RNS Number:1207F
Total Systems PLC
16 December 2002
FOR RELEASE 7:00AM 16 DECEMBER 2002
TOTAL SYSTEMS plc
Unaudited Interim results for the half year ended 30 September 2002
Interim Dividend increased by 11%
Total Systems plc ("Total" or "the Company"), suppliers of established software
products and services to the insurance, warranty and pension fund sectors of the
financial services market and related industries, announces its preliminary
results in respect of the half year ended 30 September 2002.
Commenting on the Company's results, Terry Bourne, the Chairman, said:
"Performance for the half year has been broadly in line with the Board's
expectation. Ultima, our flexible, open software product for the insurance and
related industries, continues to attract strong interest even in the current
economic climate. However, it is proving extremely difficult to persuade
prospects to commit investment. Your Company remained profitable and cash
generative for the period under review."
Highlights
* Profit before tax #280,033 (2001: #772,911).
* Earnings per share 1.85p (2001: 5.15p)
* Interim dividend increased by 11% to 1.00p per share (2001: 0.90p)
* Zero gearing, increased net assets of 34.9p per share (2001:31.3p), of
which 29.4p (2001:25.6p) is represented by cash
* Continuing investment in Ultima keeping it at the forefront of fully
integrated, full cycle systems that are much more efficient and cost
effective than competitors' modular systems
* Use of Ultima as the software behind new generation fully integrated
and fully functional systems opens up new business opportunities in
sectors other than purely insurance, such as membership systems with
associated member services and premium finance administration.
Regarding the Company's current trading and outlook, Terry Bourne added:
"At the time of the Chairman's Statement for the year ended 31 March 2002 it was
anticipated that the second half of this financial year would be stronger than
the first half. Due to continuing delays in the signing of significant new
business this is now unlikely. Such delays make it extremely difficult to
forecast performance for the full year........."
"With so many global uncertainties and the continual downgrading of UK economic
growth forecasts, considerable doubt must surround any expectation of an
improvement in trading conditions in 2003. We will strive to achieve a larger
share of a shrinking market as well as looking for opportunities to enter new
markets......................."
"The Board takes comfort from the Company's strong cash balances and zero
gearing, which should enable it to take advantage of any improvement in trading
conditions when this occurs".
E-mail: info@totalsystems.co.uk web site: www.totalsystems.co.uk
Enquiries:
Terry Bourne, Chairman Total Systems plc 020 7294 4888
Granville Harris, Finance Director Total Systems plc 020 7294 4888
Peter Binns, Jacqui Graves Binns & Co. PR Ltd 020 7786 9600
Notes for City Editors:
Based in the City of London, Total Systems provides cost effective open software
systems for the financial services sector, primarily in the insurance, warranty
and pension fund management sectors, as well as relevant IT Consultancy and
General Support Services. The Company gained a Full Listing on the London Stock
Exchange in 1995.
Significant investment has been made by the Company in developing further both
Ultima (the General Lines Insurance System) and Optima2000+ (the Investment
Management & Accounting System) such that each is regarded as an established
software product. Examples of Total Systems' clients in the insurance/warranty
market are: Axa Insurance Services (Denplan), Bluesure, Dixons, Fortis, UIA and
Zurich Insurance Company (Navigators & General); whilst in the financial
services market they include: Kvaerner Investment Management, Shell Pension Fund
and West Yorkshire Pension Fund.
INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2002
Chairman's Statement
RESULTS
Performance for the half year has been broadly in line with the Board's
expectation. Ultima, our flexible, open software product for the insurance and
related industries, continues to attract strong interest, even in the current
economic climate. However, it is proving extremely difficult to persuade
prospects to commit investment. Your Company remained profitable and cash
generative for the period under review. Turnover for the half year was
#2,026,589 (2001: #2,838,066). Profit before tax is #280,033, (2001: #772,911)
resulting in earnings per share of 1.85p (2001: 5.15p).
FINANCIAL
Zero gearing and net assets of 34.9p per share (2001: 31.3p), of which 29.4p per
share (2001: 25.6p) is represented by cash, demonstrate our financial strength.
Interim dividend is covered 1.8 times (2001: 5.7 times).
DIVIDEND
Your Board proposes the payment of an interim dividend of 1p per share, an
increase of 11% over last year's interim dividend of 0.9p per share.
The dividend will be paid on 29 January 2003 to all shareholders on the register
on 31 December 2002.
STRATEGIC DEVELOPMENTS
We aim for Ultima to be the software system of first choice in the provision of
new generation fully integrated and fully functional systems for the insurance,
warranty and membership services industries, as well as for other appropriate
sectors. It is our intention to keep this product at the forefront of these
systems that are so much more efficient and cost effective than company's
internally developed, and competitor's, modular systems.
Application areas for Ultima include Motor, Household, Medical, Warranty,
Commercial, Small Marine, Travel, Accidental Death Benefit, Home Assist, Legal
Expenses, Engineering and Term Insurance, Premium Financing and Membership
Database and Services.
