RNS Number:1169M
Cyberes PLC
10 June 2003
Cyberes Plc
Interim results for the six months ended 31 March 2003
Highlights
* Gross booked revenue up 21% to #10.16m (31 March 2002, #8.41m)
* Turnover up 38% to #7.08m (31 March 2002, #5.13m)
* Gross margin increased to 6.1% (31 March 2002, 4.7%)
* Net loss reduced to #0.63m (31 March 2002, #1.22m)
* Active customers during March were 295 (March 2002, 306) as focus on
margins sees less profitable tail shortened
* Cyberes Technology Services launched Cyberes Sweden in April 2003
Ian McNeill, Cyberes' Chairman said:
'It has been another challenging period for the travel industry punctuated by
the build up to and then conflict in Iraq and the SARS outbreak. This has led to
a well-documented drop off in travel as uncertainty has reigned in the mind of
customers.
Against this turbulent market, Cyberes has once again lifted its turnover,
gained market share, improved its margins and halved losses.
It is clear that the Cyberes technology platform is a winner and when some
normality in trading conditions returns then the target of profitability is
achievable.
However, customer confidence remains fragile and until this begins to improve,
achieving substantive revenue growth will be challenging.'
For further information:
Tariq Malik, CEO Matthew Moth / Miles Bake
Cyberes plc Bell Pottinger Financial
Tel: 01423 857 420 Tel: 020 7861 3232
Chairman's Statement
Overview
The challenges for the international travel industry have been well documented
over recent months. It has been buffeted once again by major world events,
particularly the war in Iraq and the SARS outbreak. These upheavals have served
to further undermine the travelling public's confidence, resulting in more
journeys being postponed.
Against this uncertain backdrop the Cyberes management team has worked hard to
increase its market share in supplying solutions to Independent Travel Agents
(ITAs) in the UK through its proprietary travel booking and fares system. We
have had some success growing turnover and margins, whilst halving losses by
continued tight cost control.
In Europe, our first international Cyberes Technology Services operation under
the agreement with Sabre was successfully launched in April 2003 within Sweden.
This Swedish joint venture with NTT International Tours and Travel combines
Cyberes travel technology and e-commerce methodologies with NTT's content and
local market knowledge. It also supports and fulfils part of our Sabre
outsourcing agreement by providing Cyberes to over 70 select Sabre customers
throughout the country.
Financial and operating review
The Cyberes team has continued to increase sales despite the turbulent market
place over the past six months.
Gross booked revenue (equating to all bookings made through the Cyberes
interface; including ticketed bookings via third party branded versions) was
#10.16m against #8.41m in the comparable period.
Turnover has grown by 38% over the comparable period in 2002, where global
bookings have been reported as falling by as much as 24%. We are, however,
disappointed with our top-line growth which clearly has been directly affected
by prevailing adverse market conditions.
Over the course of the year Cyberes has continued to concentrate on the selling
of consolidated fares. It has also introduced flat ticketing charges for
published fares that have seen margins on these fares improve to over 6%. This
change along with a margin enhancement programme has seen total margins increase
to 6.1% (31 March 2002, 4.7%).
As at the end of March 2003 Cyberes had cash balances of #2.3m of which #900k
was committed to the airlines. Current operating cash burn is #85k per month
excluding any expenditure on the new product development.
Cyberes cost base reductions have been implemented with a further halving of
losses to #634k from #1.22m during the comparable period in 2002.
Cyberes Travel Services
The Travel Services division uses The Cyberes technology solution to make travel
content available to ITAs. As well as providing a highly cost-effective link to
published fares, Cyberes Travel Services has also developed it's own content for
ITAs.
As we stated in our last report and accounts, we have reorganised our customers
into specific segments to focus on profitability. In the 6 month period 50
customers who did not meet the minimum booking criteria of #3,000 per month were
replaced by 56 new customers who met all the criteria. In addition there was a
churn of 33 customers. As a result the number of active customers decreased by a
net 27.
Overall our active customer base (actives and irregular purchasers) in the last
quarter was 350 of which 295 purchased in March. Yet, over the last quarter due
to uncertainty we have seen an increasing reluctance for customers willing to
make any commitment on sales levels and the interval between purchases by our
irregular customers has increased.
Interest from ITAs in the product has remained high with 105 companies holding
temporary passwords and 20 companies in the training pipeline.
