RNS Number:7937P
Access Plus PLC
16 September 2003
ACCESS PLUS PLC
Interim Results for the six months to 30 June 2003
16 September, 2003
Access Plus, the Bristol based provider of print related marketing services,
announces its interim results for the six months to 30 June 2003. This is the
seventh set of interim results since Access Plus was admitted to the Alternative
Investment Market in November 1996.
* TURNOVER up by 8%
* GROSS PROFIT up by 10%
* PROFIT BEFORE TAX* up by 5%
* INTERIM DIVIDEND increased by 4%
* EARNINGS PER SHARE* up by 8%
* before goodwill amortisation
* Commenting on the results, Tim Brettell, Chairman said, "Our
trading results demonstrate a significant improvement in performance over the
last six months. All three major service areas are on an upward trend."
* "Print Management, our major business area, has remained a rock
during the recent economic storms and it continues to perform well. New
contract wins should ensure further growth for this area in the periods ahead."
* "Both the quality of our offering and the loyalty of our clients
remain strong as seven of out top ten customers increased their spend with
Access during the period."
* "Net debt has virtually been eliminated during the six months.
At the half year the group's balance sheet was materially ungeared and highly
robust."
* "During February, close to the nadir of the market, the company
took the opportunity to buy back a large tranche of its own shares at well below
the current share price."
* "Discussions on a potential offer for all the shares in the
company remain current but the outcome of these talks continues to be
uncertain."
Chairman's Statement
FINANCIAL RESULTS
I am pleased to announce the interim results for the six months ended 30 June
2003. As anticipated, these results provide the first signs of a return to
growth following the new contract wins of last year. The Group reports an 8%
increase in turnover to #15.757m (June 2002 - #14.632m) and a 10% improvement in
gross profit to #4.839m (June 2002 - #4.415m). Group profit before tax, before
charging goodwill of #221,000, was 5% higher at #2.311m (June 2002 - #2.203m).
On the same basis, earnings per share also increased by 8% to 8.85p per share
(June 2002 - 8.21p). Basic earnings per share returned to growth increasing 9%
from 7.02p at June 2002 to 7.64p at June 2003.
The Group's cash generation continues to be strong. Net cash inflows from
operating activities were #3.542m for the first six months of 2003, (June 2002 -
#2.285m), and cash balances increased by #1.739m in the same period (June 2002 -
#2.743m decrease). Net debt reduced from #983,000 in December 2002 to #153,000
in June 2003 indicating the strengthening balance sheet. During the six months
to 30 June 2003, the Company continued to buy back its own shares. On 26
February 2003, it acquired 462,000 shares at 116p each for a total cost of
#541,000, and financed the purchase by drawing down the same amount from a #2.5m
bank facility set up for this purpose.
The Directors have declared an interim dividend of 3.00p per share to be paid on
6 October 2003 to all shareholders on the register at 26 September 2003. The
shares are expected to go ex-dividend on 24 September 2003. This represents a
4.3% increase over the interim dividend declared in September last year.
MARKETS
Print Management continues to be the most dynamic market in which your Group is
operating. The overall market continues to expand and the present activity
level experienced by the Group is high, with large organisations increasingly
looking to reduce operating costs by utilising an outsource service for the
first time.
In addition, it is very encouraging to see volumes in Direct Mail (DM) are once
again showing modest increases in the first six months of the year. This change
has come about due to significant improvement in mailings for the Financial
sector which represents 24% of total volumes. The overall view of your
management is that the DM market is now beginning to improve after the sharp
reduction in volumes and unit costs that began in Spring 2001.
OVERVIEW OF SERVICES
Within these two markets, the Group categorises the project management services
which it provides under the following three headings:
June 2003 June 2002
* Print Management (PM) 66% of sales (67%)
* Direct Mail (DM) 19% of sales (18%)
* Special & Security Services (SS) 15% of sales (15%)
We continue to work closely with our top clients, strengthening the
relationship, and expanding the service offering. This strategy has again been
fruitful. Seven out of our top ten customers have increased their spending
during the period, and these top ten clients now generate 34.5% of our business
(June 2002 - 33%). The increased focus on PM has continued and during the
period the sales teams have won a number of new contracts. Within the DM
market, we have had success in selling additional services to our customers in
the financial and travel sectors.
