RNS Number:9927S
CODA plc
15 March 2007
Embargoed until 7.00am 15 March 2007
CODA plc
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
CODA plc ("CODA") announces its preliminary results for the year ended 31
December 2006. Quoted on AIM (stock code: CODA), CODA has its headquarters in
Chippenham and is a supplier of specialist software, consultancy and IT
services.
Key points:
* Financial results for 2006:
o Revenue at record levels: 5.7% ahead at #53.5m (2005: #50.6m);
o Adjusted operating profit improved by 5.9% to #10.8m (2005: #10.2m); *
o Profit before tax: #6.8m (2005: #7.1m) after charging #1.0m (2005:
#0.1m) for non-recurring costs in respect of payments from the
Employee Share Trust;
o Basic adjusted earnings per share up 10.7% to 12.4p (2005: 11.2p); **
o Basic earnings per share 6.6p (2005: 6.8p).
* Proposed final dividend increased 40% to 1.875p (2005 equivalent:
1.339p), making 2.625p in respect of this financial year (2005 equivalent:
1.875p) - also an increase of 40%. ***
* Net cash inflow from operating activities #12.6m (2005: #12.4m)
* Gross value of deferred income: #19.5m (2005: #17.5m), an increase of
11.4%.
On outlook, Executive Chairman, Graham Steinsberg stated:
"Early indications are that the factors contributing to the successes in 2006
are continuing, and our expectations for the business in 2007 remain positive."
* Adjusted profit is defined as Profit before tax, interest, goodwill
amortisation, FRS20 share based payment charges, charges arising from
payments from the Employee Share Trusts and exceptional items. See CFO
Overview for details.
Please note that these figures only include plc costs of #0.2m for the
last three months of 2006 since flotation (2005: #nil). This is also
covered in the CFO Overview.
** See Note 4
*** The figures for prior year equivalent dividends are derived - see
footnote to Chairman's Statement
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jane Curry, Investor Relations, CODA 01249 461313
Graham Steinsberg, Executive Chairman, CODA 01249 461313
Archie Berens, Pelham Public Relations 020 7743 6679 / 07802 442486
EXTRACTS FROM CHAIRMAN'S STATEMENT - GRAHAM STEINSBERG
Welcome to CODA plc's first annual results.
CODA seeks to provide stakeholders with a quality, dependable offering for the
future. To our clients we offer the highest pedigree in delivering leading,
relevant, business systems; to our shareholders a solid track record combined
with transparency and completeness of information.
2006 in highlight - a successful flotation brings an increased business focus
In September 2006 CODA successfully demerged from the CODASciSys Group and was
admitted to the AIM market. For many companies, the flotation process can be a
distracting one for management, and can lead to a focus on short-term share
price movements at the expense of the smooth running of the business. I am
delighted to report that in the case of CODA the flotation has served only to
increase our focus on the operational success of the business. Since our
admission to the AIM market the CODA business has flourished.
Operational success pre flotation. The first nine months of the year saw CODA
strengthening its capabilities and market position across many of its
territories, securing several major new clients such as car auction business
Manheim, Louvre Hotels in France and Standard Life Investments.
Operational success post flotation. In the three-month period from flotation to
31 December 2006, we recorded our largest ever international licence sale;
secured entry into the education market through one of the leading software
suppliers to that sector (RM plc); and signed major new contracts with Rail
Settlement Plan (through ATOS Origin) and NFT Distribution. The quarter was the
best on record for the CODA Group's revenues.
Results. Profits, turnover and margins all increased, reaching record levels in
2006. Operating profit before goodwill amortisation, FRS20 share based payment
charges and charges arising from payments from the Employee Share Trust improved
by 5.9% to #10.8m (#10.2m). In 2006 the operating profit was #6.6m (2005:
#7.0m). Turnover increased by 5.7% to #53.5m (#50.6m).
Cash. Operating cash flows remained positive and the year end net cash position
was #1.8m (2005: #4.9m), after repayment of a loan totalling #8.5m to CODASciSys
plc (CODA's previous parent company, now renamed SciSys plc) and making a loan
of #4.5m to an Employee Share Trust. The disposal of Methuen Park since the
period end yielded a further #8.4m net of costs. The Board's strategy is to use
cash reserves to improve overall shareholder returns. The prime focus will
remain on targeted acquisitions and cash will be retained within the business to
facilitate this. However, dividends also represent an important mechanism for
returning value to shareholders, and therefore to reflect the past growth in
profitability and our strong cash position, we are recommending a final dividend
of 1.875p per share (prior year equivalent: 1.339p). This makes a total of
2.625p for the year (prior year equivalent: 1.875p) - an increase of 40% for the
full year. (N.B. The figures for prior year equivalent dividends are derived -
see footnote.)
