RNS Number:9087M
Total Systems PLC
30 June 2003
FOR RELEASE 7:00AM 30 JUNE 2003
TOTAL SYSTEMS plc
Preliminary results for the year ended 31 March 2003
Results ahead of market expectations; dividend up 10%
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 for the year ended 31 March 2003.
Commenting on the Company's results Terry Bourne, the Chairman, said:
"Performance for the financial year 2003 has exceeded expectations due to new
business from our existing client base being greater than anticipated. Despite
the continuing uncertain economic and political environment, your Company has
achieved both profitability and positive cash flow."
Highlights
* Turnover #3.93m (2002: #5.38m).
* Profit before tax #596,643 (2002: #1,415,606).
* Basic earnings per share 4.13p (2002: 9.50p).
* Final dividend of 1.70p per share, making a total dividend of 2.70p
per share (2002: 2.45p).
* Nil gearing (2002: Nil gearing).
* Increased net assets of 35.51p per share, 33.12p represented by cash.
* ULTIMA is now believed to be the most advanced insurance/warranty
system available today with one of the fastest "project start" to "live
implementation" cycles.
* Existing client to shortly deploy all their products over the internet
using the latest soft WEB enabled version.
* A client is running ULTIMA to support tens of millions of both
agreements and customers.
* Keen interest in Optima, Total's software system for the Pension Funds
industry, continues on account of its rich functionality and user friendly
nature.
Regarding the Company's current trading and outlook, Terry Bourne added:
"The economic and political climate is still unstable and until this
improves business growth is likely to be subdued. Delays are still being
experienced in gaining new contracts, but the Board is confident of success in
this area as interest in ULTIMA continues to grow, both in relation to internet
trading and generally.
Trading progress in the current year has been satisfactory although
in present market conditions it is unlikely that there will be any improvement
on the performance for the year being reported on. However, your Company is in a
sound financial state enabling it to take advantage of any improvement in the
market place 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
Jacqui Graves/Peter Binns Binns & Co. PR Ltd 020 7786 9600
Notes for City Editors:
Based in the City of London, Total 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 Optima (the Investment
Management & Accounting System) such that each is regarded as an established
software product. Examples of Total's 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.
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2003
Chairman's Statement
RESULTS
Performance for the financial year 2003 has exceeded
expectations due to new business from our existing client base being greater
than anticipated. Despite the continuing uncertain economic and political
environment your Company has achieved both profitability and positive cash flow.
Turnover for the year was #3,927,749 (2002: #5,384,299), profit before tax
#596,643 (2002: #1,415,606), resulting in earnings per share of 4.13p (2002:
9.50p).
FINANCIAL
Zero gearing and net assets of 35.51p per share (2002:
34.08p), of which 33.12p per share (2002: 28.74p) is represented by cash,
demonstrate our financial strength. The proposed dividend is covered 1.53 times
(2002: 3.87 times) and return on capital employed is 16.00% (2002: 39.54%).
DIVIDEND
Your Board proposes the payment of an increased final dividend of 1.70p per
share. This makes the total dividend for the year 2.70p per share representing a
10% improvement compared to 2.45p per share for the previous year.
The dividend will be paid on 8 August 2003 to all shareholders on the register
on 11 July 2003.
STRATEGIC DEVELOPMENTS
The Company's main focus continues to be on the UK insurance and warranty
sectors of the financial services and related industries. ULTIMA has been
developed further and we aim for this product to be the software system of first
choice in the provision of new generation fully integrated and fully functional
systems for the insurance industry and other sectors. It is our intention to
keep this product at the forefront of "wall to wall" insurance/warranty systems
that are so much more efficient and cost effective than competitors' modular
systems.
PRODUCTS
Our products deliver a fast payback on investment and low cost of ownership that
comes from a consistency of IT platform and standards throughout an
organisation. We provide products that are comprehensive, reliable, respond to
clients' needs, combined with the benefit of reduced software maintenance and
integration costs. This is achieved through:
*Boosting developer productivity, reducing time to deployment, and accelerating
the realisation of business benefits.
*Enabling highly distributed deployment of applications.
*Simplifying the integration of applications across and amongst enterprises.
