RNS No 7530m
COMINO PLC
11th June 1998
COMINO PLC
1998 FINAL RESULTS
#1.95m Pre-tax Profits up 37%; Dividend up 11%; Strong Order Book
Comino plc, the Workflow technology and software applications group, announces
its final results for the year to 31 March 1998. The results firmly
demonstrate that the company has achieved its goal during its first full year
on the Alternative Investment Market.
Key points from the final results:
* Turnover up 68% to #13.15m (1997: #7.79m)
* Strong recurring support revenue from customer base
* All group companies among the market leaders in their
respective fields
* Profit before tax up by 37% to #1.95m (1997: #1.42m)
* Earnings per share up 8% to 12.33p (1997: 11.46p),
enhanced by trading and acquisition activity
* Net cash #4.3m (1997: #1.86m before raising additional
#1.53m on AIM listing)
* Final dividend up 11% to 2.50p (1997: 2.25p)
* Gross margins maintained; costs controlled
* Major order won in Australia
* Acquisition of Excelsis last October integrated into Context;
ISE incorporated as wholly-owned company;
Turnover run-rate approximately #16m
* Continuing expansion across the Group in Workflow and Call
Centre applications
Commenting on the results and future prospects Garth Selvey, Chief Executive,
said:
"We remain determined to build shareholder value. With Context's acquisition
and overseas sales success, ISE's strong order book and Prologic's early
success in writing new business, Comino is well placed for a successful
future."
Enquiries :
Garth Selvey, Chief Executive
Paul Clifford, Finance Director
Comino plc
Tel: 0171 786 9600 until 1.00pm, thereafter 01628 525433
Peter Binns
Jane Mallinson
Binns & Co
Tel: 0171 786 9600
Editors' Notes:
1. Context Software, embracing Workflow and electronic document management,
is used by 200 UK housing customers - associations and local authorities
- of which 27 are local authorities. Context also has one housing
customer in Canada and one in Australia.
2. ISE's software is used by one quarter of The Times 100 companies, in 30
pension administration departments and 22 local authority revenue
departments around the UK.
ISE is Comino's fastest growing company, with increasing opportunities
for Workflow-based and Call Centre solutions.
3. Prologic provides complete 'business to business' supply chain solutions
for the fashion and clothing industry, with 40 customers in the UK and
overseas.
4. Context contributed 61% of the subsidiaries' operating profit, ISE 25%
and Prologic 14%.
5. Compared to the previous 12 months, Context increased turnover by 53%
(via its acquisition of Excelsis) and operating profits by 46%.
Similarly, Prologic increased turnover by 28% and operating profits by
65%.
6. In the 12 months to 31 March 1998, compared to its previous 18 month
accounting period, ISE increased turnover by 18% and operating profits by
27%.
Chairman and Chief Executive's Statement
Technology today plays a part in almost every conceivable business activity.
Comino companies use information technology to deliver effective, reliable
business solutions to our customers at the right price; giving them the
opportunities that technology brings, but without the risks. We do this in
specialist market sectors that we know well, successfully blending our
business and technical expertise. It therefore comes as no surprise that
Comino has enjoyed an excellent year.
Turnover of #13.2m reflects an increase of 68 per cent on the previous period.
With the inclusion of a full year for the Excelsis acquisition, the turnover
run-rate is approximately #16m. More importantly, gross profit margins have
been maintained and costs have been controlled to produce a healthy operating
profit, and an overall profit before tax of #1.95m, up 37 per cent on the
previous period.
Net assets at the year end were #1.72m compared to #1.28m. Cash balances were
#4.3m compared to #1.9m. In line with comments made in the prospectus, no
interim dividend was paid during the year. The final dividend proposed by the
Directors is 2.50 pence per share, increased from 2.25 pence. In future, the
Company expects to pay both interim and final dividends. Fully diluted
earnings per share increased from 9.95 pence to 11.46 pence, an increase of 15
per cent. Further improvement is anticipated with a full year's contribution
from acquisitions.