Our rapid product development tool, Product Developer Plus, enables users to
develop new products quickly and cost effectively irrespective of the currency
and language.
Technology for its own sake is of no value but when real business benefits are
delivered more innovative and profitable companies are created. Laying patchwork
solutions or modern front ends onto old legacy systems does nothing to improve a
company's efficiency. Only the implementation of modern systems that are
significantly more flexible and cheaper to run will deliver real business
benefits. There is a growing body of evidence that this is now being recognised
by the senior management of insurance companies. Ultima is such a system
providing fully integrated, full cycle processing, while supporting all channels
of distribution for insurance and warranty products and membership systems.
PRODUCTS
Ultima, available on all leading versions of UNIX, is written in
the most effective Relational Database and 4GL Technology, and incorporates WEB
and EDI capability. This product has a low cost of ownership and negligible
database administration costs due to the incorporation of "near-lights-out"
management tools. External system interfaces enable Ultima to co-habit with a
wide range of other platforms and applications. Ultima provides the ideal
platform to enable companies to meet the prerequisites for survival. Robust
reliable technology and cost effectiveness are two compelling criteria for
choosing database technology. Combine this with a much lower cost of ownership
than any competitor for the underlying embedded database software, then the way
forward is clear.
Optima2000+ is our product for Investment Management, Accounting
and Administration for Pension Funds. It is multi currency and has extensive
performance measurement, compliance and reporting facilities, external links for
information about securities, security prices and exchange rates. Information on
the structure of the standard index and benchmark portfolios is also provided.
The rich functionality of this product makes it one of the most user friendly,
comprehensive and completely integrated products of its type available in the
market today.
MARKET PLACE
Companies have decreased their spending on information technology across the
board and are now more pragmatic in how they spend their budgets. In general the
IT sector faces a tough road ahead but there will be opportunities to supply
software solutions to those companies that have under-invested in their systems
for a considerable period of time. These companies will be looking for clearly
definable value and systems that do not place undue strain on their financial,
human and infrastructure resources.
Product investment has been, and will continue to be a priority, to meet the
requirements of both existing and new clients, to maintain market
advantage and to increase market share. Total Systems "fast track" development
process enables us to rapidly translate original ideas into deliverable
solutions and the modern methodologies we adopt allow us to implement our fully
integrated systems quickly and efficiently.
STAFF
One of our greatest assets is our staff, their ideas are the driving
force behind the Company. We aim to employ people of high quality, to encourage
and reward creativity and initiative, to recognise individual and team
contributions and to give all employees the chance of developing their
potential. Our training programmes are being continually developed and expanded
as we strive to maximise our performance. A career development strategy has been
put in place to ensure that we encourage the talents of our highly skilled
personnel. I would like to thank all our staff for their loyalty, dedication,
enthusiasm and commitment which has helped underpin very positive prospects for
the future of your Company.
CURRENT TRADING AND OUTLOOK
At the time of the Chairman's Statement for the year ended 31 March 2002 it was
anticipated that the second half of this financial year would be stronger than
the first half. Due to continuing delays in the signing of significant new
business this is now unlikely. Such delays make it extremely difficult to
forecast performance for the full year.
Your Company has had four client sites "go live" in an efficient manner
in the last five months. Interest in our Ultima product continues to expand,
both in relation to internet trading and potential international roll-out.
The difficult market environment is still not showing any signs of
easing with many uncertainties continuing to destabilise the markets. The
economic and political climate remains volatile.
With so many global uncertainties and the continual downgrading of UK
economic growth forecasts, considerable doubt must surround any expectation of
an improvement in trading conditions in 2003. We will strive to achieve a larger
share of a shrinking market as well as seeking opportunities to enter new
markets. The Board believes that your Company is in a particularly strong
position to achieve this. However, continuing delays in the signing of
significant new business make it extremely difficult to forecast future
performance.
The Board takes comfort from the Company's strong cash balances and zero
gearing, which should enable it to take advantage of any improvement in trading
conditions when this occurs.
