RNS Number:1728S
Glotel PLC
18 November 2003
18 November 2003
Glotel Plc
Interim Results for the six months to 30 September 2003
Highlights
* Improved trading conditions and early signs of recovery in some markets
* Sales of #41.8m, an increase of 10% on H1 and H2 2002/03
* Significant improvement in USA sales, up 9% on H1 2002/03 and 25% on H2
2002/03
* International sales up 42% on H1 2002/3 and 33% on H2 2002/3
* Profit before tax #0.1m (2002: loss #0.4m)
* Maintained strong cash position of #7.1m (2002: #7.5m)
Les Clark, Chairman, commented:
"We experienced improved trading conditions in the 6 months to 30 September 2003
and there are early signs of recovery in some of our markets."
"Sales and activity levels in the USA are encouraging and we anticipate an
improvement in the second half. The UK and International businesses remain
stable".
"There is still some uncertainty that the increase in activity can be sustained.
We have eliminated our losses and expect a small improvement in profits in the
second half."
- ends -
For further information, please contact:
Glotel Plc Weber Shandwick Square Mile
Les Clark, Chairman Nick Oborne
Andy Baker, Chief Executive Katie Hunt
Alan Saffer, Group Finance Director 020 7067 0700
020 7484 3000
www.glotel.com
18 November 2003
Glotel Plc
Interim Results for the six months to 30 September 2003
Chairman's Statement
We experienced improved trading conditions in the 6 months to 30 September 2003
and there are early signs of recovery in some of our markets. Sales have
increased by 10% on the half-year to 30 September 2002. The most significant
improvements were in the USA and in our International business. As a consequence
the contribution of overseas sales is now 51% (48%) and domestic sales 49%
(52%).
Pressure has continued on margins but with a combination of increased sales and
aggressive cost controls we are pleased to report a profit before tax of #0.1m
(2002: #0.4m loss) in the period.
Financial
Sales for the half-year were #41.8m (2002: #38.0m) a 10% increase on both the
first and second half of last year.
The gross margin percentage was 18.2% (2002: 20.4%) compared to 18.6% for the
six months ending 31 March 2003. The change in the mix of business in favour of
our higher margin overseas sales has partially offset the lower margins in the
UK.
We are now benefiting from the cost cutting during last year with total
operating costs lower at #7.5m (2002: #8.2m).
Working capital requirements have increased due to improved sales and cash
balances remain strong at #7.1m (2002: #7.5m) due to strict credit management.
The profit before tax was #0.1m (2002: #0.4m loss) and there were no exceptional
costs in the period or the prior period. The basic earnings per share for the
period was 0.1p (2002: 0.9p loss) and the Board is not recommending the payment
of an interim dividend (2002: nil).
Operational
Economic confidence is slowly improving and some of our clients are beginning to
increase their spend on technology. Specific sectors that have grown in the
period are the telecommunications sector, which now represents 49% of our net
fee income, and the public sector which represents 14%.
The USA had a particularly strong start to the year with sales increasing by 9%
on the same period last year and an impressive 25% compared to the second half.
This growth has been helped by improved account planning and by targeting major
clients who are beginning to release spend for capital projects. We have also
made particular progress with two of the large telecommunication providers where
we have significantly increased our penetration. The USA produced a small loss
in the period but has now returned to monthly operating profits.
We have also experienced rapid growth in our International division which
encompasses mainland Europe, Australia and our global team in London. Sales in
this division increased by 42% versus the half-year to 30th September 2002.
In the UK, sales were up a modest 2% and we generated an operating profit of
#0.3m compared to a small loss in the same period last year. We are still
experiencing margin pressure but there are signs of improved activity levels.
Our strategy of concentrating on fewer vertical markets is proving to be
successful.
Glotel Accounting Systems, where we are a Microsoft Certified Business Solutions
Partner, had an excellent start to the year with sales increasing by 42%
compared to the prior period. This has provided a larger installed client base
from which to generate repeat revenues.
Outlook
Sales and activity levels in the USA are encouraging and we anticipate an
improvement in the second half. The UK and International businesses remain
stable.
Now that trading conditions are stronger we are cautiously increasing our
internal headcount to ensure that we have the capacity to deliver against
greater volumes of client requirements and this will result in a slightly higher
cost base.
There is still some uncertainty that the increase in activity can be sustained.