Staff participation. The results for the year reflect the dedication, commitment
and professionalism of all members of staff. I would like to take this
opportunity to thank them on behalf of the Board for their invaluable
contribution to these results.
The Board. During the period, Cliff Preddy announced that he would step down
from the Board following the 2007 AGM. Cliff has provided exceptional service to
both the CODA and the CODASciSys Groups throughout his ten years with us. He
helped guide us through the initial flotation of the then Science Systems Group,
before providing invaluable advice through the acquisition of CODA and the
eventual demerger of the CODASciSys Group. He had always signalled that, in
keeping with best practice, 2007 would be his final year with us. We wish him
well for the future.
One of Cliff's final duties was to ensure that the new Non-Executive Directors
to be appointed were of the highest calibre. In helping select Mark Wells (to
become Deputy Chairman and Senior Independent Non-Executive Director once Cliff
leaves) and Mike Greig (Audit Committee Chairman), he has clearly achieved this.
In keeping with best corporate governance practice, we are now actively engaged
in recruiting a third non-executive member of the board. We were also delighted
when our Company Secretary, Dave Belmont, was named Company Secretary of the
Year (Public Companies) in June last year.
The future. The Board's attention remains focused on the continued growth of
the CODA Group. This will be both organic - from the continued investment in
our delivering our product range and in expanding our distribution capabilities
- and from carefully selected acquisitions. Early indications are that the
factors contributing to the successes in 2006 are continuing, and our
expectations for the business in 2007 remain positive.
Footnote
CODA was still part of CODASciSys plc in 2005 and therefore did not pay a
dividend during that year. The prior year figures have been calculated as 80.4%
of the dividends paid by CODASciSys plc in 2005, and then divided by three to
reflect the issuing at the demerger of three CODA shares for every CODASciSys
share. The 80.4% is the same proportion as the interim dividend paid by CODA plc
in October 2006 of 2.25p (0.75p per share after adjustment for the 3 for 1 "
split"), compared with the total of the interim dividend that was paid at the
time (2.8p) for the equivalent of each CODASciSys share.
EXTRACTS FROM GROUP CHIEF EXECUTIVE OFFICER'S REVIEW - JEREMY ROCHE
I am pleased to report that CODA made considerable progress on many fronts in
2006. It has been a year in which we made some impressive sales in a highly
competitive and consolidating market, started to establish CODA as a credible
force in its new territories, and built new partnerships for the future.
Clients count on CODA
Product sales are key to our business. They not only deliver licence revenues
but are the basis of our maintenance streams and a rich source of services
business. During 2006, we secured a record number of licence sales with both new
and existing clients. Success was spread widely across our territories.
Our most publicised sales during the year was a contract with Caterpillar, the
world's largest manufacturer of construction and mining equipment, diesel and
natural gas engines and industrial gas turbines.
Under the contract, Caterpillar will replace its current dealer finance systems
and implement our global accounting solution across its own sites and its
dealers worldwide. Not only was this CODA's largest ever licence sale, it also
provides many additional opportunities for products and services within the
Caterpillar community. CODA will be working closely with this client over the
next three years to help deliver a successful solution.
However, although this contract received the most publicity, it was far from our
only major success.
Our French operation recorded one of CODA's largest European deals, when it
secured the contract to provide financial management systems across Europe to
Louvre Hotels. The group operates under well-known hotel brands, including
Concord and Campanile.
In the UK, we continued our excellent track record. For example, in the
financial services sector we secured a contract with Standard Life Investments,
where CODA was chosen to support the company's continuing expansion plans,
whilst in transport and distribution, we secured contracts with Atos Origin for
the Rail Settlement Plan and with NFT.
Acquisitions integrated
A key objective of 2006 was to ensure that the acquisitions made during the
previous year in France, Sweden, Hungary and Germany were fully integrated into
the CODA organisation. The initial results from the integration are pleasing,
and our reviews show that we are providing the levels of quality service to
clients in these territories for which we have become well known elsewhere. All
of the acquisitions have delivered results in line with, or ahead of, the
expectations we had at the time they were made.
