RNS Number:3024S
Twenty PLC
15 April 2008
15 APRIL 2008
TWENTY PLC
(AIM: TWE)
FINAL RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2007
The Board of Twenty Plc ('Twenty' or 'the Group'), an investment vehicle
focusing on the marketing services sector, announces its final results for the
year ended 31 December 2007.
FINANCIAL HIGHLIGHTS
* Sales growth of 31% on 2006;
* Turnover �18,796,748 (2006: �14,326,155);
* Gross profit improvement reported at the half year has been maintained
at 51.6% (2006: 48.8%);
* Profit before tax �514,612 (2006: �932,763)
* Adjusted Profit before tax �772,157 (adjusted for �257,545 of one off
restructuring costs)
* EPS of 0.70p (basic and diluted) (2006: 1.96p)
* Adjusted EPS of 1.07p;
OPERATIONAL HIGHLIGHTS
* Successful acquisition of Ominor in August;
* Significant contract wins including Royal Mail, Tenpin, Luminar, BUPA, the
Great Little Trading Company and Sky;
* Re-organisation of Dataforce subsidiary into five sector focused
business units;
* Relocation of business areas into new premises in Milton Keynes HQ and
Northampton;
* Investment in new technology for Dataforce data processing and direct
communications divisions;
* PCI compliance obtained - one of only 30 organisations in UK to do so;
* Group now well positioned to grow both organically and by acquisitions.
The Annual Report will be available and sent to shareholders on 19 May 2008.
Commenting on today's results, Ian Lancaster, CEO, said: "The investments and
repositioning of Twenty's core asset, Dataforce Group, has been successful and
your Board is confident that it will provide the platform for growth in 2008 and
beyond. We have created a strong platform for the year ahead which should allow
us to grow both organically or via complementary acquisition."
Enquiries:
Twenty Plc Tel: 01908 329800
Ian Lancaster, Chief Executive
www.twentyplc.com
Daniel Stewart Tel: 020 7776 6550
Graham Webster/Katie Shelton
Bishopsgate Communications Ltd Tel: 020 7562 3350
Dominic Barretto/ Nick Farmer
CHAIRMAN'S STATEMENT
It has been a significant year of change for Twenty. The Board and management
have been focused primarily on developing the core business, Dataforce, to
create a platform for future growth. The year saw one acquisition, Ominor, a
full service e-commerce provider. We took a prudent approach to acquisitions
which was justified by the challenging economic conditions in the second half of
the year.
I can report on behalf of the Twenty Board that the second half of the financial
year was in line with market expectations. The strategy of building a marketing
services Group with data intelligence at its heart through a combination of
organic growth and selective acquisitions remains at the forefront of the
Board's plans for Twenty. The market for integrated marketing communications is
growing and Twenty is uniquely placed to exploit these opportunities.
Charles Perkins, a Non-Executive Director of Twenty, is emigrating to Hong Kong
and therefore has stepped down from the Board. Charles has been a highly valued
member of the team and on behalf of the board I would like thank him and wish
him every success in the future.
In conclusion, I would like to thank the Chief Executive, his management team
and all the employees for their contribution to the Group during the last year.
Mark Patron
Non-Executive Chairman
15 April 2008
CHIEF EXECUTIVE'S STATEMENT
Twenty has progressed significantly during 2007 towards its vision of creating a
customer intelligence led marketing services business by concentrating on
repositioning the central asset within the Group which is Dataforce.
The Group made just one acquisition in August 2007, acquiring Ominor, an
E-Commerce provider to enable access to a client base and skills within the fast
growing digital arena.
However, within a toughening economic and financial market place the Board took
the view that we would not overpay for acquisitions at a time when liquidity was
declining and the smaller capitalised AIM stocks were being marked down. It was
the Board's view that investing in our existing assets to drive organic growth,
would over the medium term prove to be most prudent.
During 2007 I'm pleased to report that the repositioning of the Group within our
marketplace has progressed well with the results starting to flow through into
client wins in the last quarter of 2007. This bodes well for the coming years
as the foundations to build a substantial Group have been laid.