Instant ticketing customers (ITS) have continued to grow in numbers and
historically proven to produce 2.5 times the average sales of non-ITS customers.
The target of 40 customers in England is half way to being achieved.
Over the reporting period we have added new travel content and functionality
through the launch of ferries and low cost hotels.
Cyberes Technology Services
The Cyberes technology system, as used within the framework of the agreement
with Sabre, works in three parts. It acts as a warehouse for Sabre's published
fares and any third party negotiated content. It acts as a system to distribute
those fares and other special offers to ITAs and it allows those ITAs to book
and ticket on-line.
The successful launch of Cyberes Sweden has been the first stage in the
international rollout of the Sabre contract. The implementation of this contract
has been delayed owing to a variety of licensing and technical problems and
factors which have affected the worldwide airline market. However we remain
confident that the roll-out of this contract will now gain momentum.
Outlook
The third quarter of the 2003 financial year has begun in a most challenging
way. As widely reported by the media the war in Iraq, SARS and increased
terrorist activities has meant that bookings are down on last year's levels.
Visibility is limited but we remain convinced that the Cyberes technology
platform is a cost effective solution given current market conditions. This is
evidenced by our gain of market share and improvement in margins. What we now
need is a period of some stable trading to consolidate our successes and drive
top-line revenue growth to achieve our target of breakeven as soon as possible.
We are excited by the prospects of the European rollout of our technology
platform with Sabre and expect that to bear fruit as the year progresses.
Consolidated Profit & Loss Account
for the six months ended 31 March 2003
Six months Six months Twelve months
ended ended ended
31 March 31 March 30 Sept
2003 2002 2002
Note #000 #000 #000
Unaudited Unaudited Audited
Gross booked
revenue -
(unaudited) 1 10,157 8,413 18,351
----------- ----------- -------------
Turnover 1 7,082 5,127 12,028
Cost of sales (6,653) (4,885) (11,362)
----------- ----------- -------------
Gross profit 429 242 666
Administrative
expenses (1,099) (1,485) (2,680)
----------- ----------- -------------
Operating loss (670) (1,243) (2,014)
Net interest
receivable 36 28 53
----------- ----------- -------------
Loss on
ordinary
activities
before
taxation (634) (1,215) (1,961)
Taxation 2 - - -
----------- ----------- -------------
Loss for the
financial
period (634) (1,215) (1,961)
----------- ----------- -------------
Basic and
diluted loss
per share 3 (2.26)p (6.08)p (9.37)p
----------- ----------- -------------
Turnover is derived from the Group's continuing operations.
No separate statement of total recognised gains and losses has been
presented as all such gains and losses have been dealt with in the
profit and loss account.
Consolidated Balance Sheet
as at 31 March 2003
31 March 31 March 30 Sept
2003 2002 2002
#000 #000 #000
Note Unaudited Unaudited Audited
Fixed assets
Intangible assets 440 265 256
Tangible assets 138 216 180
----------- ----------- -----------
578 481 436
Current assets
Debtors 496 547 594
Cash at bank and in hand 2,339 1,624 3,521
----------- ----------- -----------
2,835 2,171 4,115
Creditors: amounts
falling due
within one year (1,525) (1,402) (2,029)
----------- ----------- -----------
Net current assets 1,310 769 2,086
----------- ----------- -----------
Total assets less
current liabilities 1,888 1,250 2,522
----------- ----------- ----------
Creditors: amounts
falling due after
more than one year 4 (740) - (740)
----------- ----------- -----------
Net assets 1,148 1,250 1,782
----------- ----------- -----------
Capital and reserves
Called up share capital 5 2,911 2,111 2,911
Share premium 3,840 3,362 3,840
Profit and loss account (5,603) (4,223) (4,969)
----------- ----------- -----------
Shareholders' funds 1,148 1,250 1,782
----------- ----------- -----------
Consolidated Cash flow statement
For the six months ended 31 March 2003
Six months Six months Twelve months
Ended Ended Ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Unaudited Unaudited Audited
Net cash outflow from
operating activities (981) (678) (46)
Returns on investments and
servicing of finance 36 28 53
Capital expenditure (237) (126) (164)
----------- ----------- -------------
Cash outflow before
financing (1,182) (776) (157)
Financing - issue of
shares - - 1,278
----------- ----------- -------------
(Decrease)/increase in
cash (1,182) (776) 1,121
Reconciliation of net cash
flow to movement in net
debt
(Decrease)/increase in cash
in period (1,182) (776) 1,121
Opening net cash 3,521 2,400 2,400
----------- ----------- -------------
Closing net cash 2,339 1,624 3,521
Reconciliation of operating
