RNS No 6941h
TOTAL SYSTEMS PLC
1 July 1999
Total Systems plc
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 1999
Dividend increased by 21%; nil gearing; new products and financing options
Total Systems plc ("Total"), the UK software group specialising in the writing
and supply of its own software and services to customers in the pension funds
management and insurance sectors, announces preliminary results for the year
ended 31 March 1999.
Commenting on the Results, Terry Bourne, Chairman and Chief Executive, said:
"Performance for the year has proved less satisfactory than that which was
anticipated with turnover of #3,247,157, a reduction of 21% against last year.
The year 2000 issue has had a significant impact on our results as most
companies have concentrated their efforts on ensuring compliance of their
existing systems, rather than investing in new system implementations. The
impact has been more severe than expected, particularly in the insurance
sector. The reduction in turnover is entirely due to reduced volumes."
Highlights
* Turnover of #3.25m (1998: #4.13m)
* Profit before tax of #629,873 (1998: #1.02m)
* Earnings per share of 4.34p (1998: 6.80p)
* Final dividend of 1.2p proposed making a full year's dividend of 2.00p per
share, a 21% increase over last year (1998: 1.65p)
* Increased shareholders' funds. Net assets per share of 29.1p, 23.9p is
represented by cash
* Nil gearing and increased cash balance of #2.49m (1998: #2.2m)
* Return on capital employed was 20.8% (1998: 36.6%)
* Continued investment in key products - Ultima (general insurance system
for personal and commercial lines) and Optima (a fund management and
accounting system for pension funds), so that each retain leading market
positions
* New financing options being made available to clients to provide greater
flexibility
* Focused marketing campaign initiated to raise Total's profile and increase
market penetration
Regarding Total's Current Trading and Outlook, Terry Bourne added:
"We have every confidence that major growth opportunities exist, particularly
once Year 2000 fears that are present in the market are behind us. Interest
in our products continues at an exceptionally high level, particularly in
relation to internet trading, but cautious buying trends are resulting in a
protracted decision making process. With the energy, ability and commitment
of our staff we will pursue the opportunities for growth and expansion with
enthusiasm."
e-mail: info@totalsystems.co.uk website:http://www.totalsystems.co.uk
Enquiries:
Terry Bourne, Chairman Total Systems plc 0171 294 4888
Granville Harris, Total Systems plc 0171 294 4888
Simon Ellis/Peter Binns Binns & Co PR Ltd. 0171 786 9600
Chairman's Statement
RESULTS
Performance for the year has proved less satisfactory than that which was
anticipated with turnover of #3,247,157, a reduction of 21% against last year.
Profit before tax of #629,873 has decreased by 38% despite benefiting from the
recovery of disputed debts to the value of #232,077. Earnings per share was
4.34p (1998: 6.80p). The year 2000 issue has had a significant impact on our
results as most companies have concentrated their efforts on ensuring
compliance of their existing systems, rather than investing in new system
implementations. The impact has been more severe than expected, particularly
in the insurance sector. The reduction in turnover is entirely due to reduced
volumes. In general it has not been appropriate to increase prices for more
than eighteen months.
DIVIDEND
Your Board is proposing the payment of an increased final dividend of 1.2p due
to the Company's strong financial position, making the total dividend for the
year 2.00p. This represents an increase of 21% over last year's dividend.
FINANCIAL
The strength of our financial position is demonstrated by zero gearing and net
assets of 29.1p per share, of which 23.9p per share is represented by cash.
Dividend is covered 2.17 times and return on capital employed is 20.8%.
STRATEGIC DEVELOPMENTS
Our main markets are in the insurance and pension fund sectors of the
financial services industry. We continue to invest around 10% of turnover in
the development of both Ultima, our general insurance system for personal and
commercial lines, and Optima, a fund management and accounting system for
pension funds, to maintain their position as leading edge application
packages.
Innovative pricing structures for our products are being introduced to offer
clients greater flexibility and to attract those companies for whom the
initial capital expenditure is a barrier. The effect of this should be to
provide a recurring income stream of licence and service revenue lasting a
number of years, which should result in consistent growth. We hope that new
clients will appreciate the flexibility that the differing financing options
give them.
The visibility of Total in its chosen markets is being markedly improved with
a focused marketing campaign designed to raise our profile and thereby
increase our market penetration.
CURRENT TRADING AND OUTLOOK
We have every confidence that major growth opportunities exist, particularly
once Year 2000 fears that are present in the market are behind us. Interest in
our products continues at an exceptionally high level, particularly in
relation to internet trading, but cautious buying trends are resulting in a
protracted decision making process. The short term business outlook reflects
such current investment deferrals.