The specific achievements during 2007 are listed below as the highlights of a
very intensive year of change for the business.
Financials
The results for the period report sales growth of 31% on 2006 reflecting full
year trading of Dataforce Group Limited (acquired on 5 April 2006), Emaginating
Limited (acquired on 19 December 2006) and 5 months of trading of Ominor Limited
(acquired on 8 August 2007).
The gross profit improvement reported at the half year has been maintained at
51.6% against 48.8% in 2006. Administration expenses have increased year on
year as a result of full year trading from subsidiaries together with the
restructuring and repositioning of Dataforce in the market place. It is
anticipated that the restructuring will continue into the first half of 2008
with the benefits flowing through in the second half of 2008 and beyond.
Operating profit for the Group was �0.78m (2006: �1.09m) which delivered
earnings per share of 0.70p (basic and diluted) (2006: 1.96p). These results
include one-off severance payments made as a result of the restructuring
programme, totalling �0.26m. After adjusting for these payments underlying
operating profit was �1.04m with adjusted earnings per share of 1.07p. This
result was in line with our expectations.
Your Board has been making significant changes to operating environments during
the year. These moves, detailed further below, have resulted in approximately
�0.13m of short term excess property costs during the last 6 months of the year.
The Group had net cash outflow of �0.49m during the period after debt repayments
of �0.42m. This includes cash of �1.38m used to acquire Ominor of which �1.00m
was raised from our bank, an equity dividend of �0.97m and capital expenditure
for the period of �0.59m.
Cash at the end of the period was �0.20m (2006: �0.69m). At the end of the
period net debt was �3.00m with repayments due in the next 12 months of �0.76m.
In addition, the Group has a �2.00m invoice financing facility of which �1.50m
was drawn down at the end of the period. This balance is reflected in Trade and
Other Payables.
Developments within the Group
As with every change programme the success relies heavily on our staff buying
into the new vision and taking on board the necessary steps to becoming a
different business, which they have done.
We have focussed on recruiting a number of key individuals to lead our five
sector focussed business units, which are now fully staffed and contributing
positively to the ongoing growth of the business.
We embarked on a project in 2007 to create fit for purpose buildings across the
Group, which I'm pleased to report is nearing completion. In July 2007 we moved
our data analytics, IT, Finance, HR and commercial teams into a new head office
location in Milton Keynes.
The Group also established an industry leading fulfilment, charitable donation
and campaign processing centre in Northampton which opened in December 2007.
The development of our new 250 seat contact centre in Northampton was commenced
in November 2007 and will open in June 2008.
The result is that we now have top class facilities to serve our clients and
staff which presents Dataforce in a different perspective and supports our
product vision. The Contact Centre and Fulfilment centre refurbishment capital
cost of �1.2m has been funded off our balance sheet as the landlord made the
investments in return for new ten year leases with 5 year break clauses.
Twenty achieved a number of important quality standards which will maintain
current business and further enable new business wins. Of specific note was
that Dataforce became the first marketing services supplier within the UK to
achieve the credit card processing industry standard for data security, PCI
compliance, which our charity clients will demand moving forward.
The Group continued to invest in new technology to enable a step change in our
data capture and processing capabilities within our campaign services and
donation business with the introduction of flat bed scanning systems. This
enables data capture from screen image and much faster processing than
previously.
During 2007, within Dataforce we handled approximately 8 million calls,
despatched and received over 85 million postal items, and banked more than �60m
on behalf of our charity clients. Our staff levels across the Group averaged
593 heads with quarter 4 peaking at 800 heads.
In our Direct Communications business unit we invested �1m in new poly wrapping
lines to enable this unit to compete in its market place as a result of
increased output. The turnaround of this business unit is on track with a new
management and sales team having joined in Q3 2007.
The structure of our cost base within the Group has been refocused in Q4 towards
our growth agenda, with 50% increase in investment in new business development
teams, 25% increase in project implementation and training. This has been fully
funded by a corresponding reduction in our senior operational management and
other overheads.
We have commenced a programme to invest in the development of our key people in
Q3 2007 which will be ongoing. This had a highly positive impact on the
organisation which will return, through reduced staff turnover, greater
efficiency as our teams work more effectively on behalf of our clients.