loss to net cash outflow
from operating activities
Operating loss (670) (1,243) (2,014)
Depreciation 70 58 117
Amortisation 25 27 51
Movement in debtors 98 (91) (138)
Movement in creditors (504) 571 998
Movement in deferred
income - - 940
----------- ----------- -------------
Net cash outflow from
operating activities (981) (678) (46)
----------- ----------- -------------
Reconciliation of movement
in shareholders' funds
Loss for the financial
period (634) (1,215) (1,961)
New share capital
subscribed net of issue
costs - - 1,278
----------- ----------- -------------
Net movement in
shareholders' funds (634) (1,215) (683)
Opening shareholders'
funds 1,782 2,465 2,465
----------- ----------- -------------
Closing shareholders'
funds 1,148 1,250 1,782
----------- ----------- -------------
Notes
1. Accounting policies
The financial information has been prepared on the basis of the accounting
policies as set out in the Group's financial statements for the twelve
months ended 30 September 2002.
Gross booked revenue
Gross booked revenue represents the value of travel services purchased
utilising the Cyberes system. It includes bookings made by certain third
party super distributors who have access to the Cyberes system via an
electronic own branded interface providing a service to specific niche
markets. Gross booked revenue is not a statutory item and is shown
unaudited.
Turnover
Turnover represents the amounts derived from electronic wholesale
distribution of travel products and services to Independent Travel Agents.
Cash
Cash comprises cash in hand and deposits repayable on demand, less
overdrafts payable on demand.
2. Taxation
There is no charge for taxation based on the result in the period. The Group
has accumulated tax losses available for carry forward against future
taxable profits. The potential deferred tax asset of #1.2m has currrently
not been recognised.
3. Loss per share
Basic and diluted loss per share has been calculated in accordance with FRS
14. By following the rules the diluted loss per share is the same as the
basic loss per share as the share options are anti-dilutive and have
therefore not been used in the calculation. The rules of FRS 14 require that
the company should treat potential shares as dilutive if their conversion to
ordinary shares would decrease net profit or increase net loss per share.
4. Creditors amounts falling due after one year
This represents deferred income which occurs as part of a contracted
agreement covering transaction fees advanced as part of the contract in
duration until 21 March 2007. An amount of #200,000 (31 March 2002 nil) is
included within creditors amounts falling due within one year.
5. Placing and open offer
On 19 July 2002 the company issued 8,000,107 ordinary shares of 10p each via
a placing and open offer to provide additional working capital. The
consideration received after expenses was #1,278,000.
6. Interim financial information
The unaudited financial information for the six months ended 31 March 2003
and six months ended 31 March 2002 do not constitute full statutory accounts
within the meaning of section 240 of the Companies Act 1985. The financial
information for the twelve months to 30 September 2002 is based on the
audited accounts for that period which have been reported upon, without
qualification, by the auditors and have been delivered to the Registrar of
Companies.
7. Approval of interim report
The interim report was approved by the board on 09 June 2003.
8. Address for copies of this report
Copies of this report are available from the Company Secretary, Cyberes plc,
Mitre House, North Park Road, Harrogate HG1 5RX.
Independent review report by KPMG Audit Plc to Cyberes Plc
Introduction
We have been engaged by the company to review the financial information set out
on pages 4 to 7 and 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 in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
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 in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.
Review work performed
We conducted our review in accordance with 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 is substantially less
in scope than an audit performed in accordance with 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 31 March 2003.
KPMG Audit Plc
Chartered Accountants
1 The Embankment
Neville Street
Leeds LS1 4DW
Notes to editors
Cyberes provides bookings systems and software to independent travel agents
("ITAs"). In the UK, it is also a flight consolidator in its own right, selling
travel tickets. The business comprises two divisions, Cyberes Travel Services
which deals directly with the ITAs, and Cyberes Technology Services, which is
used within the framework of the Sabre agreement.
This information is provided by RNS
The company news service from the London Stock Exchange
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