We have eliminated our losses and expect a small improvement in profits in the
second half.
As always, the support of our staff is our major strength. Having survived the
downturn we are all impatient to do what we do best - to provide an unparalleled
service to our clients and to return to growth.
Les Clark
Chairman
18th November 2003
- ends -
For further information, please contact:
Glotel Plc Weber Shandwick Square Mile
Les Clark, Chairman Nick Oborne
Andy Baker, Chief Executive Katie Hunt
Alan Saffer, Group Finance Director 020 7067 0700
020 7484 3000
www.glotel.com
GLOTEL PLC
Consolidated Profit and Loss Account
For the six months ended 30 September 2003
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#000 #000 #000
Turnover 41,796 37,991 75,900
Cost of Sales (34,193) (30,259) (61,128)
--------------------------------------------------------------------------------
Gross profit 7,603 7,732 14,772
Administrative expenses (7,543) (8,241) (16,292)
Operating profit/(loss) before
operating exceptional items 60 (509) (1,158)
Operating exceptional items (note 1) - - (362)
Operating profit/(loss) 60 (509) (1,520)
Net interest receivable 75 93 173
Profit/(loss) on ordinary activities
before taxation and operating exceptional
items 135 (416) (985)
Operating exceptional items (note 1) - - (362)
Profit/(loss) on ordinary activities
before taxation 135 (416) (1,347)
Tax on profit/(loss) on
ordinary activities (81) 103 494
--------------------------------------------------------------------------------
Profit/(loss) on ordinary activities
after taxation and retained
profit/(loss) for the period 54 (313) (853)
================================================================================
Basic earnings/(loss) per
share (note 2) 0.1p (0.9p) (2.3p)
Diluted earnings/(loss) per
share (note 2) 0.1p (0.9p) (2.3p)
================================================================================
GLOTEL PLC
Consolidated Statement Of Total Recognised Gains And Losses
For the six months ended 30 September 2003
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#000 #000 #000
Profit/(loss) for the
financial period 54 (313) (853)
Currency translation difference
on foreign currency investments (94) (658) (556)
--------------------------------------------------------------------------------
Total recognised gains and losses
relating to the financial period (40) (971) (1,409)
================================================================================
GLOTEL PLC
Turnover & Segmental Information
For the six months ended 30 September 2003
Turnover
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
#000 #000 #000
United Kingdom
Glotel UK 19,777 19,397 39,982
Glotel International* 3,020 2,020 4,114
Other 704 495 1,089
--------------------------------------------------------------------------------
Total United Kingdom 23,501 21,912 45,185
Glotel North America 14,411 13,222 24,776
Glotel Continental Europe* 1,314 1,290 2,577
Glotel Australia* 2,570 1,567 3,362
--------------------------------------------------------------------------------
Glotel Group 41,796 37,991 75,900
================================================================================
*Total Glotel International 6,904 4,877 10,053
================================================================================
Operating profit/(loss)
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Re-stated (note 5) Re-stated (note 5)
#000 #000 #000
United Kingdom
Glotel UK 263 (64) 246
Glotel International* 194 99 166
Other 69 (57) (56)
--------------------------------------------------------------------------------
Total United Kingdom 526 (22) 356
Glotel North America (72) 100 (701)
Glotel Continental Europe* (70) (108) (244)
Glotel Australia* 142 (93) (2)
--------------------------------------------------------------------------------
526 (123) (591)
Central activities (466) (386) (929)
--------------------------------------------------------------------------------
Glotel Group 60 (509) (1,520)
================================================================================
*Total Glotel International 266 (102) (80)
================================================================================
Profit/(loss) before tax
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Re-stated (note 5) Re-stated (note 5)
#000 #000 #000
United Kingdom
Glotel UK 260 (69) 253
Glotel International* 194 99 166
Other 69 (57) (56)
--------------------------------------------------------------------------------
Total United Kingdom 523 (27) 363
Glotel North America (230) (86) (1,100)
Glotel Continental Europe* (100) (135) (293)
Glotel Australia* 122 (104) (21)
--------------------------------------------------------------------------------
315 (352) (1,051)
Central activities (180) (64) (296)
--------------------------------------------------------------------------------
Glotel Group 135 (416) (1,347)
================================================================================
*Total Glotel International 216 (140) (148)
