RNS Number:2670O
Statpro Group PLC
04 August 2003
Monday, 4 August 2003
STATPRO GROUP PLC
("StatPro", the "Group", or the "Company")
Interim results for the six months ended 30 June 2003
StatPro Group plc, a leading AIM listed provider of performance
measurement solutions for the global asset management industry,
announces its results for the six months ended 30 June 2003.
Highlights
> Turnover up 18% to #4.06 million (2002 - #3.43 million)
> Annual value of continuing recurring revenues increased to
#7.55 million (2002 - #6.62 million)
> Operating profit of #0.01m (2002 - loss of #1.63m),
benefiting from revenue growth and last year's reorganisation
> Generated an operating cash inflow of #0.83 million (2002 -
outflow #0.63 million) - cash positive for last twelve months
> Successful transfer of listing to AIM to allow greater
flexibility
Commenting on the results, Carl Bacon, Chairman of StatPro said:
"Whilst we retain a cautious outlook for the second half of 2003,
there are some signs of an improvement in our market as IT
projects that have been delayed are being reactivated. In the
meantime, our key financial objectives are to build further on
the progress made in the first half, to continue to generate cash
from operations and to put the Company firmly into profit for the
year as a whole."
- Ends -
For further information, please contact:
StatPro Group plc www.statpro.com
Justin Wheatley, Chief Executive On 4 August: (020) 7067 0700
Andrew Fabian, Finance Director Thereafter: (020) 8410 9876
Weber Shandwick Square Mile
Reg Hoare/Rachel Taylor (020) 7067 0700
A briefing for analysts will be held at 9.15 for 9.30am today at
the offices of Weber Shandwick Square Mile, Fox Court, 14 Gray's
Inn Road, London, WC1X 8WS.
Notes to Editors: StatPro Group plc is a leading provider of
performance measurement solutions for the global asset management
industry, which floated on the London Stock Exchange in May 2000.
StatPro has grown its annual recurring software revenue base from
less than #1.0 million on flotation to #7.0 million at 30 June
2003. StatPro transferred its listing to AIM on 16 June 2003.
CHIEF EXECUTIVE'S REVIEW
Highlights
2003 started under difficult circumstances with a very uncertain
political and economic situation globally, which has resulted in
asset managers continuing to be cautious about their investments
in IT projects. Although there are some limited signs that
conditions may improve as markets stabilise, the outlook remains
tough. Despite these troubled times, it is pleasing to report
that StatPro has continued to grow with turnover for the six
months to 30 June 2003 up 18% to #4.06 million (2002 - #3.43
million). We have also made an operating profit of #0.01 million,
which, while modest, is a significant improvement on the #1.63
million loss for the first six months of last year.
This improvement in the Company's performance is most evidenced
by the fact that we have generated a positive operating cash
inflow of #0.83 million compared to an operating cash outflow of
#0.63 million for the same period last year. Since we generated a
positive operating cash flow for the second half of last year, we
have now been operationally cash flow positive for the last
twelve months. We will continue to focus on cash generation for
the rest of the year as our main financial objective.
Regional performance and sales
In the first six months of 2003 we made 19 sales of which nine
were to existing clients. For the first time, we have won clients
in California and we have found that activity in the US (apart
from New York) is generally picking up. We have also signed new
contracts in France, Italy, Norway, Singapore, South Africa and
the UK. We have focused on multi-year contracts, both for new
clients and converting existing clients to longer term contracts.
At the start of the year, #1.1 million of our annualised software
licence fee revenue was contracted for more than one year and its
value had risen to nearly #2.0 million by 30 June 2003
(representing approximately 29% of our current recurring software
licence revenue). We aim to continue to increase the level of
multi-year contracts. Our total annualised recurring revenues now
stand at #7.55 million and covers our current annual cash
operating expenses.
Whilst the prime objective of StatPro is to build recurring
revenues from software sales, we have put considerable effort
into building up our consulting sales over the last 12 months.
The result is that we have increased consulting sales by 53%
compared to the same period last year to #0.58 million (2002 -
#0.38 million). With asset managers making cutbacks in staffing
levels, we have seen a rise in demand for our expertise in
performance measurement. Reviews of implementations undertaken by
our consultants have also helped clients use our systems more
productively. This in turn has helped us achieve sales of
additional software modules to existing clients. We expect this
trend to continue and are actively seeking to increase system
usage with all our clients as this will lead to further and more
profitable sales.
Product development
Our product development continues to be vital to maintaining the
performance advantage and deeper analysis capabilities of our
systems and to ensure that they remain core applications for our
clients.