TOTAL SYSTEMS plc
Chairman's Statement (continued)
ULTIMA is now believed to be the most advanced insurance/warranty
system available today with one of the fastest "project start" to "live
implementation" cycles. An existing client will shortly be deploying all their
products over the internet using the latest soft WEB enabled version. Another
client is running ULTIMA to support tens of millions of both agreements and
customers.
Available on the latest Microsoft technology and all leading versions
of UNIX, ULTIMA 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.
It 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. With a much lower cost of ownership
than any competitor for the underlying embedded database software, the way
forward is clear.
Optima 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.
All our products can be integrated or interfaced with any other
software system running on any hardware platform and the new version of our
rapid product development tool, PD+ Configurator, enables users to upgrade the
functionality of their business systems quickly and cost effectively
irrespective of the currency and language.
MARKET PLACE
While the Board had previously anticipated that the 2003 calendar
year would see some improvement, the low levels of spending on information
technology in the financial services sector is now likely to continue. Strong
long term client relationships have enabled us to secure a larger share of
available budgets but investment intentions remain very weak and the global
economy does not bode well for foreign investment. Although we actively seek to
expand the client base, new client spending is likely to be deferred to 2004 at
the earliest.
With the rationalisation and mergers taking place in the insurance
and pension fund sectors, the size of our markets is likely to decline. However,
this will result in a combination of incompatible systems, which should provide
opportunities for ULTIMA, but at a somewhat slower rate than we would like.
The survivors in our markets will be those businesses who realise
that failure to upgrade their systems and equipment will leave them vulnerable
to competition from more aggressive rivals. As yesterday's future becomes
today's reality, product investment will continue to be a priority in order to
provide and maintain business and market advantage with intelligent anticipation
of market trends. Total Systems' "fast track" development process enables us to
rapidly translate original ideas into cost effective deliverable solutions and
the modern methodologies we adopt allow us to implement our fully integrated
systems ever more quickly
TOTAL SYSTEMS plc
Chairman's Statement (continued)
and efficiently. These are the key differentiators that will lead
discerning clients to choose Total Systems.
STAFF
I would like to thank all our staff for their commitment and hard
work over the past year. Their quality and commitment is giving your Company an
envious reputation for the service provided to our clients. Our personnel have
worked diligently and efficiently to achieve this reputation and their efforts
in this regard are highly commendable. As we strive for continuous improvement,
training programmes are being continually developed and expanded. The career
development strategy that has been put in place is also making a positive
contribution, ensuring that we maximise the talents of our highly skilled
people.
CURRENT TRADING AND OUTLOOK
The economic and political climate is still unstable and, until this
improves, business growth is likely to be subdued. Delays are still being
experienced in gaining new contracts, but the Board is confident of success in
this area as interest in ULTIMA continues to grow, both in relation to internet
trading and generally.
Trading progress in the current year has been satisfactory although
in present market conditions it is unlikely that there will be any improvement
on the performance for the year being reported on. However, your Company is in a
sound financial state enabling it to take advantage of any improvement in the
market place when this occurs.
