RNS No 8497u
CEDAR GROUP PLC
19th November 1998
Cedar Group Plc
Interim Results for the six months ended 30th September 1998
STATEMENT BY THE CHAIRMAN, SIDNEY CORDIER
As anticipated at the time of announcement in June, of the March
1998 results, this year will reflect growth and transition. The
Group is pursuing its plans for achieving growth based on the
strengths of its existing operations. This has involved making
investments in facilities and staff, and moving to a new building
at Cobham, Surrey, where for the first time all Group sales
activities are benefiting from being carried out in a purpose
designed customer centre.
The underlying trend of the business was strongly upwards in the
6 months to 30 September, 1998. Turnover increased by 36% to
#7.2M (1997: #5.3M). This included a marked increase in licence
sales of cfacs up by 80% and an early contribution from newly
acquired Grad Systems' macris time recording product. There was
also a good performance in consultancy and services, up 71%, as
new recruits started to make a contribution. Most of the services
delivered were generated from licence sales secured in the busy
final quarter of the year to 31 March, 1998.
The increase in average staff numbers during the period by 32%
and the linked investment in infrastructure necessary to support
their activities, resulted in substantially increased costs and a
pre-tax loss before amortisation of #0.8M (1997: #1.1M profit).
The requirement to fund the investments outlined above, combined
with a rise in trade debtors in line with the growth in sales,
led to a cash outflow of #4.3M (1997: #0.1M) and borrowings of
#1.8M at the end of the period.
The Group has changed its terms of business, which now require
all new customer contracts to be self financing with payments due
on delivery of software and hardware (in line with normal
industry practice). These changes will reduce future working
capital requirements. Achievement of this reduction will allow
the Group to continue to finance its working capital needs
through bank facilities for the remainder of the year, without
necessarily having to achieve a sale of its vacated New Malden
property.
The investment in people is already delivering tangible results
and we are confident that this will continue through the second
half of the year. The conclusion of the Tele-Connect deferred
consideration agreement, and the acquisition of Qualtech Limited
in October, are both further steps in the formation of the Group,
and give us the opportunity to combine their sales operations in
offering solutions to improve call centre agent effectiveness. A
number of further initiatives which have long gestation periods
are also likely to produce results for the first time in the
second half.
Our strategy is to provide a 'best of breed' portfolio of
products capable of integrating all aspects of Customer
Relationship Management (CRM) with an organisation's business
processes and information systems. This strategy, aimed at medium
and large enterprises, is gaining strong acceptance from clients
who are leaders in their field and the Group anticipates
accelerating growth in line with its long term plans. The Board
are encouraged by the increased cfacs licence sales achieved in
the period as this is the lead indicator that the strategy being
pursued is having early success. The Board therefore continues to
believe that the Group will deliver satisfactory results for the
year as a whole.
The Board, having reviewed the growth of the business and its
financial needs, has declared an unchanged dividend of 0.8p
(1997: 0.8p) payable on 26th March, 1999.
Finally, I should like to make a special mention of the
retirement of Leon Fattal, founder of the Cedar Group, who leaves
the Board today. His contribution over fourteen years has been
immense and without him there would be no business and no
opportunities for any of its stakeholders. We wish him well.
S H Cordier
Chairman 19 November, 1998
Enquiries:
Mike Harrison, Group Managing Director,
Cedar Group Plc 01932-584000
Alex Walters, Citigate Dewe Rogerson Ltd
0171-282 8000
mobile: 0370-788624
Cedar Group Plc
Interim Results for the six months ended 30th September 1998
Consolidated Profit & Loss Account
Six months ended 30 September 1998 Six Year
months ended
Amortisation ended 31 March
Results before of goodwill & Consolidated 30 Sept. 1998
amortisation + Intangibles profit&loss 1997 (Audited)
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
#'000 #'000 #'000 #'000 #'000
Note
Turnover - continuing
Operations 2 7,249 7,249 5,321 12,506
Cost of Sales (2,249) (2,249) (1,573) (3,935)
Gross profit 5,000 5,000 3,748 8,571
Other operating expenses before
amortisation (5,920) (5,920) (2,760) (6,113)
Amortisation of goodwill &
intangibles - (143) (143) - -
Total operating
expenses (5,920) (143) (6,063) (2,760) (6,113)
Operating (loss)/profit -
continuing
operations (920) (143) (1,063) 988 2,458
Investment income 171 171 161 274
Interest payable and
similar charges (79) (79) (95) (168)
(Loss)/profit on ordinary
activities before
taxation (828) (143) (971) 1,054 2,564
Tax on (loss)/profit on ordinary
activities 3 193 193 (347) (866)
(Loss)/profit on ordinary
activities after
taxation (635) (143) (778) 707 1,698
Dividends paid and
proposed 4 (268) (268) (253) (786)
Retained (loss)/profit
for the period (903) (143) (1,046) 454 912
Earnings per
ordinary share 5 (1.9)p (0.4)p (2.3)p 2.2p 5.3p
+ Results before amortisation include all depreciation and
amortisation charges on assets other than purchased intellectual
property rights and goodwill.