The new contracts being developed in the second half of last year have now begun
to have a favourable impact on revenues. More recent ones are still being
developed and are not likely to reach their full potential until later this
year. There continues to be a good number of new deals in the pipeline to fuel
future growth. When compared with the same period last year, the Group has
shown improved results in most months.
Looking in more detail at each service area:
Print Management (PM)
PM showed revenue growth of 6% to #10.438m (June 2002 - #9.816m), and this rate
of expansion should continue as the new contracts begin to build stronger
revenues.
Direct Mail (DM)
DM sales were up by 14% to #2.970m (June 2002 - #2.608m). This is a positive
indication of improving conditions in the DM and marketing sectors. This
revenue increase of #362,000 was generated principally by successfully extending
our service offering with two existing clients, one in the holiday sector and
the other in the financial sector. The Group has continued to focus on those
niche areas with repeat revenues.
Special & Security Services (SS)
SS sales improved by 6% to #2.349m (June 2002 - #2.208m). This reflects the
general increase in new sales activity, and is encouraging as this work often is
the feeder for full scale PM contracts or new DM work.
STAFF
Your Group's number one asset is its dedicated and loyal staff. As the Group
sought to counter the effects of previous years' downturns in the UK market,
their perseverance and determination continue to be impressive. I would like to
thank them, on behalf of the Directors and the Company's shareholders, for their
energy, enthusiasm and hard work and to extend a warm welcome to all new members
of staff who have joined us in this period.
Access Plus will continue its successful policy of recruiting only the finest
talent for sales personnel, capable of maintaining a high level of individual
productivity, whilst ensuring quality service to the customer.
FUTURE
In April, the Company announced that it had received an approach, which could
result in an offer being made for its entire issued share capital. On 19
August, the Company confirmed that discussions were still in progress. At this
time, it is still not possible to predict the exact outcome of these
negotiations.
In the meantime, the management and staff remain highly focussed on driving the
business forward and with the current high level of sales activity, your
Directors are confident of a positive outcome for the full year.
T G Brettell
Chairman & Chief Executive
16 September 2003
GROUP PROFIT AND LOSS ACCOUNT
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Turnover 2 15,757 14,632 30,453
Cost of sales (10,918) (10,217) (21,868)
Gross profit 4,839 4,415 8,585
Administrative expenses (2,745) (2,428) (5,103)
Bad debt - - (491)
Operating profit 2,094 1,987 2,991
Bank interest receivable 11 45 53
Interest payable (15) (53) (66)
Profit on ordinary activities before taxation 2,090 1,979 2,978
Taxation on profit on ordinary activities 3 (701) (662) (1,027)
Profit on ordinary activities after taxation 1,389 1,317 1,951
Dividends 4 (515) (539) (1,610)
Retained profit for the period 874 778 341
Earnings per ordinary share
Basic earnings per ordinary share 5 7.64p 7.02p 10.41p
Diluted earnings per ordinary share 5 7.62p 6.94p 10.35p
Earnings per ordinary share before goodwill amortisation
Earnings per ordinary share 5 8.85p 8.21p 14.60p
Diluted earnings per ordinary share 5 8.83p 8.12p 14.51p
Goodwill amortisation #0.221m #0.224m #0.441m
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 June 2003
There are no recognised gains or losses other than the profit of #1.389m for the
six months ended 30 June 2003, #1.317m for the six months ended 30 June 2002,
and #1.951m for the year ended 31 December 2002.