Terry Bourne
Chairman
30 June 2003
Consolidated Profit and Loss Account for the year ended 31 March 2003
Note 2003 2002
# #
TURNOVER 2 3,927,749 5,384,299
======== ========
OPERATING PROFIT 488,810 1,302,785
INTEREST RECEIVABLE 107,833 112,821
------------- -------------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 596,643 1,415,606
TAX CHARGE ON
PROFIT ON ORDINARY
ACTIVITIES (162,601) (422,068)
------------- -------------
PROFIT ON ORDINARY
ACTIVITIES 434,042 993,538
DIVIDENDS PAID & PROPOSED (283,787) (256,895)
------------- -------------
AMOUNT TRANSFERRED
TO RESERVES 150,255 736,643
======== ========
Basic earnings per share 4 4.13p 9.50p
Diluted earnings per share 4.12p 9.44p
Dividend per share 5 2.70p 2.45p
Consolidated Balance Sheet
At 31 March 2003
2003 2002
# # # #
Fixed assets
Tangible assets 650,517 731,109
Current assets
Debtors 680,820 1,223,890
Cash at bank and in 3,478,257 3,018,627
hand ----------- -----------
4,159,077 4,242,517
Creditors: amounts
falling due within
one year (1,079,445) (1,390,050)
Net current assets 3,079,632 2,852,467
---------- ----------
Total assets less 3,730,149 3,583,576
current liabilities
Provisions for
liabilities and
charges
Deferred taxation - (3,682)
--------- -----------
Net assets 3,730,149 3,579,894
========= ===========
Capital and
reserves
Called up share 525,173 525,173
capital
Share premium 80,189 80,189
account
Profit and loss 3,124,787 2,974,532
account
--------- ---------
Equity shareholders' 3,730,149 3,579,894
funds
========= =========
Consolidated Cash Flow Statement for the year ended 31 March 2003
2003 2002
Note # # # #
Operating
activities
Cash received from 5,347,590 6,099,131
customers
Cash payments to (503,642) (780,402)
suppliers
Cash payments to (1,909,263) (2,019,891)
employees
Cash paid for PAYE
and National
Insurance (1,199,140) (1,122,714)
Cash paid for VAT (588,935) (865,056)
Other business (106,400) (118,439)
payments ----------- -----------
Net cash inflow from
operating
activities (a) 1,040,210 1,192,629
Return on investments
and servicing of
finance
Interest received 107,833 112,821
--------- ---------
Net cash inflow from
returns on
investments and
servicing of
finance 107,833 112,821
Taxation
Corporation tax (419,085) (199,386)
payment
Capital expenditure
and financial
investment
Purchase of tangible (1,515) (78,811)
fixed assets
Sale of tangible 26 16,648
fixed assets
--------- ---------
Net cash outflow from
capital expenditure
and financial
investment
(1,489) (62,163)
Equity dividends (267,839) (240,427)
paid ----------- -----------
Cash inflow before
use of liquid
resources and
financing 459,630 803,474
Financing
Proceeds from (d) - 16,407
exercise of share
options
-------- --------
Increase in cash in (c) 459,630 819,881
the period
======= ========
Notes to the Consolidated Cash Flow Statement
(a) Reconciliation of operating profit to net cash inflow from
operating activities
2003 2002
# #
Operating profit 488,810 1,302,785
Depreciation charges 81,762 92,534
Loss/(profit) on sale of tangible assets 319 (12,157)
Decrease/(increase) in debtors 543,070 (318,627)
(Decrease)/increase in creditors (73,751) 128,094
----------- -----------
1,040,210 1,192,629
=========== ===========
(b) Reconciliation of net cash flow to movement in net funds
2003 2002
# #
Increase in cash in the year and change in net 459,630 819,881
funds
Net funds at 1 April 3,018,627 2,198,746
----------- ----------
Net funds at 31 March 3,478,257 3,018,627
========== ==========
(c) Analysis of changes in net funds
2003 Change in year 2002 Change in year 2001
# # # # #
Cash at 3,478,257 459,630 3,018,627 819,881 2,198,746
bank and ----------- --------- ----------- --------- -----------
in hand
(d) Analysis of changes in financing during the year
Share capital Share capital
(including (including
premium) premium)
2003 2002
# #
Balance at 1 April 605,362 588,955
Cash inflows from employees exercising share - 16,407
options
---------- ----------
Balance at 31 March 605,362 605,362
========== ==========
General Notes:
1. The financial information contained in this statement does not constitute
the statutory accounts for the years ended 31 March 2003 and 2002, 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 2002 have been
delivered to the Registrar of Companies and those for 31 March 2003 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 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.
3. The announcement has been prepared on the basis of accounting policies as
per the prior year.
4. The calculation of basic earnings per share is based on a profit after
taxation of #434,042 (2002: #993,538) and a weighted average of 10,503,455
shares (2002: 10,464,209) in issue during the period.
5. An interim dividend of 1.0p per share was paid to shareholders on 29
January 2003. A final dividend of 1.70p per share is proposed making the
total dividend per share for the year 2.70p.
6. It is intended to post the Annual Statement and Report to shareholders on
3 July 2003. Copies will then be available from the Registered Office of the
Group at 394 City Road, London EC1V 2QA.
7. The Annual General Meeting will be held at 394 City Road, London EC1V 2QA
on Monday 28 July 2003 at 10.00 a.m.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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