Client Activity
Dataforce has established a strong new business generation team which was a
function not in existence on acquisition in 2006. As a result, the new business
pipeline has been building through the year and is now at a healthy level.
The most significant win during 2007 was the appointment by Royal Mail as a data
partner which is an important external endorsement of the repositioning of
Dataforce into a data centric marketing services platform provider. We
anticipate being able to announce new business wins through 2008 as this
partnership provides us access to the extensive Royal Mail client base.
In addition we also won new contracts within the wider Group with Ten Pin
(Georgica plc), Luminar, BUPA, Evans Cycles, Hot Diamonds and Sky. We also
extended our existing business with the Great Little Trading Company signing a
new 3 year contract.
All of the new business won in 2007 was a result of our data intelligence led
marketing platform proposition, unique in our market place, which further
endorses our strategy.
Acquisition of Ominor
The acquisition of Ominor supports the Group's 'buy and build' strategy through
acquiring businesses that support the provision of integrated marketing
solutions which can be deployed in the multi-channel arena on behalf of the
Group's clients. Ominor is a full service e-commerce provider with skills in the
concept to implementation, hosting and optimisation of e-commerce platforms
across a wide range of industry sectors. The strong growth of digital business
is a key driver in the strategy of Twenty and Ominor is key to the execution of
this.
Within the wider Group the integration of Emaginating and Ominor has been
completed with the establishment of all Group companies on a new Finance system,
HR system and cross selling forums.
We remain active in seeking further acquisitions within the digital and data
areas and have pursued a number during 2007 where we have chosen not to pay
excessive multiples. We anticipate the market moving from a sellers to a
buyers market in 2008 which should enable the Group to accelerate acquisitions.
Outlook
The Outlook is positive for the Group as all three businesses have strong
management teams, new business pipelines and differentiated propositions around
our data centric marketing platform. Dataforce has recently picked up momentum
winning the last three competitive tenders within the marketing platform arena.
The partnership with Royal Mail, which is itself changing to derive income from
new revenue sources outside the traditional core of providing postal services,
has started very well. We are optimistic that this partnership will drive
significant revenues in the coming years.
However, the weakening economy may have an impact on the rate of our growth as
our clients find their markets tougher as consumer spend tightens.
The Board continues to strive to boost the share price to reflect the value of
the assets within the Group but is adversely affected by investor confidence and
current liquidity at the smaller cap end of the AIM market.
The investments and repositioning of Twenty's core asset, Dataforce Group, has
been successful and your Board is confident that it will provide the platform
for organic growth in 2008 and beyond.
Ian Lancaster
Chief Executive
15 April 2008
Consolidated Income Statement (Audited)
For the year ended 31 December 2007
Year to Year to
31.12.2007 31.12.2006
Audited Audited
� �
Continuing operations
Revenue 18,796,748 14,326,155
Cost of sales (9,094,821) (7,333,030)
Gross Profit 9,701,927 6,993,125
Administrative expenses (8,918,569) (5,897,722)
Operating Profit 783,358 1,095,403
Finance Income 13,497 7,449
Finance Costs (282,243) (170,089)
Profit before Taxation 514,612 932,763
Taxation (177,323) (211,401)
Profit for the year from continuing
operations 337,289 721,362
Attributable to:
Equity holders of the parent 337,289 721,362
337,289 721,362
Earnings per share:
Basic 0.70 p 1.96 p
Diluted 0.70 p 1.96 p
Consolidated Balance Sheet (Audited)
At 31 December 2007
As at As at
31.12.2007 31.12.2006
Audited Audited
� �
Assets
Non-current assets
Property, plant and equipment 1,193,941 1,022,365
Software development costs 178,656 -
Goodwill 12,876,281 9,980,273
14,248,878 11,002,638
Current assets
Trade and other receivables 5,114,012 4,565,793
Cash and cash equivalents 198,719 686,273
Total current assets 5,312,731 5,252,066