As part of the Nordic acquisition, we also acquired a development capability in
Estonia, where the OCRA consolidation suite is developed. During the year, two
releases of this suite were made, both enhancing its international capabilities.
These releases, and a detailed skills transfer programme, allowed us to secure
early sales internationally.
Within the Nordic region itself, the Swedish operation has built a team with
CODA-Financials capabilities to supplement the existing OCRA skills. This
quickly proved its worth, addressing latent demand for consulting services from
our many long-standing Nordic clients such as OMX, the operator of stock
exchanges in the Nordic and Baltic regions.
Our operation in Budapest continued its strong consulting-led approach to sales,
creating business not only in Hungary itself, but in Poland and Romania too. As
we identified at the time of the acquisition, we used this office to facilitate
the opening of a new office in Prague, from where we are already providing
consulting services to existing clients in the Czech Republic.
The acquisition of our German distributor in late 2005 gave us the opportunity
to build a strong services operation. During 2006, we strengthened the sales and
marketing operation, with a view to growing the business more aggressively. It
is a large, growing market, where many local competitor systems appear to lack
sustained investment, and where we therefore see good opportunities. The
pipeline is already beginning to support this view. It is particularly
pleasing, therefore, to see the high level of interest in CODA's specialist
offering "Fast Close", which assists Finance Directors (including those with SAP
(R) applications installed) to close off their books more rapidly at month end.
Competitive landscape
The competitive landscape continued to change in 2006, as more software houses
were bought by consolidators. Particularly significant to CODA was the
acquisition of UK-based financial systems house Systems Union plc by Infor, a
US-based consolidator backed by a private equity organisation. Such
acquisitions, where multiple overlapping products are brought together,
inevitably cause nervousness amongst their user bases.
This in turn presents opportunities for CODA, with our clear focus on financial
management systems, strong track record on investment and support for our
products, and stable financial position. We constantly monitor such situations
and put in place appropriate campaigns to offer organisations viable, affordable
options to migrate to CODA.
Customers count on CODA for support
Customer support and account management continue to be major focuses for CODA,
and customer events were at the centre of that in 2006. The Nordic user
conference in May was an opportunity to introduce OCRA clients to CODA products
and vice versa. In June, the UK attracted a record number to a series of user
conferences around the country, whilst other events took place in the US,
Netherlands, Belgium, France and elsewhere.
Such events are important showcases for us to launch and demonstrate add-on
products and services to clients and help them get more value from their CODA
systems.
Partners
CODA's strategic partnership with Microsoft, first announced in 2005, has
progressed well in the areas of both development and marketing. It has given us
extensive access to the development teams on Vista and Office 2007, and we have
used this close cooperation to build in some powerful capabilities into project
Neon, a major product release currently scheduled for mid 2007. Users are
increasingly demanding better integration between desktop applications like
Microsoft Office, and their business applications like CODA-Financials and
Dream. Our relationship with Microsoft positions us well to deliver this.
Microsoft continued to co-fund marketing activities around the group, and this
should continue through 2007. The partnership on a territory level is developing
yet further, as we work together to help grow CODA's sales in certain regions
where our operations are still relatively small.
A brand new relationship in 2006 was that with SAP. Our process control tool,
CODA-Control Manager, is independent of business system and we recognised that
SAP users, like all businesses, face considerable challenges trying to control
business processes such as the month end closing of their books.
Following discussions with SAP, we launched a version of Control Manager called
Fast Close by CODA, specifically for SAP users. It received a number of
certifications from SAP itself. The marketing campaigns for the product have
raised considerable interest, particularly, as mentioned above, in SAP's home
market of Germany, where the pipeline is now very healthy for that solution.
Fast Close allows us to engage with some very large enterprises with an SAP
strategy (which CODA would traditionally have been unable to penetrate),
creating opportunities for licence, maintenance and services revenue.
Marketing
Staff. As the year progressed, there was increasing evidence across our markets
of an upturn in the opportunities for CODA. Towards the end of the year we
therefore increased our investment in marketing staff in a number of the
territories, positioning us to take full advantage of this.