In pursuit of these objectives, we will be releasing several new
modules over the next few months, which we have been developing
during the first half of 2003. Our main project is the
integration of our Fixed Income system with our Performance and
Attribution system. These will form a new "Data Hub" to which we
will be able to add an increasing number of portfolio analysis
products. It will still be possible, however, for clients to
subscribe for each product individually and then add other
modules as they require. We believe that this flexibility will
allow us to target an even wider market. It will also facilitate
our product alliances with other companies that supply
complementary products to our target market. Many clients are
thus seeking an integrated solution without necessarily acquiring
all systems from one provider.
Strategy
StatPro's strategy has always been to expand its product range to
enable cross selling of products to existing clients. We intend
to continue to pursue this approach by seeking to acquire further
complementary products. We believe that current market conditions
are likely to yield a number of opportunities and we will
continue to review these as appropriate.
AIM
In line with this strategy and as previously announced, on 16
June 2003 the Company's listing was transferred to the
Alternative Investment Market of the London Stock Exchange
("AIM") from the Official List of the UK Listing Authority (the
"Official List"). The principal reason for the transfer was that
the Directors believe that this will allow the Company to take
advantage of the greater degree of flexibility afforded by AIM in
implementing its strategy of acquiring additional products, given
the lower costs of complying with the AIM listing rules. The
transfer to AIM will enable the Company to act quickly when
opportunities do arise without incurring the disproportionately
large expenses of being a fully listed company. In addition to
lower costs, StatPro should also benefit from AIM's focus on
smaller, fast growing companies.
Outlook
Although we remain cautious about the outlook for the second half
of 2003, there are signs that our market will improve as IT
projects that have been held back for several years are being
reactivated. In the meantime our financial objectives are to
build further on the progress made in the first half of 2003, to
continue to generate cash from operations and to put the Company
firmly into profit for the year as a whole.
Justin Wheatley
Chief Executive
OPERATING AND FINANCIAL REVIEW
Overview
Our revenue has grown for the seventh consecutive half-year
period since flotation and the business has made an operating
profit of #0.01 million in the six months to the end of June 2003
compared with an operating loss of #1.63 million in the
comparable period. Following the operating cash inflow achieved
in the second half of 2002 of #0.15 million, the business
generated an operating cash inflow of #0.83 million in the six
months to the end of June 2003, resulting in a total operating
cash inflow of #0.98 million over the past twelve months.
Turnover
Turnover increased by 18% to #4.06 million (2002 - #3.43
million). Software licence revenue grew by 25%, and consulting
revenue grew by 53%. This was offset by a fall in other
recurring revenues of 41% primarily due to the absence of revenue
from the Swiss agency agreement, which was terminated in August
2002. The split of revenue by type was as follows:
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
# million # million # million
Turnover
Software licences 3.19 2.56 5.52
Other recurring revenue 0.29 0.49 0.75
Other revenue 0.58 0.38 0.96
-------------------------------------------------
4.06 3.43 7.23
-------------------------------------------------
We made 19 sales in the first half of 2003 (2002 - 15), of which
9 (2002 - 5) were additional modules or users to existing
contracts. The total number of contracts increased from 136 at
the start of the year to 146 at the end of June 2003 (2002 -
135); taking into account three notified cancellations, of which
only one is expected to affect revenue in 2003, the number of
continuing contracts is 143 (2002 - 130). The proportion of
recurring revenue on multi-year contracts increased from 18% at
the end of December 2002 to 29% at the end of June 2003.
The annual value of continuing recurring revenue, which is
analysed below, increased to #7.55 million at 30 June 2003 from
#6.62 million at 30 June 2002 (excluding revenue from the
terminated Swiss agency agreement) and from #6.85 million at 31
December 2002.
At 30 June At 30 June At 31 December
2003 2002 2002
Annualised Annualised Annualised
value value value
# million # million # million
Recurring revenues
Software licences 7.00 5.98 6.28
Other recurring revenue 0.55 0.64 0.57
-----------------------------------------------------
Continuing recurring revenue 7.55 6.62 6.85
Recurring revenue from Swiss agency * - 0.35 -
-----------------------------------------------------
Total recurring revenue 7.55 6.97 6.85
-----------------------------------------------------
* Terminated on 1 August 2002
Operating expenses
The restructuring implemented in July 2002 has reduced operating
expenses (before goodwill amortisation) by #1.02 million (21%) to
#3.90 million (2002 - #4.92 million) in the first half of 2003.
