RNS Number:5221F
Total Systems PLC
03 July 2006
FOR RELEASE 7:00 AM 3 JULY 2006
TOTAL SYSTEMS plc
Preliminary results for the year ended 31 March 2006
Another profitable year
Total Systems plc ("Total" or "the Company"), suppliers of cost effective
flexible software systems for the financial services industry, primarily in the
insurance and warranty sectors, announces its preliminary results for the year
ended 31 March 2006.
Commenting on the Company's results Terence Bourne, Chairman, said:
"I am pleased to report that the year ended 31 March 2006 has been positive in
the development of the Company. We have increased our investment in sales and
marketing, introduced account management to support existing clients and
developed relationships with third party product vendors in order to provide a
wider range of products and services to our target market."
Financial Highlights
* Turnover # 3.49m (2005: # 3.45m)
* Profit before tax # 285k (2005: # 496k)
* Basic EPS 2.15p (2005: 3.56p)
* Final dividend 0.90p (2005: 1.80p)
* Gearing Nil (2005: Nil)
* Net assets per share 40.06p (2005: 40.10p)
* Cash per share 30.66p (2005: 33.89p)
Product Summary
Ultima, the complete insurance and warranty solution, continues to bring
significant business benefits to clients including:
* Low cost of ownership.
* Integrated solution.
* Flexible and designed for change with Business Configurator.
* Easy integration with external systems.
* Service Oriented Architecture.
Regarding the Company's current trading and outlook, Terence Bourne added:
"The feedback received from potential customers and the user group leads the
Board to believe that the Company has the correct strategy for the future.
Protracted decision making by potential clients is still a key factor in our
market and no new contracts have been signed at the time of writing. Your
Company is in a strong position to take advantage of new orders and, with the
complementary product strategy, the Board believes that the future can only be
positive in the medium term."
E-mail: ir@totalsystems.co.uk web site: www.totalsystems.co.uk
Enquiries:
Terence Bourne, Chairman Total Systems plc 020 7294 4888
Granville Harris, Finance Director Total Systems plc 020 7294 4888
Notes for Editors:
Based in the City of London Total provides cost effective flexible software
systems for the financial services sector, primarily in the insurance and
warranty sectors, as well as complementary IT consultancy, development,
integration and support services.
The Company has a full listing on the London Stock Exchange.
Significant investment has been made by the Company in developing Ultima
(General insurance system for personal and commercial lines).
Examples of Total's clients for Ultima include Axa Insurance Services (Denplan),
Bluesure, DSG International, HSBC Insurance and Zurich Insurance Company
(Navigators & General).
Chairman's Statement
I am pleased to report that the year ended 31 March 2006 has been positive in
the development of the Company. We have increased our investment in sales and
marketing, introduced account management to support existing clients and
developed relationships with third party product vendors in order to provide a
wider range of products and services to our target market.
RESULTS
Revenue for the financial year 2006 was slightly higher while profit was
maintained at a respectable level. For the year under review revenue was #
3,488,309 (2005: #3,451,633) and profit before tax was #284,632 (2005: #496,098)
resulting in earnings per share of 2.15p (2005: 3.56p).
FINANCIAL
Zero gearing and net assets of 40.06p per share (2005: 40.10p), of which 30.66p
per share (2005: 33.89p) is represented by cash, demonstrates our financial
strength. The paid dividend is covered 0.93 times (2005: 1.25 times) and return
on capital employed is 6.75% (2005: 11.76%).
DIVIDEND
Payment of a final dividend of 0.90p per share is proposed. This makes the total
dividend for the year 1.425p per share (2005: 2.85p).
The dividend will be paid on 5th September 2006 to all shareholders on the
register on 14th July 2006.
MARKET PLACE
The general insurance market place remains relatively soft and hence the market
for new systems continues to be extremely competitive with very few complete
systems being purchased. However, a requirement remains to upgrade existing
systems, or introduce new ones, to improve efficiency and provide web based
interfaces to customers and trading partners.
We have responded to this opportunity by developing Ultima on a Service Oriented
Architecture (SOA) basis in order to deliver component solutions more quickly
and cost effectively.
STRATEGY
Your Company is committed to the financial services market. Our strategy is to
provide innovative software products together with support and consulting
services to enable insurance companies to rapidly launch new products, take
advantage of new channels to market as well as to increase the efficiency of
policy and claims administration processes.
The move to SOA opens up new areas of opportunity for delivering applications to
the wider financial services market place and the addition of new complementary
products increases the value the Company brings to both new and existing
customers.