Internet. Prospective clients are increasingly using the Internet as their main
source of early evaluation of the market. To ensure we remain firmly in the
public gaze, we increased our investment in web capabilities. This included a
relaunch of our newly designed corporate web site. The customer web site
continues to be developed as a facility to provide self-service support to
clients and to create cross-selling opportunities. More resource has been put
into optimising the corporate site to attract web searches and search term
advertising to improve our visibility to customers using the main Internet
search engines. This has paid off, with significant growth in visitor numbers
and enquiries on the site.
Product. CODA continues to dedicate significant resources to product
development, to ensure we remain at the forefront of the market and continue to
provide value for money to our clients in return for the maintenance payments
they make.
A key focus for the development organisation in 2006 was Project Neon, the major
new release of the core Financials and brand new procurement application,
scheduled for launch in mid 2007. This release should provide CODA with
significant consulting revenues from existing clients seeking to exploit the new
capabilities. It should also deliver additional licence and service revenues
from new business. Early market feedback has been positive and suggests that the
new release will further improve CODA's position in the market.
Other products were enhanced in 2006. OCRA, the consolidation product acquired
in 2005, was further developed and versions 3.1 and 3.2 released, enhancing
areas such as support for UK and US accounting procedures, and translating the
product into multiple languages for the first time. These greatly improved our
ability to sell the product to groups based outside of Sweden, the product's
home market. Early sales in the UK, the US and the Netherlands were made. These
include a number of companies who were not previously CODA clients.
We also made a new release of our business intelligence platform,
CODA-Intelligence, developed using Microsoft SQL Server 2005, along with a brand
new analysis product, Analytic Explorer. This is designed to greatly increase
the penetration of our Business Intelligence offering across our client base, as
well as enhancing the overall appeal of the CODA product suite.
The CODA-Control suite saw several new releases, growing CODA's solution for
Governance, Risk and Compliance, and addressing continuing demand for solutions
in this area. Our offering is attractive and helps clients with their compliance
problems across a range of requirements including regimes such as Sarbanes-Oxley
in the US and J-SOX (the Japanese equivalent). It does this, for example, by
facilitating the handling of processes such as period close, an important
element in any organisation's performance and compliance efforts. Early examples
of clients who are benefiting from such software include AXA Insurance.
Corporate responsibility
Our future strength will clearly be determined by our internal financial health.
However it will also be determined by how we contribute to the health of those
around us. Simultaneous with our admission to the AIM market, we announced our
corporate responsibility (CR) strategy and initial programme of actions. This
formalised our ongoing activities with respect to the environment, market and
communities in which we operate, and set clear objectives for the company in the
future.
This strategy is built upon the premise that bottom-line benefits will accrue
from being a good corporate citizen. In the long run, we would expect to see
both cost savings and improved revenues from our activities. These activities
include recycling targets and energy management in the larger offices, as well
as travel management and better use of existing video, web and tele-conference
facilities. Our aim to act as a good corporate citizen and our alignment with
community issues are also highlighted. The ever-increasing awareness of the
importance of CR programmes also presents revenue opportunities to CODA. These
include the use of our Control Manager application, for implementing and
managing CR programmes and processes in medium and large organisations.
Throughout 2006, CODA has continued to enhance its market position. It has won
new clients and looked to enhance relationships with its existing ones. It has
created new partnerships and brought to market new and ever more meaningful
offerings to address the opportunities and challenges facing today's CFOs. And
we have sought to do all of this, whilst remaining sensitive to our obligations
for Corporate Responsibility.
Looking ahead, CODA remains committed to the path it has been following,
building a successful company with a sustainable future. We remain positive
about our outlook in 2007.
EXTRACTS FROM THE CHIEF FINANCIAL OFFICER'S REVIEW - BRYAN HUCKER
The CODA business has undergone a major transformation during the year, having
demerged from SciSys plc (formerly CODASciSys plc) and being admitted to AIM on
26 September 2006. I am delighted to report that this was achieved with minimal
disruption to the business whilst at the same time achieving its objective of
increasing shareholder returns, and benefiting from greater transparency and
focus. It had become apparent that the previous structure was not conducive to a
clear understanding of the business by its various stakeholders. Furthermore,
once the CODA-related business of SciSys was integrated into the CODA division
(upon the acquisition of CODA in 2000), the two underlying parts of the
resulting CODASciSys plc benefited little by remaining within the same group.