================================================================================
GLOTEL PLC
Balance Sheet
As at 30 September 2003
At At At
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#000 #000 #000
Tangible fixed assets 905 1,578 1,145
Investments 641 641 641
--------------------------------------------------------------------------------
Total fixed assets 1,546 2,219 1,786
Current assets
Debtors 17,255 14,223 15,366
Cash at bank and in hand 7,113 7,544 8,214
--------------------------------------------------------------------------------
24,368 21,767 23,580
Creditors - due within 1 year (8,590) (5,948) (7,794)
--------------------------------------------------------------------------------
Net current assets 15,778 15,819 15,786
--------------------------------------------------------------------------------
Total assets less current
liabilities 17,324 18,038 17,572
Provisions for liabilities and
charges (466) (702) (674)
--------------------------------------------------------------------------------
16,858 17,336 16,898
================================================================================
Capital and Reserves
Called up share capital 1,895 1,895 1,895
Share premium account 15,880 15,880 15,880
Other reserves 100 100 100
Profit and loss account (1,017) (539) (977)
--------------------------------------------------------------------------------
Equity shareholders' funds 16,858 17,336 16,898
================================================================================
GLOTEL PLC
Cash Flow Statement
For the six months ended 30 September 2003
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#000 #000 #000
Operating profit/(loss) 60 (509) (1,520)
Depreciation 395 579 1,065
Profit on sale of fixed assets (59) (14) (5)
(Increase)/decrease in debtors (2,239) 295 (1,101)
Increase/(decrease) in creditors 567 (108) 1,904
Decrease in provisions for
liabilities and charges (198) (541) (583)
--------------------------------------------------------------------------------
Net cash outflow from operating
activities (1,474) (298) (240)
Returns on investment and
servicing of finance 75 93 173
Taxation - corporate taxes refunded 428 343 900
Capital expenditure
Purchase of tangible fixed assets (213) (54) (157)
Sale of tangible fixed assets 112 103 165
--------------------------------------------------------------------------------
Net cash (outflow)/inflow from
capital expenditure (101) 49 8
--------------------------------------------------------------------------------
Net cash (outflow)/inflow
before financing (1,072) 187 841
Financing
Issue of ordinary share capital - 1 1
--------------------------------------------------------------------------------
Net cash inflow from financing - 1 1
--------------------------------------------------------------------------------
(Decrease)/increase in cash in the period(1,072) 188 842
================================================================================
GLOTEL PLC
Notes
1. EXCEPTIONAL ITEMS
No operating exceptional items were incurred in the 6 months to 30 September
2003 (6 months to 30 September 2002: nil). The #0.362m of operating
exceptional items in the year to 31 March 2003 relate to redundancy and
office closure costs associated with the Group's cost reduction programme.
2. EARNINGS/(LOSS) PER SHARE
The calculations of basic and diluted earnings/loss per ordinary share are
based on a profit after taxation of #54,000 (30 September 2002 - loss
#313,000, and 31 March 2003 - loss of #853,000).
The weighted average number of ordinary shares used in the calculations of
the basic and diluted earnings/ loss per share, are as follows:
6 months to 6 months to 12 months to
30 September 30 September 31 March
2003 2002 2003
Number Number Number
Weighted average number of ordinary
shares 36,559,139 36,557,864 36,558,500
Diluted weighted average number of
ordinary shares 37,813,530 36,557,864 36,558,500
3. BASIS OF PREPARATION
The financial information in respect of the six month periods to 30 September
2003 and 30 September 2002 is unaudited.
The comparative figures for the year ended 31 March 2003 do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act
1985 but are extracted from the audited statutory accounts. Full accounts for
that year received an unqualified audit opinion and have been filed with the
Registrar of Companies.
The accounts have been prepared applying the accounting policies in the 2003
Report and Accounts and should be read in conjunction with the Report and
Accounts.
4. DIVIDENDS
No dividend per ordinary share is declared (30 September 2002 and 31 March
2003: nil per ordinary share).
5. SEGMENTAL INFORMATION
Certain staff and other general overhead costs, which in the past have been
reflected in central activities, are now reflected in the individual
operating units to more appropriately reflect the costs of those units. The
comparatives in the segmental information have been re-allocated to bring
them onto the same allocation basis of the current year.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BDLLFXFBLFBX