Total assets 19,561,609 16,254,704
Equity & liabilities
Current liabilities
Trade and other payables 5,306,662 4,206,850
Obligations under finance leases 140,775 143,091
Current tax liabilities 108,570 -
Interest bearing loans, overdrafts and
bank loans 758,231 458,042
Total current liabilities 6,314,238 4,807,983
Non-current liabilities
Bank loans 2,128,041 1,851,674
Other creditors 1,257,008 -
Obligations under finance leases 175,071 173,744
Total non-current liabilities 3,560,120 2,025,418
Total liabilities 9,874,358 6,833,401
Equity
Share capital 4,827,060 4,827,060
Share premium account 3,901,164 3,901,164
Share options reserve 43,431 18,231
Retained earnings 915,596 674,848
Total equity 9,687,251 9,421,303
Total equity & liabilities 19,561,609 16,254,704
Consolidated Cash Flow Statement (Audited)
For the year ended 31 December 2007
As at 31.12.2007 As at 31.12.2006
Audited Audited
� � � �
Cash flow from operating activities
Profit for the year 337,289 721,362
Adjustments for:
Finance income (13,497) (7,449)
Finance costs 282,243 170,089
Taxation 177,323 211,401
Depreciation of property, plant and
equipment 602,167 393,953
Share-based payment expense 25,200 18,231
Gain on disposal of property, plant
and equipment (26,704) (648)
1,046,732 785,577
Operating cash flows before movements in
working capital 1,384,021 1,506,939
Decrease in inventories - 117,178
(Increase)/decrease in receivables (363,806) 7,797
Increase/(decrease) in payables 840,755 (524,691)
476,949 (399,716)
Cash generated from operations 1,860,970 1,107,223
Taxation paid (37,082) (262,639)
Net cash from operating activities 1,823,888 844,584
Investing activities
Interest received 13,497 7,449
Proceeds on disposal of property,
plant and equipment 26,704 648
Purchases of property, plant and
equipment (620,112) (217,151)
Acquisition of subsidiary undertakings (1,669,260) (10,008,868)
Interest bearing loans and overdrafts
acquired with subsidiary (96,024) (70,183)
Net cash used in investing activities (2,345,195) (10,288,105)
Financing activities
Interest paid (282,243) (170,089)
Repayments of borrowings (423,444) (290,284)
Repayments of obligations under (164,019) (92,190)
finance leases
Proceeds on issue of shares - 7,674,088
Dividends (96,541) -
New bank loans raised 1,000,000 2,600,000
Net cash from financing activities 33,753 9,721,525
Net (decrease)/increase in cash and (487,554) 278,004
cash equivalents
Cash and cash equivalents at the
beginning of the year 686,273 408,269
Cash and cash equivalents at the end
of the year 198,719 686,273
Earnings per Share
The calculation of the basic and diluted earnings per share attributable to the
ordinary equity holders of the company is based on the following data:
2007 2006
� �
Earnings
Earnings for the purposes of basic earnings
per share
337,289 721,362
Effect of dilutive potential ordinary shares: - -
Earnings for the purposes of diluted earnings per share 337,289 721,362
2007 2006
No. No.
Number of shares
Weighted average number of
ordinary shares 48,270,600 36,714,884
Weighted average number of ordinary shares for the purposes of
diluted EPS 48,270,600 36,714,884
Basic Earnings per Share (in pence) 0.70 1.96
Diluted Earnings per Share (in pence) 0.70 1.96
Share options and warrants do not have a dilutive effect because the exercise
price was above the average market price during the period.
Basis of preparation
The financial information contained in this document does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The comparative figures for the financial period ended 31st December 2006 have
been extracted from the company's audited financial statements for that
financial period. The statutory accounts for the period ended 31 December 2006
have been given an unqualified audit report and have been filed with the
Registrar of Companies. The financial information set out above has been
prepared in accordance with the company's accounting policies and International
Financial Reporting Standards (IFRS) and International Accounting Standards
(IAS).
The Directors are of the opinion that the Group has sufficient working capital
for the foreseeable future and therefore the accounts have been presented on the
going concern basis.
Annual Report
The Annual Report will be available and sent to shareholders on 19 May 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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