Terry Bourne
Chairman
16 December 2002
Consolidated Profit and Loss Account
for the half year ended 30 September 2002
Note Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 September 30 September 31 March
2002 2001 2002
# # #
TURNOVER 1 2,026,589 2,838,066 5,384,299
============= ============= =============
OPERATING PROFIT 223,855 714,694 1,302,785
Interest receivable 56,178 58,217 112,821
------------- ------------- -------------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 280,033 772,911 1,415,606
TAX ON PROFIT ON ORDINARY ACTIVITIES (86,128) (234,728) (422,068)
------------- ------------- -------------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION
ATTRIBUTABLE TO SHAREHOLDERS 193,905 538,183 993,538
DIVIDENDS (105,035) (94,091) (256,895)
------------- ------------- -------------
RETAINED PROFIT FOR THE PERIOD 88,870 444,092 736,643
============= ============= =============
Earnings per ordinary share 3 1.85p 5.15p 9.50p
Diluted Earnings per ordinary share 1.84p 5.11p 9.44p
Dividend per share 1.00p 0.90p 2.45p
Consolidated Balance Sheet
at 30 September 2002
Unaudited Unaudited Audited
as at as at as at
30 September 30 September 31 March
2002 2001 2002
# # #
Fixed assets
Tangible assets 687,207 706,327 731,109
Current assets
Debtors 961,184 1,208,276 1,223,890
Cash at bank and in hand 3,084,871 2,672,540 3,018,627
4,046,055 3,880,816 4,242,517
Creditors: amounts falling due
within one year (1,064,498) (1,315,037) (1,390,050)
Net current assets 2,981,557 2,565,779 2,852,467
Total assets less current 3,668,764 3,272,106 3,583,576
liabilities
Provisions for liabilities and
charges
Deferred taxation - - (3,682)
-------------- -------------- --------------
Net assets 3,668,764 3,272,106 3,579,894
============= ============== ==============
Capital and reserves
Called up share capital 525,173 522,728 525,173
Share premium account 80,189 67,397 80,189
Profit and loss account 3,063,402 2,681,981 2,974,532
-------------- -------------- --------------
Equity shareholders' funds 3,668,764 3,272,106 3,579,894
============== ============== ==============
Consolidated Cash Flow Statement
for the half year ended 30 September 2002
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 September 30 September 31 March
2002 2001 2002
Note # # #
Operating activities
Cash received from customers 2,654,853 3,103,400 6,099,131
Cash payments to suppliers (288,267) (438,679) (780,402)
Cash payments to employees (1,086,147) (969,579) (2,019,891)
Cash paid for PAYE and National Insurance (738,474) (585,002) (1,122,714)
Cash paid for VAT (324,813) (482,593) (865,056)
Other business payments (44,308) (66,194) (118,439)
Net cash inflow from operating activities (a) 172,844 561,353 1,192,629
Return on investments and servicing of finance
Interest received 56,178 58,217 112,821
Net cash inflow from returns on investments and
servicing of finance 56,178 58,217 112,821
Taxation
Corporation tax payment - - (199,386)
Capital expenditure and financial investment
Purchase of tangible fixed assets - (4,091) (78,811)
Sale of tangible fixed assets 26 3,481 16,648
--------- --------- ---------
Net cash inflow/(outflow) from capital
expenditure and financial investment 26 (610) (62,163)
Equity dividends paid (162,804) (146,336) (240,427)
Cash inflow before use of liquid resources and
financing 66,244 472,624 803,474
Financing
Proceeds from exercise of share options (d) - 1,170 16,407
------------ ------------ ------------
Increase in cash in the period (c) 66,244 473,794 819,881
============ ============ ============
Notes to Cash Flow Statement
(a) Reconciliation of operating profit to net cash inflow from
operating activities
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 September 30 September 31 March
2002 2001 2002
# # #
Operating profit 223,855 714,694 1,302,785
Depreciation charges 43,557 46,096 92,534
(Profit)/Loss on sale of tangible assets 319 (2,491) (12,157)
(Increase)/Decrease in debtors 262,706 (303,013) (318,627)
Increase/(Decrease) in creditors (357,593) 106,067 128,094
-------------- ----------- --------------
172,844 561,353 1,192,629
============== =========== ==============
(b) Reconciliation of net cash flow to movement in net funds
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 September 30 September 31 March
2002 2001 2002
# # #
Increase in cash in the period and change in net 66,244 473,794 819,881
funds
Net funds at 1 April 3,018,627 2,198,746 2,198,746
-------------- -------------- --------------
Balance at 30 September 3,084,871 2,672,540 3,018,627
============== ============== ==============
(c) Analysis of changes in net funds
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
ended ended ended
30 September 31 March 30 September
2002 Change in 6 2002 Change in 6 2001
Months Months
# # # # #
Cash at bank and in hand 3,084,871 66,244 3,018,627 346,087 2,672,540
(d) Analysis of changes in financing during the year
Share capital Share capital Share capital
(including (including (including
premium) premium) premium)
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
ended ended ended
30 September 30 September 31 March
2002 2001 2002
# # #
Balance at 1 April 605,362 588,955 588,955
Cash inflows from employees exercising share options - 1,170 16,407
------------ ------------ ----------
Balance at 30 September 605,362 590,125 605,362
============ ============ ==========
General Notes:
1. The Group's turnover 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.
2. Financial information contained in this statement does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
abridged information for the 12 months ended 31 March 2002 has been
extracted from the Company's statutory accounts for that period, which have
been filed with the Registrar of Companies. The auditors' report on the
Company's accounts for that period was unqualified and did not contain a
statement under either of sections 237(2) or 237(3) of the Companies Act 1985.
3. Calculation of earnings per share is based on a profit after taxation of
#193,905 (2001: #538,183) and a weighted average of 10,503,455 shares
(2001: 10,452,784) in issue during the period.
4. It is intended to post this Statement and Report to shareholders on
20 December 2002. Copies are otherwise available from the Registered Office
of the Group at 394 City Road, London EC1V 2QA.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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