Interim Results
March 29 2007 - 3:01AM
UK Regulatory
RNS Number:9098T
PROACTIS Holdings PLC
29 March 2007
PROACTIS Holdings PLC
Interim results for the 6 months ended 31 January 2007
PROACTIS Holdings PLC ("PROACTIS" or the "Company") the specialist Spend Control
software provider, is today issuing its interim results for the 6 month period
to 31 January 2007.
KEY POINTS
* Revenues increased by 88% year on year to #1.96m (2006 : #1.04m)
* Operating profit increased twentyfold to #0.20m (2006 : #0.01m)
* Good organic growth - 14 new account wins
* On 17 November 2006, PROACTIS acquired Requisoft plc. Requisoft has
contributed #0.23m of revenues profitably and the conversion programme is
well underway
* On 28 March 2007, PROACTIS exchanged contracts to acquire Alito (UK)
Limited ("Alito"). The combination of PROACTIS and Alito presents the UK's
public sector with the strongest procurement solution available
* #0.40m invested in overhead for future revenues
Rod Jones, Chief Executive Officer, commented:
"I am delighted with the good progress that PROACTIS has made over the last six
months. It has been a period of strong growth with further penetration into our
core markets across all our channels. We have continued to invest in the product
and in sales and marketing, we have acquired one business and exchanged
contracts on another that bring real value to the Group and have positioned
ourselves well for the accelerated growth of our business.
29 March 2007
Enquiries:
PROACTIS Holdings PLC Tel: 01904 481 999
Rod Jones, Chief Executive Officer
Weber Shandwick Financial Tel: 020 7067 0700
Nick Oborne / John Moriarty / James White
Notes to editors:
PROACTIS creates, sells and maintains specialist software which enables
organisations to streamline, control and monitor all internal and external
expenditure, other than payroll. PROACTIS' software is already used by more than
200 organisations in the UK from the commercial, public and not-for-profit
sectors.
PROACTIS is a profitable, high growth business operating from York. It is a
sales led organisation with a marketing strategy involving a mix of selling
direct and selling through a number of accredited channel partners. PROACTIS
develops all of its own software with its own in-house team of developers.
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REPORT
We are delighted to report our interim results for the 6 month period to 31
January 2007.
The period has been one of continued good progress, with strong growth and
further penetration into our core markets across all our channels. We have
continued to invest in the product and in sales and marketing, we have acquired
two businesses that bring real value to the Group and we have positioned
ourselves well for the accelerated growth of our business.
PROACTIS has achieved a number of key milestones against the strategy outlined
in our 2006 Annual Report & Accounts. These were :
- Developing the accredited channel partner route to market: We have
increased our accredited channel partners by a further 3 during the period
taking our total to 15. We are beginning to see the potential worldwide
reach of our products, making our first sales into the US through this
route to market
- Increasing the direct sales force: We have recruited to plan and
invested within our direct sales force. Our product requires a high degree
of technical sales skill and lead times between recruitment and first sale
can be substantial, our new sales team members are progressing to schedule
- Implementing a marketing and public relations programme: We have
invested in marketing and advertising related overhead which has driven
recognition of the PROACTIS brand. We anticipate that this investment will
continue
- Pursuing an acquisition strategy: We have acquired Requisoft and exchanged
contracts on Alito. These are strong and complementary businesses; the
strategic rationale for each of these acquisitions and their progress is
set out below.
Acquisition of Requisoft
On 17 November 2006, PROACTIS acquired Requisoft, a recognised brand with an
excellent customer base in the commercial sector including ABN Amro, Clifford
Chance, Air Mauritius, the Army Technical Support Agency, Banco IMI London, City
of London Police, BT Syntegra, Cap Gemini, Foreign & Commonwealth Office, GNER,
HM Treasury, Herbert Smith, Craegmoor Healthcare and John Lewis Partnership. Our
strategy is to convert the customer base and pipeline to the PROACTIS solution
and make appropriate operational savings. Migration of the client base to
PROACTIS' code has been largely mapped out and the acquired direct sales team
has already made their first sales of PROACTIS product from the acquired
Requisoft pipeline. Integration of the back office has already been completed.