The average number of employees during the first six months of
2003 was 77 (2002 - 107). The increase in turnover coupled with
tight control over our cost base has enabled StatPro to achieve
an operating profit in the first half of 2003, as shown in the
following table:
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
# million # million # million
Revenue 4.06 3.43 7.23
Operating expenses * (3.90) (4.92) (8.83)
-----------------------------------------------------
Operating profit/(loss) * 0.16 (1.49) (1.60)
Goodwill amortisation (0.15) (0.14) (0.29)
-----------------------------------------------------
Operating profit/(loss)
(before exceptional items) 0.01 (1.63) (1.89)
Exceptional items - - (0.31)
-----------------------------------------------------
Operating profit/(loss) 0.01 (1.63) (2.20)
-----------------------------------------------------
* before goodwill amortisation and exceptional items
Goodwill amortisation
The goodwill amortised during the six months to 30 June 2003 of
#0.15 million (2002 - #0.14 million), which predominantly relates
to the goodwill arising on the acquisition of AMS in 2000,
continues to be amortised over five years. The operating profit
before goodwill amortisation amounted to #0.16 million (2002 -
loss of #1.49 million).
Interest
Net interest expense, which results from interest accrued on bank
loans, the convertible loan and finance leases, less interest
earned on cash and deposits, was #0.09 million (2002 - #0.05
million).
Taxation and Loss per share
Loss before taxation reduced by 95% to #0.08 million (2002 -
#1.68 million). A provision has been made for corporation tax for
an overseas subsidiary. Earnings per share before goodwill
amortisation amounted to 0.2p (2002 - loss per share of 4.8p) and
loss per share after goodwill amortisation decreased to 0.3p
(2002 - 5.2p).
Cash flow
In line with the Directors' commitment to the previously stated
goals of generating cash, the business had an operating cash
inflow during the first 6 months of #0.83 million (2002 - outflow
of #0.63 million). The business has therefore generated a total
operating cash inflow of #0.98 million over the twelve-month
period to the end of June 2003. This has allowed the Group to
repay #0.50 million of its bank loan facility during the first
half of the year.
Balance sheet
The Group's net liabilities increased to #2.90 million (2002 -
#2.15 million) from #2.81 million at 31 December 2002. The level
of debtors, of which the major component is trade debtors,
decreased to #2.73 million (2002 - #3.08 million). The short-
term creditors of #6.84 million (2002 - #5.52 million) includes
deferred income, a non-cash liability, of #4.34 million (2002 -
#3.82 million).
The Group's net debt at 30 June 2003 amounted to #0.75 million
compared to #1.43 million at 31 December 2002 and #1.51 million
at the end of June 2002. The unsecured convertible loan of #1.00
million nominal value issued in July 2002 is repayable on 2
January 2004 and is therefore now shown on the balance sheet as a
current creditor at its carrying value of #0.99 million. The
cash balance at the end of June 2003 was #1.71 million (2002 -
#0.25 million).
Dividends
The Directors currently propose continued investment in growing
the business and are therefore not proposing to recommend any
dividend at present.
Andrew Fabian
Finance Director
Consolidated Profit and Loss Account
Notes Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Turnover - continuing operations 4,065 3,432 7,229
Operating expenses before
goodwill amortisation (3,900) (4,917) (8,832)
Amortisation of goodwill (152) (146) (294)
Exceptional items 1 - - (306)
Operating expenses (4,052) (5,063) (9,432)
----------------------------------------------
Operating profit/(loss) - continuing operations 13 (1,631) (2,203)
Net interest payable (91) (52) (170)
----------------------------------------------
Loss on ordinary activities before taxation (78) (1,683) (2,373)
Taxation 2 (12) - -
----------------------------------------------
Loss after taxation (90) (1,683) (2,373)
==============================================
Loss per share - basic 3 (0.3)p (5.2)p (7.3)p
Earnings/(loss) per share -
before amortisation of goodwill and
exceptional items 0.2p (4.8)p (5.5)p
Statement of Group Total Recognised Gains and Losses
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Loss for the financial period (90) (1,683) (2,373)
Exchange differences offset in reserves (22) (20) (19)
---------------------------------------------
Total recognised gains and losses for the period (112) (1,703) (2,392)
=============================================
Consolidated Balance Sheet
Notes Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Fixed assets
Intangible assets 564 803 716
Tangible assets 595 798 674
---------------------------------------------
1,159 1,601 1,390
Current assets
Debtors - amount falling due after one year 280 313 308
Debtors - amount falling due within one year 2,449 2,769 3,087
Cash at bank and in hand 1,709 246 1,486
---------------------------------------------
4,438 3,328 4,881
Creditors - amounts falling due within one year
