Final Results
April 25 2007 - 5:45AM
UK Regulatory
Stockcube PLC
1
Stockcube Plc ("Stockcube" or "the Company")
Preliminary Results for the year ended 31 December 2006
Highlights
2006 2005
�000 �000
Turnover 2,713 2,420
Profit before tax, impairment and amortisation of 507 433
goodwill
Profit before tax 488 251
Profit after tax 344 164
Earnings - pence per share - basic 3.6p 1.7p
Earnings - pence per share - diluted 3.0p 1.5p
* Group turnover 12% up on last year.
* Profit before tax, impairment and amortisation of goodwill up 17% to �507,000.
* Profit before tax and impairment up 22% to �488,000.
* All elements of business show satisfactory performances.
* Strong balance sheet with net assets of 48.3p per share, of which 43.5p is cash.
* Earnings per share before impairment up 10% to 3.6p
* Dividend (proposed) increased by 33% to 1.0 pence per share.
Julian Burney, Chief Executive Officer, said:
"We have continued to invest in our business during 2006 principally in the quality of our staff and
their remuneration structure in order to give us a broader and more stable platform for 2007 and
beyond. While the payment procedures of some of our institutional customers, following regulatory
clarification of research expenditure, have taken somewhat longer to bed in than we and similar firms
would have wished we are able to report a 22% increase in profit before tax and impairment over
2005. We are hopeful that these payment procedures will enhance out ability both to procure customers
and to receive timely and transparent payments.
"While we remain alert to growth by acquisition we have concluded that our business and our
shareholders' interests will be better fulfilled through organic growth in the services we offer. The
effectiveness of our consultancy services is dependent on building over time long-term relationships
so we can tailor our advice to clients' needs and our web-based wider market services are highly
scaleable from relatively fixed analytical and technology basis. We are now generating growing and
sustainable profits and cash from our trading activities and so, following discussion with our
advisers, we propose to return surplus cash of 25p per share to shareholders.
For further information:
Stockcube plc Julian Burney 020-7352-4001
Blue Oar Securities Plc David Seal 020-7448-4400
Blue Oar Securities was formerly Corporate Synergy Plc and acts as Nominated Adviser & Broker for
the Company
Stockcube Plc
Chairman's Statement
Introduction
We continue our steady progress to establish Stockcube through organic growth as a leading provider of
financial research and analysis.
Financial review
Turnover for the year ended 31 December 2006 was �2,713,000 - an increase of 12.1% over last year
(2005: �2,420,000). Profit before tax and amortisation of goodwill was �507,000, an increase of 17%
over 2005 (�433,000, before impairment)). Basic earnings per share were 3.6p per 10p ordinary share,
an increase of 10% over 2005 (3.3p per ordinary share before impairment)
Our balance sheet had net assets of 48.3p per share at 31 December, 2006, of which 43.5p was in cash.
Business review
Turnover from Stockcube Research, our institutional consultancy service increased by 16% over 2005. We
now have a solid foundation of motivated young analysts supported by a number of experienced
technicians. We expect the teething problems experienced by a number of our customers in interpreting
new regulatory requirements introduced in mid-2006 for paying for research will soon evolve into an
efficient and effective mechanism.
The enhanced immediacy of the Fullermoney service through its daily on-line and audio formats,
together with the introduction of equity chart libraries and enhanced charting graphics, have helped
to generate an encouraging 34% increase in the number of subscriptions during the year. Revenues from
subscriptions have increased by an excellent 53% as unit prices are being steadily increased. Our bi-
annual London Chart Seminars continue to sell-out. The non-recurrence of some one-off specialist
consultancy work undertaken in 2005 has reduced year-on-year profit growth to 23% but this was
nevertheless a very healthy result from a highly-scalable service.
Investors Intelligence online produced a very pleasing increase of 26% in revenues and continues to
position itself as a business to business provider of generic statistical analysis and bespoke
research. We also sell our current and historical data to third party users for on-publication or as a
component in their own analytical models.
Income from our US subsidiary, Chartcraft, was up by 9% over 2005 in US dollar terms but due to the
dollar's weakness against sterling showed a drop of 17% when translated.
Ecube, our in-house software business, continues to develop and support the group's technology needs
and to provide invaluable web-based services to its third party customers.
Repayment of surplus cash to shareholders
As the group is cash positive and now generating sustainable operating profits we have been reviewing
the structure and composition of our balance sheet and our potential funding requirements.
While we continue to look closely at strategic acquisitions and other business alliances to expand
more quickly our core operations we have, for some time, emphasised our position as a leading
technical analysis business and, in particular, the organic strengths of our institutional advisory
consultancy and the scalability of our online wider market services. We have seen few businesses that
would add shareholder value or enhance earnings sufficiently to encourage us to take un-necessary risk
or venture far outside our proven expertise. We have concluded, therefore, that we should return a
substantial proportion of our cash deposits to shareholders for them to employ elsewhere.
Such return of surplus capital will not deflect us from succeeding with our aims of providing high
quality services to our customers and sustained annual returns to shareholders.
Accordingly, we are proposing a capital reconstruction and repayment which, following shareholder and
Court approval, will return 25p per ordinary share to shareholders.
The Company will be shortly sending out a circular explaining the proposed return of approximately
�2.4million to shareholders by way of capital reorganisation together with a Notice of Extraordinary
General Meeting.
Copies of the circular will be available free of charge during normal business hours on any weekday
(except Saturday, Sunday and public holidays) at the offices of the Company at Unit 1.23, Plaza 535,
King's Road, London SW10 0SZ from the date of the circular for a period of one month.
Staff
Once again I should like to thank all our staff for their continued efforts during the year.
Dividend
We are pleased to seek shareholder approval for a dividend of 1.0 pence per share in respect of the
results for 2006, an increase of 33% over 2005.