Colin Fox was recruited to the Board as Sales Director to drive the sales
strategy forward. He has brought on board an experienced sales and marketing
team to develop and exploit the opportunities in the market place. As a result
the number of demonstrations and presentations of Ultima has increased
significantly, taking advantage of our newly refurbished facilities and showing
our products to their best advantage. Several potential complementary products
have been identified and the Company is currently negotiating two distribution
agreements in the areas of document management and product pricing. A new
offering is being formulated, based on a leading edge product, to allow brokers
to interrogate insurers systems using an English Language interface.
We continue to invest heavily on Research and Development spending # 634,796
(2005: #706,582) to maintain our position at the forefront of technology. The
Ultima product has been continually enhanced over the period and there are
detailed plans for further developments over the coming years.
PRODUCTS
Development and promotion of Ultima, our product for the insurance and warranty
sectors, continues. In addition to moving to a SOA product offering, new
components, including an advanced management information tool, have been added
and initial sales have been made to existing customers. Total Fund Manager is
still available for interested parties but is not being actively marketed.
ENVIRONMENTAL AND SOCIAL
The Company operates from offices in central London. Every care is taken to
ensure that we operate in an environmentally friendly way within the limitations
imposed by our location and the nature of our operations. A prime example is
that the Company recycles 95% of its paper usage and has done so for the last
ten years.
In regard to its employees and the local community employees are allowed time to
take part in their own social responsibilities as necessary.
OPERATIONS
Operations have been satisfactory over the period. The implementation of Ultima
at HSBC Insurance has been completed and our consultants continue to support the
systems provided. Our other clients have continued to enhance and develop their
systems during the year and they have been provided with full support to all
aspects of their systems. This focus has enabled an increase full year revenue.
Compared to the previous year the reduction in profit is due to the increased
investment in the sales and marketing team in order to obtain more orders for
our products and provide a firm base for the future.
PERSONNEL
I would like to thank the staff for their enormous contribution to our success.
Their dedication and commitment to customer service is second to none and I look
to the future with confidence.
Investment has continued in training for our staff, managers and Directors over
the period and we have also upgraded the benefits packages available to
employees during the year. We are continuing to develop all aspects of our
staff's abilities in order to keep a motivated and efficient team available to
tackle any eventuality that may arise.
CURRENT TRADING AND OUTLOOK
We plan to build on our investment in sales and marketing to exploit the
functional and technological advantages of our Ultima product. In the longer
term this will lead to wider opportunities across the financial services
industry, both in the UK and internationally.
Current trading is difficult for a number of reasons. Our remaining fund
management client, has advised us that they are in the course of consolidating
back to their country of origin and will migrate to a different system. The loss
of this business will impact the second half of the current financial year. In
addition, enhanced account management successfully brought forward chargeable
work into the last quarter of 2006. Further, one of our Ultima clients,
Bluesure, has indicated they will not continue to upgrade their system. These
events have meant that the start of the first half of 2007 has been slow. No
significant upturn in business is anticipated until the second half of the
current financial year at the earliest.
The feedback received from potential customers and the user group leads the
Board to believe that the Company has the correct strategy for the future.
Protracted decision making by potential clients is still a key factor in our
market and no new contracts have been signed at the time of writing. Your
Company is in a strong position to take advantage of new orders and, with the
complementary product strategy, the Board believes that the future can only be
positive in the medium term.
