set out in the Placing and
Admission to AIM document of March 2004. The policies have remained unchanged.
2. Turnover
The turnover and profit before tax are attributable to the one principal
activity of the group.
An analysis of turnover by geographical market is given below:
2004 2003
#'000 #'000
United Kingdom 30,641 24,103
Rest of Europe 1,422 1,440
Rest of World 8 112
--------- ---------
32,071 25,655
========= =========
3. Underlying operating profit
The underlying operating profit detailed in the financial highlights is stated
after adjustment for non-recurring costs related to the group's former ownership
together with the costs associated with the rebranding to AttentiV in 2004. The
two adjusted items in 2004 are i) #0.2 million of the aforementioned rebranding
costs; and ii) #0.2 million pre-flotation management charge from AttentiV's
former parent company. The two adjusted items in 2003 are i) #0.4 million
management charge from AttentiV's former parent company; and ii) #0.6 million of
costs associated with establishing and terminating a discontinued distribution
agreement with a former group undertaking.
4. Dividends
2004 2003
#'000 #'000
Interim dividend of 2.50p per share (2003 2.68p) 1,267 1,357
Final dividend of 0.66p per share (2003 3.90p) 400 1,973
------- ---------
1,667 3,330
======= =========
The comparative information for dividend per share has been recalculated as if
the sub-division on 17 February 2004 of 25,288,897 issued ordinary shares of 10
pence each into 50,577,794 issued ordinary shares of 5 pence each had occurred
at the time of the interim and final dividends in 2003.
The final dividend will be paid on 14 February 2005 to shareholders on the
register as at 28 January 2005. The shares are expected to be quoted ex-dividend
on 26 January 2005.
5. 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
Year to 30
September 2004
Earnings #'000 2,687 - 2,687
Weighted
average number
of shares 55,605,267 2,617,774 58,223,041
-------- ----------- ------------
Per share
amount pence 4.8 - 4.6
======== =========== ============
Year to 30
September 2003
Earnings #'000 2,999 - 2,999
Weighted
average number
of shares 50,577,794 - 50,577,794
-------- ----------- ------------
Per share
amount pence 5.9 - 5.9
======== =========== ============
The earnings per share information has been prepared on the basis that the
sub-division on 17 February 2004 of 25,288,897 issued ordinary shares of 10
pence each into 50,577,794 issued ordinary shares of 5 pence each had occurred
at 1 October 2003.
6. Net cash inflow from operating activities
2004 2003
#'000 #'000
Operating profit 3,197 1,030
Depreciation 789 956
Decrease in work in progress 31 30
(Increase)/decrease in debtors (3,215) 674
Increase in creditors 1,429 16
--------- ---------
Net cash inflow from operating activities 2,231 2,706
========= =========
7. Reconciliation of net cash flow to movement in net funds
2004 2003
#'000 #'000
Increase in cash in the year 2,031 1,019
Cash flow from financing with former group undertakings - 142
Cash flow from finance leases 8 7
------- ---------
Change in net funds resulting from cash flows 2,039 1,168
Non-cash financing movements with former group undertakings - 2,197
------- ---------
Movement in net funds in the year 2,039 3,365
Net funds at start of year 3,027 (338)
------- ---------
Net funds at end of year 5,066 3,027
======= =========
8. Publication of non-statutory accounts
The financial information above does not constitute the Company's statutory
financial statements for the year ended 30 September 2004 but is derived from
those financial statements. Statutory financial statements for 2003 have been
delivered to the Registrar of Companies and those for 2004 will be delivered
prior to the Company's annual general meeting. The auditors have reported on
those financial statements; their reports were unqualified and did not contain
statements under s237(2) or (3) Companies Act 1985.
9. Annual General Meeting
The Company's Annual General Meeting will be held at the offices of Investec, 2
Gresham Street, London, EC2V 7EE on 20 January 2005 at 10.00 a.m. The Company's
Annual Report is expected to be posted to shareholders in early December 2004.
Copies of the Annual Report will be available from that date from the Company's
registered offices, Gainsborough House, Houghton Hall Park, Houghton Regis,
Bedfordshire LU5 5XF
This information is provided by RNS
The company news service from the London Stock Exchange
END
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