Outlook
The current year has started satisfactorily and we expect continued and sustained growth in our
business for the foreseeable future.
Edward Forbes,
Chairman,
London
25 April 2007
Profit and Loss account
For the year ended 31 December 2006
2006 2005
�000 �000
Turnover 2,713 2,420
Administrative expenses (2,424) (2,188)
------- -------
Group operating profit 289 232
Impairment in associate - (150)
Share of associate profit for the year 11 6
Amortisation of goodwill (17) (30)
(6) (174)
Total operating profit: group and share of associate 283 58
Interest receivable and similar income 205 193
------- -------
Profit on ordinary activities before taxation 488 251
Tax on profit on ordinary activities (144) (87)
------- -------
Profit on ordinary activities after taxation 344 164
------- -------
Basic earnings per share 3.6p 1.7p
Diluted earnings per share 3.0p 1.5p
All amounts relate to continuing operations.
Group Statement of Total Recognised Gains and Losses
2006 2005
�000 �000
Profit for the financial year excluding share of profit of associate 333 158
Share of associate profit for the year 11 6
------- -------
Profit for the financial year attributable to members of the parent 344 164
company
Exchange differences on retranslation of net assets of subsidiary
undertaking 33 (28)
------- -------
Total recognised gains/(losses) during the year 377 136
------- -------
Group Balance Sheet
At 31 December 2006
2006 2005
�000 �000
Fixed assets
Intangible assets 16 17
Tangible assets 336 327
Investments in associate 220 226
------- -------
572 570
Current assets ------- -------
Debtors 719 426
Cash at bank and in hand 4,185 3,900
------- -------
4,904 4,326
Creditors: amounts falling due within one year (825) (550)
------- -------
Net current assets 4,079 3,776
------- -------
Total assets less current liabilities 4,651 4,346
------- -------
Capital and reserves
Called up share capital 961 961
Share premium account 3,774 3,774
Merger reserve 568 568
Profit and loss account (652) (957)
------- -------
Equity shareholders' funds 4,651 4,346
------- -------
The financial statements were approved by the Board on 25 April 2007 and signed on its behalf
Julian Burney
Director
Group Statement of Cash Flows
For the year ended 2006
2006 2005
�000 �000
Net cash inflow from operating activities 295 276
-------- --------
Returns of investments and servicing of finance
Interest and other income received 205 193
-------- --------
Corporation tax paid (116) (68)
-------- --------
Capital expenditure
Payments to acquire tangible fixed assets (27) (14)
Equity dividends paid (72) (48)
-------- --------
Net cash inflow 285 339
-------- -------
Reconciliation of net cash flow to movement in net funds
2006 2005
�000 �000
Increase in cash and short term deposits 285 339
Net funds at 1 January 3,900 3,561
-------- --------
Net funds at 31 December 4,185 3,900
-------- --------
(a) Reconciliation of operating profit to net cash outflow from operating activities
2006 2005
�000 �000
Operating profit 289 232
Depreciation 18 32
Amortisation of goodwill 2 2
(Increase)/decrease in debtors (293) 124
Increase/ (decrease) in creditors 279 (114)
-------- --------
Net cash inflow from operating activities 295 276
-------- --------
(b) Analysis of changes in net funds
At 1 At 31 December
January
2006 Cashflow 2006
�000 �000 �000
Cash at bank and in hand 112 (3) 109
Short-term deposits 3,788 288 4,076
-------- ------- --------
3,900 285 4,185
-------- ------- --------
Notes
1. Nature of financial information
These accounts do not constitute accounts under section 240 of the Companies Act 1985. The
results for the year ended 31 December 2005 are extracts from the Group accounts which have
been delivered to the Registrar of Companies. They carry an unqualified auditor's report and
did not contain a statement under Section 237 (2) or (3) of the Company's Act 1985. The
statutory accounts for the year ended 31 December 2006 will be finalised on the basis of the
financial information in this preliminary announcement and will be filed with the Registrar of
Companies after the Annual General Meeting.
2. Basis of preparation
The accounts are prepared under the historical cost convention and in accordance with
applicable accounting standards. The accounting policies set out in the group accounts for the
year ended 31 December 2005 have been applied for the purposes of this statement.
3. Basis of consolidation
The group financial statements consolidate the financial statements of Stockcube PLC and all
of its subsidiary undertakings for the year to 31 December 2006.
Entities other than subsidiary undertakings, in which the group has a participating interest
and over whose operating and financial policies the group exercises a significant influence,
are treated as associates. In the group financial statements, associates are accounted for
using the equity method
No profit and loss account is presented for Stockcube PLC as permitted by Section 230 of the
Companies Act 1985
4. Earnings per share
The calculation of basic earnings per ordinary share is based on earnings as follows:
2006 2005
000 000
Profit for the year after taxation �344 �164
Weighted average number of ordinary shares outstanding 9,611 9,611
Basic earnings per share 3.6p 1.7p
Diluted earnings per share 3.0p 1.5p
The diluted earnings per share is based on 10,952,135 (2005: 10,970,259) ordinary shares which
takes into account theoretical ordinary shares that would have been issued based on average market
value if all outstanding options were exercised
5. Dividend record and payment date
The Directors have proposed the payment of a dividend. The dividend of 1.0o per ordinary share
will be paid on 1 June 2007. Dividends will be paid to those shareholders on the Register at
the close of business on 4 May 2007.
6. Annual report and accounts
This will be posted to shareholders on 27 April 2007 and copies will be available free of charge
during normal business hours on any weekday (except Saturday, Sunday and public holidays) at the
offices of the Company at Unit 1.23, Plaza 535, King's Road, London SW10 0SZ.
Stockcube PLC
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