The Group has strong recurring support revenue from its customer base which
last year represented 35 per cent of turnover. The gross profit from these
revenues covered 51 per cent of operating subsidiary overheads. We see such
revenue as the backbone of the Group.
In October 1997, we acquired the business of Excelsis Limited, a housing
solutions competitor of Context, which effectively doubled the size of this
business in terms of turnover and customers. It has also considerably widened
Context's target market. This development of the company's critical mass has
contributed to a major contract with the Defence Housing Authority in
Canberra, Australia for housing software and services.
The importance of ISE's Workflow technology to Context's operations in the
housing sector accelerated the acquisition of the final minority shareholding
in ISE in November 1997. This 'business to client' technology is built around
large numbers of the public requiring high service levels in response to their
enquiries. ISE's products are currently used in 30 pension administration
departments and 22 local authority revenue departments around the UK. ISE's
order book at the year end was up 81 per cent compared with the same point in
the previous year.
We regard Workflow as one of Comino's principal assets, and there is
considerable interest in this product across ISE's traditional business areas
and in Context's housing base. We have already witnessed its first
application in housing by the English Churches Housing Group - an existing
Context customer which has purchased Workflow call-centre technology from ISE.
There are strong synergies between ISE and Context, and we will actively
continue to develop these links in the future, as we seek to bring continuous
added-value services to our customers.
Unlike ISE and Context, Prologic's Enterprise Resource Management is
principally a 'business to business' product. Focused exclusively on the
fashion and clothing industry, Prologic achieved an excellent performance, and
finished the year particularly strongly. It has recently won two new major
contracts, enhancing its growth prospects for the current year.
Being well established in their respective markets, all three companies have
hitherto required only a modest amount of advertising and public relations to
sustain awareness of their activities. The Board now believes that it is time
to reinforce these individual identities to unlock the latent value within the
Group, and is taking steps to promote Comino's overall strengths to a wider
audience.
The Group is likely to develop further its focus on housing and local
authorities, and promote the use of its Workflow technology by acquiring
companies whose products serve large numbers of the public. The Group will
also seek - initially by publication on the Internet - additional overseas
customers for its products. For Workflow, the company will target
distributors or value-added resellers, and in other cases they will be
selected end-users of significant size.
Whilst ensuring that appropriate attention has been given to product
compliance, the Board has seen fit to distance itself from revenues that arise
solely from the Millennium, preferring instead to take a longer term view to
protect 2001 business levels.
Comino's success to date has been founded on giving our customers a high
quality product coupled with outstanding service and attention to detail. We
have only been able to deliver this through the efforts of our professional,
effective and well-motivated employees. We thank them for the contribution
they have made over the year. We would also like to thank our fellow
directors for their commitment and support.
We remain determined to build shareholder value. With Context's acquisition
and overseas sales success, ISE's strong order book and Prologic's early
success in writing new business, Comino is well placed for a successful
future.
Mike Brooke Chairman
Garth Selvey Chief Executive
10 June 1998
Consolidated Profit and Loss for the year 31 March 1998
Year ended Year ended Year ended Period ended
31 March 31 March 31 March 31 March
1998 1998 1998 1997
#'000 #'000 #'000 #'000
Continuing
Activities Acquisitions Total
Turnover 10,609 2,542 13,151 7,792
Cost of sales (3,486) (603) (4,089) (2,875)
-------- -------- --------- --------
Gross profit 7,123 1,939 9,062 4,917
Administrative
expenses (5,574) (1,711) (7,285) (3,563)
-------- -------- --------- --------
Operating profit 1,549 228 1,777 1,354
------- --------
Interest receivable 176 71
Interest payable (3) (5)
--------- --------
Profit on ordinary
activities before
taxation 1,950 1,420
Tax on profit on
ordinary activities (453) (292)
--------- --------
Profit on ordinary
activities after
taxation 1,497 1,128
Minority interest - equity (56) (130)
--------- ---------
Profit for the
financial year 1,441 998
Dividends (330) (201)
--------- ---------
Retained profit
for the
financial year 1,111 797
===== =====
Earnings per share 12.33p 11.46p
===== =====
Fully diluted
earnings
per share 11.46p 9.95p
===== =====
The Group had no recognised gains or losses during the year ended 31 March
1998 other than those included in the results above.