Revenues
I am pleased to report an increase in Group turnover of 5.7% to #53.5m from
#50.6m in 2005, whilst at the same time margins based on the Adjusted operating
profit (as described in the table on the next page) increased to 20.2% (2005:
20.1%). The Adjusted annualised operating profit (to reflect that plc costs were
only incurred during the last three months of 2006 - again, see table), also
improved to 19.3% in 2006 (2005: 18.8%). The 2006 operating profit margin was
12.3% (2005: 13.8%).
Adoption of FRS20 Share Based Payments
The Group has been obliged to adopt the accounting standard FRS20 Share Based
Payments for the first time during 2006 which results in a charge to operating
profit for the year of #0.2m (2005: #0.2m). For the purposes of FRS20, the
Group's Executive Share Ownership Plans are equity settled schemes. As a result,
there is no reduction of shareholder assets and there is a corresponding credit
to reserves.
Employee Share Trust payments
During the year, as part of the demerger arrangements, the Employee Share Trust
was wound up, surplus funds being distributed to its beneficiaries, the
employees of the company. Since the payments were made to the beneficiaries as a
result of their employment, the company is required to include such payments as
a charge to operating profit. There is no reduction in shareholder assets in
respect of the actual payment, except that the company is obliged to pay
associated social security payments, and therefore there is a corresponding
adjustment to reserves.
Operating profit
Operating profit was #6.6m (2005: #7.0m), however this was after charges in
respect of FRS20 and the Employee Share Trust payments noted above. The "
Adjusted operating profit", after adding back those charges together with
associated social security costs, and goodwill amortisation, as shown on the
face of the Group profit and loss account, was #10.8m (2005: #10.2m). It should
be noted however that both the operating profit and the Adjusted operating
profit include plc costs only for the period since the demerger, being 26
September 2006 to 31 December 2006.
The table below sets out an adjustment to both the operating profit and the
Adjusted operating profit to take account of the additional costs that would
have been incurred had plc costs been included for a full year.
Operating profit Adjusted operating
profit
2006 2005 2006 2005
#000 #000 #000 #000
Per Group profit & loss account 6,559 6,976 10,762 10,151
Including plc costs for three months
(note 5):
Operating costs 168 - 168 -
FRS20 Share Based Payments 39 - - -
Trust payment including social security (non-recurring) 108 - - -
315 - 168 -
Deduct head office costs for 12 months:
Operating costs multiplied by 4 (672) (672) (672) (672)
FRS20 Share Based Payments multiplied by 4 (156) (156) - -
Trust payment including social security (non-recurring) (108) - - -
(936) (828) (672) (672)
Annualised operating profit 5,938 6,148
Annualised Adjusted operating profit 10,258 9,479
Exceptional items
There were two exceptional items during the year, being costs of the demerger of
#0.5m and a profit of #0.5m arising from the disposal of the Bristol office to
SciSys plc.
Business Collaborator - continued strong performance
We are delighted that the strong performance in 2005 has continued again in
2006. The membership of the SEDEX program (Supplier Ethical Data Exchange) has
continued to grow. This, together with significant new customers gained during
the year has resulted in operating profits (before goodwill amortisation) of
#0.5m (2005: #0.3m) and an operating profit of #0.1m (2005: #nil). Operating
profit margins (before goodwill amortisation) reached 19.9% for the year.
Operating profit margin 5.9% (2005: 0.1%)
Product investment
Within the CODA Division, we continued our significant product investment
programme. In the year, we spent #9.3m (2005: #8.8m). All product development
costs are written off in the year in which they occur.
Deferred income
Gross fees in respect of licences for which the revenue has been deferred
increased to #4.3m (2005: #3.7m). When adjusted for amounts not yet invoiced in
respect of those gross fees this reduces to #2.8m (2005: #3.5m). Deferred
maintenance income increased to #14.7m (2005: #13.1m) and advance payments for
consultancy were #0.6m (2005: #0.7m). In total, at the year end, deferred income
was #18.1m (2005: #17.3m) which is made up of #17.7m for CODA and #0.4m for
Business Collaborator.