Results of recently commissioned research strongly indicate that the key needs
of insurance companies are to improve efficiency and introduce cost savings.
Since Ultima has the proven ability to meet these needs, as well as providing
far greater functionality and flexibility, the Directors believe that your
company is ideally placed to take full advantage of the change which must take
place within the insurance sector of the financial services industry.
The future is full of potential. With the energy, ability and commitment of
our staff we will pursue the opportunities for growth and expansion with
enthusiasm.
Terry Bourne
Chairman
30 June 1999
Consolidated Profit and Loss Account for the year ended 31 March 1999
Notes 1999 1998
# #
TURNOVER 1 3,247,157 4,134,866
======== ========
OPERATING PROFIT 427,028 904,763
Interest Receivable 202,845 114,912
------------- -------------
PROFIT ON ORDINARY
ACTIVITIES BEFORE
TAXATION 629,873 1,019,675
TAX ON PROFIT ON ORDINARY
ACTIVITIES (177,667) (320,243)
------------- -------------
PROFIT ON ORDINARY
ACTIVITIES AFTER
TAXATION FOR THE
FINANCIAL YEAR 452,206 699,432
DIVIDENDS (208,253) (171,297)
------------- -------------
RETAINED PROFIT
FOR THE FINANCIAL YEAR 243,953 528,135
======== ========
Earnings per share 3 4.34p 6.80p
Dividend per share 4 2.00p 1.65p
Consolidated Balance Sheet
At 31 March 1999
1999 1998
# # # #
Fixed assets
Tangible assets 800,336 855,501
Current assets
Debtors 840,275 1,071,577
Cash at bank and in hand 2,490,651 2,217,753
--------- ----------
3,330,926 3,289,330
Creditors: amounts
falling due within
one year (1,096,985) (1,351,499)
---------- ----------
Net current assets 2,233,941 1,937,831
---------- ----------
Total assets less current
liabilities 3,034,277 2,793,332
Provision for liabilities
and charges
Deferred taxation 2,205 6,082
---------- ----------
3,032,072 2,787,250
---------- ----------
Capital and reserves
Called up share capital 520,710 520,516
Share premium account 59,705 59,030
Profit and loss account 2,451,657 2,207,704
---------- ----------
Equity shareholders' funds 3,032,072 2,787,250
---------- ----------
Consolidated Cash Flow Statement
For the year ended 31 March 1999
1999 1998
# # # #
Operating activities
Cash received from
customers 4,393,114 4,719,936
Cash payments to
suppliers (700,644) (532,752)
Cash payments to
employees (1,467,613) (1,428,188)
Cash for P.A.Y.E and
National Insurance (882,411) (774,283)
Cash paid for VAT (532,236) (569,679)
Other business payments (156,666) (225,092)
---------- ----------
Net cash inflow from
operating activities 653,544 1,189,942
Return on investments and
servicing of finance
Interest received
202,845 114,912
Net cash (outflow)/inflow
from returns on investments
and servicing of finance 202,845 114,912
---------- ---------
Taxation
Corporation tax paid (330,849) (130,425)
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (67,818) (88,407)
Sale of tangible fixed
assets 1,693 4,025
---------- ----------
Net cash outflow from
capital expenditure and
financial investment (66,125) (84,382)
Equity dividends paid (187,386) (143,267)
---------- ----------
Cash inflow before use of
liquid resources and
financing 272,029 946,780
Financing
Proceeds from exercise of
share options 869 46,453
---------- ----------
Increase in cash in the
period 272,898 993,233
---------- ----------
Notes to preliminary results for the year ended 31 March 1999:
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. The financial information contained in this statement does not
constitute statutory accounts as defined in Section 240 of the
Companies Act 1985.
3. The calculation of earnings per share is based on profit after
taxation of #452,206 (1998: #699,432) and a weighted average of 10,410,611
shares (1998: 10,288,654) in issue during the period.
4. The dividend will be paid to shareholders on 17 September 1999 who
are on the Register on 16 July 1999 (the record date).
5. It is intended to post the Annual Statement and Report to shareholders
on 5 July 1999. Copies are otherwise available from the Registered Office
of the Group at: 394 City Road, London EC1V 2QA. The Annual General Meeting
will be held at: The Business Design Centre, 52 Upper Street, Islington
Green, London N10QH on Monday 2 August 1999 at 11.00 a.m..
END
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