GROUP BALANCE SHEET
At 30 At 30 At 31 December
June June
2003 2002 2002
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Fixed assets
Intangible assets 6 7,689 8,278 7,920
Tangible assets 1,759 1,556 1,732
9,448 9,834 9,652
Current assets
Stocks 1,222 1,195 1,340
Debtors 5,648 7,050 7,460
Cash 7 1,459 905 339
8,329 9,150 9,139
Creditors: amounts falling due within one year (6,247) (7,106) (7,643)
Net current assets 2,082 2,044 1,496
Total assets less current liabilities 11,530 11,878 11,148
Creditors: amounts falling due after more than one year (23) (27) (25)
Provision for liabilities and charges
Deferred taxation (53) (38) (57)
Net assets 11,454 11,813 11,066
Capital and reserves
Called up share capital 1,805 1,873 1,851
Share premium account 9,705 9,705 9,705
Capital redemption reserve 1,176 1,108 1,130
Profit and loss account (1,232) (873) (1,620)
Equity shareholders' funds 11,454 11,813 11,066
COMPANY BALANCE SHEET
At 30 At 30 At 31 December
June June
2003 2002 2002
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Fixed assets
Investments 15,914 16,044 15,914
Current assets
Debtors 3,813 3,815 3,813
Cash 7 527 356 159
4,340 4,171 3,972
Creditors: amounts falling due within one year (6,581) (6,554) (6,240)
Net current assets (2,241) (2,383) (2,268)
Total assets less current liabilities 13,673 13,661 13,646
Net assets 13,673 13,661 13,646
Capital and reserves
Called up share capital 1,805 1,873 1,851
Share premium account 9,705 9,705 9,705
Capital redemption reserve 1,176 1,108 1,130
Merger reserve 915 915 915
Profit and loss account 72 60 45
Equity shareholders' funds 13,673 13,661 13,646
GROUP STATEMENT OF CASH FLOWS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Net cash inflow from operating activities 8(a) 3,542 2,285 3,794
Returns on investments and servicing of finance
Interest paid (15) (53) (66)
Interest received 11 45 53
(4) (8) (13)
Taxation (363) (519) (1,339)
Capital expenditure and financial investment
Purchase of tangible fixed assets (187) (79) (362)
Disposal of tangible fixed assets 58 121 127
Deferred consideration paid (167) - -
(296) 42 (235)
Equity dividends paid (1,047) (1,091) (1,627)
Financing
Redemption of share capital inclusive of costs (542) (194) (503)
Drawdown of bank loan 541 - -
Repayments of bank loan - (1,500) (1,500)
Repayments of Loan Notes (92) (1,758) (1,952)
(93) (3,452) (3,955)
Movement in cash in the period 1,739 (2,743) (3,375)
Reconciliation of net cash flow to movement in net debt
Movement in cash 1,739 (2,743) (3,375)
Drawdown of bank loan (541) - -
Repayments of bank loan - 1,500 1,500
Repayments of Loan Notes 92 1,758 1,952
Change in net debt resulting from cash flows 1,290 515 77
Non cash flows in net debt (460) - -
Movement in net debt 830 515 77
Net debt at 1 January (983) (1,060) (1,060)
Net debt at period end 8(b) (153) (545) (983)
NOTES
1. ACCOUNTING POLICIES
The financial information contained in this interim report does not constitute
statutory accounts. The interim results which have not been audited, have been
prepared using accounting policies and practices consistent with those used in
the preparation of the Annual Report and Accounts for the year ended 31 December
2002.
2. TURNOVER
Turnover represents amounts derived from the provision of goods and services
during the period stated net of value added tax. The turnover and pre-tax
profit is attributable to one continuing activity, the provision of print
related marketing services within the United Kingdom.
3. TAXATION
a) The tax charge is made up as follows:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Current tax
UK Corporation tax 701 666 1,011
Tax under/(over)provided in previous years 4 (4) (4)
705 662 1,007
Deferred tax (4) - 20
701 662 1,027
b) Factors affecting the current tax charge
The tax assessed on the profit on ordinary activities for the six months ended
30 June 2003 is higher than the standard rate of corporation tax in the UK of
30%. The differences are reconciled as below:
2003 2002 2002
#000 #000 #000
Profit on ordinary activities before taxation 2,090 1,979 2,978
Profit on ordinary activities at the standard UK corporation 627 594 893
tax rate of 30% (2002 - 30%)
Goodwill amortisation 66 67 132
Expenses not deductible 8 4 18
Accelerated capital allowances - - (15)
Other timing differences - 1 (5)
Marginal tax reliefs - - (12)
Tax under/(over)provided in previous years 4 (4) (4)
Total current tax 705 662 1,007
4. DIVIDEND
2003 2002 2002
#000 #000 #000
Overprovision in prior year (26) - -
Interim dividend declared/paid 541 539 536
Final dividend - - 1,074
515 539 1,610
The Directors have declared an interim dividend of 3.00p per share
(September 2002 - 2.875p per share), payable on 6 October 2003, to shareholders
on the register on 26 September 2003. The final dividend for the year ended 31
December 2002 was 5.80p per share.