Cash management
The Group has continued to benefit from strong cash flows, with net cash inflow
from operating activities for the year being #12.6m (2005: #12.4m). However,
cash balances have fallen from #4.9m to #1.8m, the result of the repayment of
loans of #8.5m to its previous parent company CODASciSys plc (now renamed SciSys
plc) as a part of the demerger process. In addition, the Group loaned #5.0m to
fund the purchase of own shares by employee share trusts including a loan of
#4.5m to the SciSys No. 1 Trust to provide funding for existing shares held in
that trust for the benefit of employees of CODA. A further #0.5m represents the
purchase of own shares by the CODA No. 1 Trust. The majority of this loan is
expected to be repaid to CODA by early 2008. Following the period end, the
disposal of the Methuen Park office has generated #8.4m after costs and a profit
on disposal of #2.8m.
Currency
During the year, the Group benefited from net exchange gains of #0.1m (2005:
losses of #0.1m.)
Tax
The effective tax rate (being the tax charge as a percentage of profit on
ordinary activities before taxation and goodwill amortisation) for the Group of
21.3% (2005: 21.3%) remained below the standard rate of corporation tax in the
UK, due principally to the effect of tax credits available on Research and
Development expenditure made by the Group.
Dividend
The proposed final dividend for the year ended 31 December 2006, of 1.875p per
share, will be paid on 8 June 2007 to shareholders on the register at 25 May
2007. The shares will go ex-dividend on 23 May 2007.
Group Profit and Loss Account
for the year ended 31 December 2006
2006 2005
#000 #000
Turnover 53,468 50,564
Staff costs (28,588) (26,854)
Depreciation (1,219) (1,306)
Amortisation of goodwill (3,013) (2,820)
Other operating charges (14,089) (12,608)
(46,909) (43,588)
Operating profit 6,559 6,976
"Adjusted operating profit" 10,762 10,151
being operating profit before
goodwill amortisation,FRS20
Share based payment charges and
charges arising from payments
from the Employee Share Trust
FRS20 Share based charges (203) (239)
Payments from the Employee
Share Trust (875) (103)
Social Security Charges
relating to the trust payments (112) (13)
Goodwill amortisation (3,013) (2,820)
Operating profit 6,559 6,976
Other interest receivable 356 100
Interest payable and similar (68) (6)
charges
Exceptional items (6) -
Profit on ordinary activities before 6,841 7,070
taxation
Tax on profit on ordinary (2,102) (2,108)
activities
Profit for the financial year 4,739 4,962
Earnings per share
Basic 6.6p 6.8p
Diluted 6.2p 6.5p
All operations are continuing in both the current and previous year.
Group Balance Sheet
at 31 December 2006
2006 2005
#000 #000 #000 #000
Fixed assets
Intangible assets 36,562 39,858
Tangible assets 12,541 12,797
49,103 52,655
Current assets
Investments 864 -
Debtors 17,686 17,445
Cash at bank and in hand 1,802 4,934
20,352 22,379
Creditors: amounts
falling due within one year (10,610) (16,745)
Net current assets 9,742 5,634
Total assets less current liabilities 58,845 58,289
Creditors: amounts
Falling due after more than one year - (1,206)
Deferred income (18,074) (17,332)
Net assets 40,771 39,751
Capital and reserves
Called-up share capital 19,243 19,243
Merger reserve 28,008 26,655
Profit and loss account (6,480) (6,147)
Shareholders' funds 40,771 39,751
Group Cash Flow Statement
for the year ended 31 December 2006
2006 2005
#000 #000 #000 #000
Net cash inflow from operating activities 12,571 12,404
Returns on investments and servicing of finance
Interest received 356 100
Interest paid (68) (6)
Net cash inflow from returns on investments and 288 94
servicing of finance
Taxation
UK and overseas corporation tax paid (1,007) (2,419)
Capital expenditure and financial investment
Payment to acquire tangible fixed assets (1,400) (1,210)
Payments to acquire investment in (4,977) -
own shares
Receipts from sales of tangible fixed assets 908 2
Issue of shares by subsidiary company to 4,000 2,000
former parent company
Reorganisation of subsidiary companies prior (2,647) -
to demerger
Net cash (outflow) / inflow from capital (4,116) 792
expenditure and financial investment
Acquisitions
Purchase of CODA France - (1,723)
Purchase of CODA Nordic - (2,110)
Settlement of Nordic royalty - (365)