The initial consideration was #0.8m payable in cash as to #0.6m and loan notes
as to #0.2m repayable on 31 July 2007. In addition, and dependent on financial
performance from completion to 31 July 2007, an additional consideration capped
at #0.3m, may be paid by way of a second loan note.
Acquisition of Alito
On 28 March 2007, PROACTIS exchanged contracts to acquire Alito, another
recognised brand with an excellent customer base in the public sector totalling
over 40 local authorities and including 22 Yorkshire and Humberside authorities.
The acquisition of Alito makes PROACTIS the leading provider of spend control
software to the UK public sector and accelerates our product reach toward
contract management and tendering. It also presents excellent cross sell and up
sell opportunity of both customer bases and we have acquired an excellent team
in sales, development and support which will complement our own.
The initial consideration is #1.5m payable in cash. In addition, and dependent
on financial performance from completion to 31 March 2008, an additional
consideration capped at #1.75m, may be paid in cash or shares at PROACTIS'
option.
Financial overview
Revenues increased to #2.0m from #1.0m for the same period last year. This
includes #0.2m from Requisoft since the date of the acquisition.
The operating profit was #0.2m (6 months ended 31 January 2006 - #8,000) which
includes a positive contribution from Requisoft.
This level of profit has been achieved despite continued investment in the
future growth of the business during this last six months. The principal areas
of investment being:
- Direct sales force overhead #0.2m
- Sales and marketing overhead of #0.1m
- Investment in PLC status of #0.1m
- Research and development of our products of #0.2m
At 31 January 2007 the Group had cash of #3.0m and remained debt free, with the
exception of #0.2m of loan notes payable on 31 July 2007 in respect of the
Requisoft acquisition.
The acquisition of Alito will be recognised in the Annual Report & Accounts to
31 July 2007.
Employees and partners
The directors thank all management and staff at PROACTIS for their dedication
and commitment without which our substantial progress would not have been
possible. We offer a special thanks to our Accredited Channel Partners who
continue to promote and sell our products to great effect.
Outlook
Our continued investment in the PROACTIS brand and the acquisitions of Alito and
Requisoft strongly position PROACTIS for substantial growth. We look forward to
the continued delivery of value to our shareholders.
Alan Aubrey Rod Jones
Chairman Chief Executive Officer
28 March 2007
Consolidated Profit and Loss Account
For the six month period ended 31 January 2007
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 January 2007 31 January 2006 31 July 2006
Acquisitions Total
Note #000 #000 #000 #000
Turnover 227 1,955 1,039 2,905
Cost of sales (47) (861) (334) (1,261)
__________________________________________________
Gross profit 180 1,094 705 1,644
Administrative
costs (160) (1,076) (697) (1,747)
__________________________________________________
Operating profit | |
before exceptional | |
items | 20 18 8 479 |
Exceptional items 5 | - 182 - (582)|
|_________________________________________________|
Operating
profit / (loss) 20 200 8 (103)
Interest receivable 88 4 29
Interest payable - (4) (9)
__________________________________________________
Profit / (loss)
before taxation 288 8 (83)
Taxation 7 10 -
__________________________________________________
Profit / (loss)
for the financial
period 295 18 (83)
__________________________________________________
Earnings per share
Basic 3 1.0p 0.3p (0.5p)
__________________________________________________
Diluted 3 0.9p 0.3p (0.5p)
__________________________________________________
Basic excluding
exceptional items 3 0.4p 0.3p 2.5p
__________________________________________________
Consolidated balance sheet
As at 31 January 2007
Unaudited Unaudited Audited
31 January 2007 31 January 2006 31 July 2006
Note #000 #000 #000
Fixed assets
Goodwill 8 1,192 - -
Tangible fixed assets 30 17 18
__________________________________________________
1,222 17 18
Current assets
Debtors 1,187 458 1,105
Cash at bank 2,950 290 3,764
__________________________________________________
4,137 748 4,869
Creditors : Amounts
falling due within