Cedar Group Plc
Interim Results for the six months ended 30th September 1998
Consolidated Balance Sheet
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed Assets
Intangible assets 6,678 - 2,073
Tangible assets 1,991 1,651 1,499
Investments 993 - -
9,662 1,651 3,572
Current assets
Debtors: falling due within one
year 12,226 5,677 10,199
Debtors: falling due after one year 200 119 705
Cash at bank and in hand 4 3,957 2,556
12,430 9,753 13,460
Creditors: Amounts falling due (9,031) (5,075) (9,398)
within one year
Borrowings (1,763) - -
Net current assets 1,636 4,678 4,062
Total assets less current 11,298 6,329 7,634
liabilities
Provisions for liabilities and (4,500) (2,592) (922)
charges
Net assets 6,798 3,737 6,712
Capital and reserves
Called up share capital 1,676 1,584 1,667
Share premium reserve 3,311 963 3,286
Merger reserve 242 - -
Profit and loss account 5,163 5,751 6,209
Goodwill write off reserve (3,594 (4,561) (4,450)
Equity shareholders' funds 6,798 3,737 6,712
Cedar Group Plc
Interim Results for the six months ended 30th September 1998
Consolidated Cash Flow Statement
Six months Six month Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Note
Net cash (outflow)/inflow
from 6 (2,404) 375 923
operating activities
Returns on investments and 29 167 188
servicing of finance
Taxation 259 (239) (620)
Capital expenditure and financial (1,757) (147) (2,306)
investment
Acquisitions 65 - -
Equity dividends paid (533) (222) (475)
Cash outflow before use of liquid
resources and financing (4,341 (66) (2,290)
Management of liquid resources - - (1,583)
Financing 26 - 2,406
Decrease in cash (4,315) (66) (1,467)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
for the six months ended 30 September 1998
Six months to Six months to Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
(Decrease) in cash in the period (4,315) (66) (1,467)
Net cash at the start of the period 2,556 4,023 4,023
Net (debt)/cash at the end of the (1,759) 3,957 2,556
period
Cedar Group Plc
Interim Results for the six months ended 30th September 1998
Notes to the Interim Statement
1. BASIS OF PREPARATION
The interim statement has been prepared on the basis of the accounting
policies set out in the Company's statutory accounts for the year
ended 31 March 1998.
The financial information presented in this interim statement does
not constitute full financial information within the meaning of
section 240 of the Companies Act 1985.
The comparative figures for the financial year ended 31 March 1998
have been extracted from the Company's statutory accounts for that
financial year. Those accounts have been reported on by the
Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
Copies of this statement of interim results are being sent to all
shareholders within seven days. Further copies are available from
the Company's Registered Office: Cedar Group Plc, Cedar House, 78
Portsmouth Road, Cobham, Surrey KT11 1HY.
2. TURNOVER
Turnover from continuing activities can be analysed as follows:
Six months to Six months to Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Classes of business
Software products and services:
Licences 2,316 1,666 4,518
Consultancy and training 2,055 1,203 2,537
Maintenance 2,338 2,080 4,226
Other 540 372 1,225
7,249 5,321 12,506
Geographical segments
United Kingdom 7,071 5,321 11,816
Rest of World 178 - 690
7,249 5,321 12,506
3. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
Six months to Six months to Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Corporation tax (credit)/charge at 31% (193) 347 866
4. DIVIDENDS PAID AND PROPOSED
Dividends in respect of the year ended 31 March 1998 were paid on 2
September 1998. The directors have declared an interim dividend of
0.8p (net) for the six months ended 30 September 1998, which will be
paid on 26th March 1999 to all holders of Ordinary Shares on the
register at 26th February 1999.
5. (LOSS)/EARNINGS PER SHARE
Six months to Six months to Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
(Loss)/earnings per ordinary share (2.3)p 2.2p 5.3p
Losses per Ordinary Share of 2.3p are based on the loss after
taxation and on 33,421,817 Ordinary Shares being the weighted average
number of Ordinary Shares in issue and ranking for dividend. The
potential dilution of earnings per share from the exercise of share
options is not material.
6. RECONCILIATION OF OPERATING (LOSS)/PROFIT TO OPERATING CASH
FLOWS
Six months to Six months to Year to
30 September 30 September 31 March
1998 1997 1998
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Operating (loss)/profit (1,063) 988 2,458
Depreciation 285 195 434
Amortisation of goodwill and 143 - -
intangibles
Profit on disposal of fixed assets - (3) (4)
(Increase)/decrease in debtors (1,518) (46) (3,080)
(Decrease)/increase in creditors (251) (759) 1,115
Net cash (outflow)/inflow from (2,404) 375 923
operating activities
END
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