Purchase of other CODA subsidiaries - (549)
Demerger costs (492) -
Net cash outflow from acquisitions (492) (4,747)
Equity dividends paid (2,038) (2,700)
Net cash inflow before financing 5,206 3,424
Financing
Repayment of loan to former parent company (8,459) (1,811)
Net cash inflow from financing (8,459) (1,811)
(Decrease) / increase in cash in the year (3,253) 1,613
Reconciliation of operating profit to net cash inflow from operating activities
2006 2005
#000 #000
Operating profit 6,559 6,976
Depreciation charge 1,219 1,306
Amortisation of goodwill 3,013 2,820
Exchange (gains) / losses (110) 51
FRS20 share based payment charge 203 239
Trust payments charged to operating profit 875 103
(Increase) / decrease in debtors (392) 142
Increase / (decrease) in creditors and deferred income 1,204 767
Net cash inflow from operating activities 12,571 12,404
Reconciliation of net cash flow to movement in net debt
2006 2005
#000 #000
(Decrease) / increase in cash in the year (3,253) 1,613
Exchange adjustments 121 (79)
(3,132) 1,534
Net cash at beginning of year 4,934 3,400
Net cash at end of year 1,802 4,934
Analysis of net debt
At 1 January Cash flow Other At 31 December
2006 movements 2006
#000 #000 #000 #000
Cash at bank and in hand 4,934 (3,253) 121 1,802
Reconciliations of Movements in Shareholders' Funds
for the year ended 31 December 2006
GROUP 2006 2005
#000 #000
Profit for the financial year 4,739 4,962
Dividends (2,038) (2,700)
Retained profit for the financial year 2,701 2,262
Exchange adjustments - 2
FRS20 Share Based Payments 203 239
Amounts charged to profits paid by Trust 875 103
Net movement of shares owned in Employee Share Trust (4,112) -
Issue of shares by subsidiary company to former parent company 4,000 2,000
Reorganisation of subsidiary companies prior to demerger (2,647) -
Net addition to shareholders' funds 1,020 4,606
Opening shareholders' funds 39,751 35,145
Closing shareholders' funds 40,771 39,751
Statement of Total Recognised Gains and Losses
for the year ended 31 December 2006
GROUP 2006 2005
#000 #000
Profit for the financial year 4,739 4,962
Exchange adjustments - 2
Total recognised gains and losses 4,739 4,964
1. Dividends 2006 2005
#000 #000
Dividend paid by CODA Group International Ltd. to SciSys plc 1,500 2,700
(formerly CODASciSys plc), former parent company, prior to the
demerger
Interim dividend paid by CODA plc to shareholders since the 538 -
demerger at 0.75p per share
2,038 2,700
The dividend payment by CODA Group International to SciSys plc, its parent
company at that time, was made as a part of the demerger arrangements to create
sufficient reserves in SciSys plc to allow the demerger to take place, including
payment of the special dividend by SciSys plc.
The Group paid an interim dividend of 0.75p per share in October 2006 and is
recommending a final dividend of 1.875p per share. This makes a total of 2.625p
for the year. However, FRS21 "Events after the balance sheet date", requires
that dividends should not be recognised in the accounts of the Company until
such time as they have been formally declared, or in the case of interim
dividends, paid.
2. Deferred income 2006 2005
#000 #000
GROUP
Gross licence fees in respect of deferred licences 4,258 3,657
Maintenance 14,709 13,118
Consultancy / other 575 745
19,542 17,520
Less amounts not invoiced in respect of gross licence fees (1,468) (188)
18,074 17,332
3. Basic & diluted earnings per share
The calculation of the Group basic and diluted earnings per ordinary share is
based on the following data:
------------------ 2006 ------------------- ---------------- 2005 -------------------
Profit Weighted Excluding Net Earnings Profit Weighted Excluding Net Earnings
after average own shares number per share after average own shares number per share
tax number of held of tax number of held of
shares shares shares shares
in issue in issue
#000 '000 '000 '000 p #000 '000 '000 '000 p
Basic earnings per 4,739 76,794 (4,442) 72,352 6.6 4,962 76,794 (4,118) 72,676 6.8
ordinary share
Diluted earnings 4,739 76,794 - 76,794 6.2 4,962 76,794 - 76,794 6.5
per share
Own shares held
"Own shares held" represent the number of shares in the CODA No 1 Employees' Share Trust together
with the number of shares held in the SciSys No. 1 Employees' Share Trust held specifically for CODA
employees.