Consolidated Balance Sheet at 31 March 1998
1998 1997
#'000 #'000
Fixed assets
Tangible assets 714 256
Current assets
Stocks 291 175
Debtors 5,449 2,491
Cash at bank and in hand 4,329 1,894
--------- --------
10,069 4,560
Creditors: amounts falling due within one year (4,245) (1,866)
--------- ---------
Net current assets 5,824 2,694
-------- --------
Total assets less current liabilities 6,538 2,950
Creditors: amounts falling due after
more than one year (118) (4)
Deferred income (4,705) (1,667)
--------- ---------
1,715 1,279
===== ====
Capital and reserves
Share capital 657 479
Share premium reserve 4,324 426
Goodwill reserve (5,174) (434)
Profit and loss account 1,908 797
-------- --------
Equity shareholders' funds 1,715 1,268
Minority interests - 11
-------- --------
1,715 1,279
===== =====
These financial statements were approved by the Board of Directors on 10 June
1998.
G R Selvey
P L Clifford
Directors
Company Balance Sheet at 31 March 1998
1998 1997
#'000 #'000
Fixed assets
Tangible assets 2 -
Investments 6,433 2,281
-------- --------
6,435 2,281
-------- --------
Current assets
Debtors 19 816
Cash at bank 1,436 440
-------- --------
1,455 1,256
Creditors: amounts falling due within one year (2,024) (1,874)
-------- --------
Net current liabilities (569) (618)
-------- --------
Total assets less current liabilities 5,866 1,663
===== =====
Capital and reserves
Share capital 657 479
Share premium account 4,324 426
Profit and loss account 885 758
--------- --------
Shareholders' funds 5,866 1,663
===== =====
The financial statements were approved by the Board of Directors on 10 June
1998.
G R Selvey
P L Clifford
Directors
Cash Flow Statement for the year 31 March 1998
Year ended Period ended
31 March 31 March
1998 1997
#'000 #'000
Net cash inflow from operating activities 3,344 1,006
Returns on investment and servicing of finance
Interest received 176 71
Interest paid (3) (5)
-------- --------
Net cash inflow from returns on investments and
servicing of finance 173 66
-------- -------
Taxation (299) (289)
-------- -------
Capital expenditure
Purchase of tangible fixed assets (441) (110)
Sale of tangible fixed assets 3 3
-------- -------
Net cash outflow from capital expenditure (438) (107)
--------- -------
Acquisitions and disposals
Purchase of business and subsidiary undertakings (1,688) 1,135
Disposal of subsidiary undertakings - 50
-------- -------
Net cash (outflow)/inflow from
acquisitions and disposals (1,688) 1,185
-------- -------
Equity dividends paid (201) -
Financing
Issue of shares 1,521 -
Increase/(repayment) of borrowings 62 (6)
-------- -------
Net cash outflow from financing 1,583 (6)
===== =====
Management of liquid resources*
Increase in short term deposits (1,200) (1,000)
-------- -------
Increase in cash 1,274 855
===== =====
* Comino plc includes as liquid resources term deposits of less than a year.
Notes:
1. Earnings per ordinary share have been calculated on the profit for the
financial period of #1,441,000 after taxation and minority interests and
on the weighted number of ordinary shares in issue during the period on
11,683,808.
2. The financial information set out above does not constitute the statutory
accounts for the period ended 31 March 1998. Statutory accounts for the
period will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
3. The annual report and accounts will be posted to shareholders on 17 June
1998 and will also be available on request from the Company's registered
office, 2 The Courtyard, Meadowbank, Furlong Road, Bourne End,
Buckinghamshire, SL8 5AJ.
END
FR SFDFUSUAUFEM
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