one year (1,414) (634) (1,237)
__________________________________________________
Net current assets 2,723 114 3,632
Creditors : Amounts
falling due after
more than one year - (133) -
__________________________________________________
3,945 (2) 3,650
__________________________________________________
Capital and reserves
Called up share capital 3,012 728 3,012
Share premium 2,735 - 2,735
Merger reserve 556 1,796 556
Profit and loss account (2,358) (2,526) (2,653)
__________________________________________________
Shareholders' funds 3,945 (2) 3,650
__________________________________________________
Consolidated Cashflow Statement
For the six month period ended 31 January 2007
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 January 2007 31 January 2006 31 July 2006
#000 #000 #000
Operating profit / (loss) 200 8 (103)
Depreciation and amortisation 8 5 11
(Increase) / decrease in
working capital (474) (91) (110)
_________________________________________
Net cash outflow from operating
activities (266) (78) (202)
Net cash inflow from servicing
of finance 88 - 11
Net cash inflow from taxation 7 10 10
Net cash outflow from
acquisitions (623) - -
Net cash outflow from capital
expenditure (20) (4) (11)
Net cash inflow / (outflow)
from short term deposits 820 35 (3,265)
_________________________________________
Net cash outflow before financing 6 (37) (3,457)
Financing
Proceeds from the placing - - 4,000
Costs of the placing - - (335)
Shares issued from employee
share option scheme - 10 97
Loans repaid - (13) (171)
_________________________________________
Net cash inflow / (outflow)
from financing - (3) 3,591
_________________________________________
Increase / (decrease) in cash
in the period 6 (40) 134
_________________________________________
Analysis of net funds
Cash at bank and in hand 200 20 194
Short term deposits 2,750 270 3,570
Loan notes (211) (158) -
_________________________________________
Net cash 2,739 132 3,764
_________________________________________
Interim accounts
For the six month period ended 31 January 2007
Notes
1. The interim report is prepared on the basis of the accounting policies
set out in the Company's Annual Report & Accounts for the year ended
31 July 2006. The comparative figures for the year ended 31 July 2006 are
not the Company's statutory accounts for the financial period. These
accounts have been audited by the Company's Auditors. The report of the
Auditors was unqualified and did not contain a statement under Section
23(2) or (3) of the Companies Act 1985.
2. The consolidated financial statements include the financial statements
of the Company and its subsidiary undertakings.
3. The calculation of basic earnings per share for the period is based on
the profit or loss after taxation divided by the weighted average number of
ordinary shares in issue for the period being 30,122,810 for 31 January
2006 (16,264,508 for 31 July 2006 and 6,388,930 for 31 January 2005). The
weighted average number of ordinary shares used in the calculation of
diluted earnings per share for the period was 31,238,754 for 31 January
2006 (16,264,508 for 31 July 2006 and 6,388,930 for 31 January 2005).
4. There were no recognised gains or losses other than the profit for the
six month period ended 31 January 2007.
5. The exceptional credit recognised during the six month period ended 31
January 2007 is the reversal of a provision made at the time of the float,
originally charged to the profit and loss account as an exceptional item
during the year ended 31 July 2006.
6. There were no dividends for the six month period ended 31 January 2007.
7. The interim report was approved by the Board of Directors on 28 March 2007.
8. During the period PROACTIS acquired the entire issued ordinary share
capital of Requisoft plc. The Group has adopted the principles of
acquisition accounting. The assets and liabilities arising from the
acquisition are as follows :
Provisional
fair value
#000
Tangible fixed assets 13
Cash at bank and in hand (43)
Net current liabilities (371)
_________
Net liabilities acquired (401)
_________
Purchase consideration
Cash 580
Loan notes 211
_________
791
_________
Provisional goodwill 1,192
_________
Cash outflow on acquisition 623
This information is provided by RNS
The company news service from the London Stock Exchange
END
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