Diluted earnings per share
The calculation of the diluted earnings per share does not take into account the number of shares in
either the CODA No 1 Employees' Share Trust or the SciSys No. 1 Employees' Share Trust since these
shares have been awarded under the Executive Share Ownership Plan. The calculation does take into
account the number of share options outstanding during the year, however there were nil in 2006
(2005: nil).
4. Adjusted earnings per share
The adjusted profit after taxation is calculated in the table below
2006 2005
#000 #000
Profit on ordinary activities after taxation 4,739 4,962
Adjusted for
FRS20 Share Based Payment Charges 203 239
Payments from the Employee Share Trust 875 103
Social Security Charges relating to the trust distributions 112 13
Goodwill amortisation 3,013 2,820
Adjusted profit after taxation 8,942 8,137
Using the adjusted profit after taxation, the calculation of the Group's basic
adjusted and diluted adjusted earnings per share is based on the following data:
------------------ 2006 ------------------- ---------------- 2005 ----------------
Adjusted Weighted Excluding Net Earnings Adjusted Weighted Excluding Net Earnings
profit average own number per profit average own number per
after number shares of share after number shares of share
tax of held shares tax of held shares
shares shares
#000 '000 '000 '000 p #000 '000 '000 '000 p
Basic 8,942 76,794 (4,442) 72,352 12.4 8,137 76,794 (4,118) 72,676 11.2
adjusted
earnings per
ordinary
share
Diluted 8,942 76,794 - 76,794 11.6 8,137 76,794 - 76,794 10.6
adjusted
earnings per
share
Own shares held
"Own shares held" represent the number of shares in the CODA No 1 Employees' Share Trust
together with the number of shares held in the SciSys No. 1 Employees' Share Trust held
specifically for CODA employees.
Diluted adjusted earnings per share
The calculation of the diluted adjusted earnings per share does not take into account the
number of shares in either the CODA No 1 Employees' Share Trust or the SciSys No. 1
Employees' Share Trust since these shares have been awarded under the Executive Share
Ownership Plan. The calculation does take into account the number of share options
outstanding during the year, however there were nil in 2006 (2005: nil).
5. Segmental information
Segmental analysis of turnover, profit before interest and taxation, and net assets
The Group provides services and business solutions based on IT technologies. It comprises:
* CODA - whose principal business is the delivery of Financial Management systems to medium and
large organisations worldwide, with a focus on accounting and procurement, analytic and compliance
solutions.
* Business Collaborator - a provider of collaboration software and services for the
construction, financial, retail and utility sectors
* plc - the head office function of the listed company.
Turnover 2006 2005
#000 #000
CODA 51,118 48,641
Business Collaborator 2,350 1,923
Total Turnover 53,468 50,564
Adjusted operating profit / (loss)
2006 2005
#000 #000
CODA 10,463 9,742
Business Collaborator 467 293
plc costs (168) -
Total adjusted operating profit 10,762 10,035
Operating profit / (loss) #000 #000
CODA 6,735 6,972
Business Collaborator 139 4
plc costs (315) -
Total operating profit 6,559 6,976
6. Exceptional items 2006 2005
#000 #000
Exceptional items consist of:
Profit in the sale of Clothier Road, Bristol from CODA Resources
Ltd to SciSys UK Ltd for a consideration of #800,000, creating a
profit before tax of 486 -
Costs relating to the admission of CODA plc to the Alternative
Investment Market of the London Stock Exchange as part of the
demerger arrangements from SciSys plc (previously CODASciSys plc) (492) -
(6) -
7. Investments 2006 2005
#000 #000
Listed investments 864 -
Listed investments consist of shares in SciSys plc held by the SciSys No 1 Employee Share Trust.
This trust has been consolidated within the results of the Group to the extent that it holds shares
on behalf of employees of the Group.
8. Annual Report
The financial information set out above does not constitute the Company's statutory accounts for the
years ended 31 December 2006 or 2005. The financial information for 2005 is derived from the statutory
accounts for 2005 in respect of the Group's companies which have been delivered to the Registrar of
companies. The auditors have reported on both the 2006 and 2005 accounts; their report was unqualified
in both years and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The statutory accounts for 2006 will be delivered to the Registrar of companies following the Company's
Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USVWRBSROAAR
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