5. EARNINGS PER SHARE
Basic earnings per share has been calculated by dividing the profit on ordinary
activities after taxation in this period of #1.389m (six months ended 30 June
2002 - #1.317m; year ended 31 December 2002 - #1.951m) by the weighted average
number of ordinary shares in issue in this period of 18,189,632 (six months
ended 30 June 2002 - 18,786,424; year ended 31 December 2002 - 18,732,280). At
30 June 2003, the issued share capital of the Company was 18,046,693 10p
ordinary shares.
Diluted earnings per share has been based on profit for the period of #1.389m
(six months ended 30 June 2002 - #1.317m; year ended 31 December 2002 -
#1.951m). The weighted average number of dilutive shares has been calculated as
follows:
At 30 At 30 At 31 December
June June 2002
2003 2002
Basic weighted average number of shares 18,189,632 18,786,424 18,732,280
Dilutive potential ordinary shares from share options 42,381 199,183 120,610
18,232,013 18,985,607 18,852,890
Profit on ordinary activities after taxation of #1.389m (six months ended 30
June 2002 - #1.317m; year ended 31 December 2002 - #1.951m) is after deducting
#0.221m (six months ended 30 June 2002 - #0.224m; year ended 31 December 2002 -
#0.441m) in respect of goodwill arising on acquisition. Restated earnings per
share has been calculated by dividing the adjusted profit of #1.610m by the same
weighted average numbers of ordinary shares in issue at 30 June 2003. There are
no changes to the basis for calculating the comparative or diluted earnings per
share.
6. INTANGIBLE FIXED ASSETS
At 30 At 30 At 31 December
June June
2003 2002 2002
Cost: #000 #000 #000
At 1 January 9,785 9,915 9,915
Adjustment to deferred consideration - - (130)
At period end 9,785 9,915 9,785
Amortisation:
At 1 January 1,865 1,403 1,403
Provided in relation to Software Stationery 221 224 441
Provided in the period 10 10 21
At period end 2,096 1,637 1,865
Net book value at 1 January 7,920 8,512 8,512
Net book value at period end 7,689 8,278 7,920
Goodwill arising on the Software Stationery acquisition is being amortised
evenly over the directors' estimate of its useful economic life of 20 years.
Goodwill acquired as part of the acquisition is being amortised over the
directors' estimate of its useful economic life of between 4 and 20 years.
7. CASH
Cash balances include #0.527m held as collateral for the guarantee of the
Company's Loan Notes.
8. CASH FLOW STATEMENT
a) Reconciliation of operating profit to net cash inflow from
operating activities
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Operating profit 2,094 1,987 2,991
Depreciation 106 109 208
Profit on disposal of tangible fixed assets (4) (4) (2)
Amortisation of intangible fixed assets 10 10 21
Amortisation of goodwill 221 224 441
Release of government grants (2) (2) (5)
Decrease/(increase) in stocks 118 (103) (248)
Decrease/(increase) in debtors 1,812 140 (269)
(Decrease)/increase in creditors (813) (76) 657
Net cash inflow from operating activities 3,542 2,285 3,794
b) Analysis of net debt
30 June Non cash Cash 31 December
2003 flows flows 2002
#000 #000 #000 #000
Cash at bank 1,459 - 1,120 339
Bank overdrafts (545) - 619 (1,164)
Bank loan (541) - (541) -
Guaranteed Loan Notes (526) (460) 92 (158)
Total (153) (460) 1,290 (983)
9. APPROVAL
This report was approved by the Board of Directors on 16 September 2003.
10. DISTRIBUTION
This statement is being sent to all shareholders. In addition, copies are
available from the Company Secretary at the Registered Office.
11. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is based on the
statutory accounts for the financial year ended 31 December 2002. Those
accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
The financial information contained in this interim statement has been
independently reviewed by Ernst & Young LLP, in accordance with current
professional guidance and practice. Their full report will appear in the
statement being sent to all shareholders.
Independent Review Report to Access Plus PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 June 2003 which comprises the Group Profit and Loss
Account, Group Statement of Total Recognised Gains and Losses, Group Balance
Sheet, and Group Statement of Cash Flows, and the related notes 1 to 11. We
have read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the Company having regard to the guidance
contained in Bulletin 1999/4 'Review of Interim Financial Information' issued by
the Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report as required by the AIM Rules
issued by the London Stock Exchange.
Review work performed
We conducted our review having regard to the guidance contained in Bulletin 1999
/4 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data, and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied, unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
Ernst & Young LLP
Bristol
16 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LAMLTMMBBBRJ