Terence Bourne
Chairman
30 June 2006
TOTAL SYSTEMS plc
Consolidated Income Statement
For the year ended 31 March 2006
Note 2006 2005
# #
Continuing operations
Revenue 2 3,488,309 3,451,633
Operating profit 143,558 337,695
Interest receivable and similar income 141,080 158,403
Interest payable and similar charges (6) -
Profit before taxation 284,632 496,098
Taxation (58,110) (121,472)
Profit after taxation for the year 226,522 374,626
Basic earnings per ordinary share 4 2.15p 3.56p
Diluted earnings per ordinary share 2.13p 3.56p
Consolidated Balance Sheet
At 31 March 2006
2006 2005
# # # #
ASSETS
Non-current assets
Property, plant & equipment 822,074 660,840
Current assets
Trade and other receivables 853,752 724,499
Cash and cash equivalents 3,224,945 3,565,044
Total current assets 4,078,697 4,289,543
TOTAL ASSETS 4,900,771 4,950,383
LIABILITIES
Current liabilities
Trade and other payables (628,748) (610,446)
Current tax liabilities (52,567) (121,473)
Total current liabilities (681,315) (731,919)
Non-current liabilities
Deferred tax liabilities (5,544) -
TOTAL LIABILITIES (686,859) (731,919)
NET ASSETS 4,213,912 4,218,464
Shareholders equity
Issued share capital 525,978 525,978
Share premium 83,010 83,004
Retained earnings 3,591,424 3,609,482
Stock option reserve 13,500 -
TOTAL EQUITY 4,213,912 4,218,464
Consolidated Cash Flow Statement
For the year ended 31 March 2006
Note 2006 2005
# # # #
Operating activities
Cash received from customers 3,987,797 4,181,560
Cash payments to suppliers (667,571) (654,465)
Cash payments to employees (1,671,894) (1,556,684)
Cash paid for PAYE and National Insurance (916,832) (1,025,857)
Cash paid for VAT (561,826) (604,865)
Other business payments (35,694) (33,017)
Cash inflow from operating activities 7 133,980 306,672
Income taxes paid (121,472) (195,559)
Net cash inflow from operating activities 12,508 111,113
Cash flows from investing activities
Interest received 141,080 158,403
Purchase of plant and equipment (249,107) (79,468)
Net cash (outflow)/inflow from investing
activities (108,027) 78,935
Cash flows from financing activities
Share option receipts 6 936
Interest paid (6) -
Equity dividends paid (244,580) (299,807)
Net cash outflow from financing
activities (244,580) (298,871)
Net change in cash and cash equivalents (340,099) (108,823)
Opening cash and cash equivalents 3,565,044 3,673,867
Closing cash and cash equivalents 3,224,945 3,565,044
General Notes:
1. The financial information contained in this statement does not constitute
the statutory accounts for the years ended 31 March 2006 and 2005, as
defined in section 240 of the Companies Act 1985, but is derived from those
accounts. The statutory accounts for the year ended 31 March 2005 have been
delivered to the Registrar of Companies and those for 31 March 2006 will be
delivered following the Company's Annual General Meeting. The auditors have
reported on those accounts; their reports were unqualified and did not
contain statements under Section 237(2) or Section 237(3) of the Companies
Act 1985.
2. The Group's revenue is derived from the writing and supply of computer
software and supply of third party software both with related hardware in
the United Kingdom. All activities derive from continuing operations.
3. The announcement has been prepared on the basis of the accounting policies
as per the prior year and in accordance with International Financial
Reporting Standards (IFRS). The only difference for the Group between
reporting under IFRS and UK GAAP is that the Group no longer recognises
dividends payable to shareholders prior to their approval by the Annual
General Meeting in the case of the final dividend and by the Board in the
case of the interim dividend. The net impact to net assets on the adoption
of IFRS is set out in note 8. The adoption of IFRS had no impact of the net
income of the Group.
4. The calculation of basic earnings per share is based on a profit after
taxation of # 226,522 (2005: # 374,626) and a weighted average of
10,519,553 shares (2005: 10,518,579) in issue during the period.
5. It is intended to post the Annual Statement and Report to shareholders on
5 July 2006. Copies will then be available from the Registered Office of
the group at 394 City Road, London, EC1V 2QA.
6. The Annual General Meeting will be held at 394 City Road, London,
EC1V 2QA on 14 August 2006.
7. Reconciliation of operating profit to cash inflow from operating activities
2006 2005
# #
Operating profit 143,558 337,695
Depreciation charges 87,873 74,826
(Increase)/decrease in debtors (129,253) 113,560
Increase/(decrease) in creditors 18,302 (219,409)
Change in share based payments 13,500 -
Cash inflow from operating activities 133,980 306,672
8. Adoption of International Financial Reporting Standards
2006 2005
# #
Net assets under UK GAAP 4,213,912 4,029,112
Dividend recognition - 189,352
Net assets under IFRS 4,213,912 4,218,464
9. Changes in consolidated equity shareholders' funds
Issued Share Retained Stock Total
share premium earnings option equity
capital reserve
# # # # #
As at 1 April 2004 525,744 82,302 3,345,311 - 3,953,357
Profit after tax for the year - - 374,626 - 374,626
New share capital subscribed 234 702 - - 936
Interim dividend paid - - (110,455) - (110,455)
Final dividend proposed - - (189,352) - (189,352)
As at 31 March 2005 525,978 83,004 3,420,130 - 4,029,112
IFRS transition adjustment for dividends - - 189,352 - 189,352
As at 1 April 2005 525,978 83,004 3,609,482 - 4,218,464
Profit after tax for the year - - 226,522 - 226,522
Final dividend paid - - (189,352) - (189,352)
Interim dividend paid - - (55,228) - (55,228)
Funds received on grant of options - 6 - - 6
Share based payments - - - 13,500 13,500
As at 31 March 2006 525,978 83,010 3,591,424 13,500 4,213,912
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
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