Convertible loan 4 (986) - -
Others (5,850) (5,517) (6,269)
---------------------------------------------
5 (6,836) (5,517) (6,269)
Net current liabilities (2,398) (2,189) (1,388)
Total assets less current liabilities (1,239) (588) 2
Creditors - amounts falling due after more
than one year
Deferred income (196) - (213)
Convertible loan 4 - - (971)
Bank loans (1,441) (1,562) (1,602)
Finance lease obligations (28) - (26)
---------------------------------------------
(1,665) (1,562) (2,812)
Net liabilities (2,904) (2,150) (2,810)
==============================================
Capital and reserves
Called up share capital 329 325 328
Share premium account 8,558 8,515 8,541
Warrant reserve 424 424 424
Profit and loss account (12,215) (11,414) (12,103)
---------------------------------------------
Equity shareholders' deficit (2,904) (2,150) (2,810)
=============================================
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Net cash inflow/(outflow) from
operating activities 827 (631) (476)
Returns on investments and servicing of finance
Interest received 22 10 22
Interest paid (82) (54) (143)
Issue costs in respect of bank loan - - (27)
Issue costs in respect of convertible loan - - (43)
--------------------------------------------------
Net cash outflow from returns on investments and
servicing of finance (60) (44) (191)
Taxation
Tax received - 1 -
Capital expenditure and financial investment
Purchase of tangible fixed assets (61) (119) (162)
--------------------------------------------------
Net cash outflow for capital expenditure (61) (119) (162)
Acquisitions and disposals
Deferred consideration proceeds
from disposal of subsidiary undertaking - - 89
Cash subscription on acquisition of subsidiary undertaking - - (53)
Costs incurred on acquisition of subsidiary undertaking - - (12)
Cash acquired on acquisition of subsidiary undertaking - - 55
--------------------------------------------------
Net cash inflow from acquisitions and disposals - - 79
Net cash inflow/(outflow) before management of liquid
resources and financing 706 (793) (750)
Management of liquid resources
Movement in short-term deposits (149) 600 (151)
Financing
Proceeds from bank loan - - 250
Repayment of bank loan (499) - (51)
Proceeds from issue of ordinary shares 18 19 48
Capital element of finance lease payments (2) (30) (61)
Proceeds from issue of convertible loan - - 1,000
--------------------------------------------------
Net cash (outflow)/inflow from financing (483) (11) 1,186
--------------------------------------------------
Increase/(decrease) in cash in the period 74 (204) 285
==================================================
Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Increase/(decrease) in cash in the period 74 (204) 285
Movement in short-term deposits 149 (600) 151
Issue of convertible loan (net of issue costs) - - (957)
Repayment on finance leases 2 30 61
Bank loan (net of issue costs) - - (223)
Bank loan repayment 499 - 51
Other non-cash movements (47) (9) (67)
--------------------------------------------------
Movement in net debt 677 (783) (699)
Net debt at beginning of period (1,428) (729) (729)
--------------------------------------------------
Net debt at end of period (751) (1,512) (1,428)
==================================================
Reconciliation of operating profit/(loss) to net cash flow from
operating activities
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Operating profit/(loss) 13 (1,631) (2,203)
Depreciation of tangible fixed assets 126 160 301
Amortisation of goodwill 152 146 294
Decrease in debtors 666 456 58
Increase/(decrease) in creditors
(excluding deferred income) 162 67 (151)
Movement in deferred income (288) 187 1,186
Loss on disposal of fixed assets - - 58
Exchange differences (4) (16) (19)
--------------------------------------------------
Net cash inflow/(outflow) from operating activities 827 (631) (476)
==================================================
Notes to the interim financial statements
1. Exceptional items. The operating exceptional item of #0.31
million included in total operating expenses relates to the
expenses of the restructuring undertaken in 2002 including
redundancy costs, onerous leases and asset write offs.
2. Taxation. A provision has been made for corporation tax for
an overseas subsidiary.
3. Loss per share. Loss per share has been calculated based on
the loss after taxation of #0.09 million (June 2002 - #1.68
million) and the weighted average number of shares of 32,869,135
(June 2002 - 32,322,284). The diluted loss per share is the same
as the basic loss per share since the Group is making losses.
4. Convertible loan. The convertible loan is repayable at par
on 2 January 2004 and is therefore now shown as a current
liability. The loan can be converted into ordinary shares at the
rate of 60p per share.
5. Creditors - amounts falling due within one year. The
largest component of short-term creditors relates to deferred
income, which is a non-cash liability, as shown in the following
analysis:
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Bank loans and finance leases 5 196 315
Convertible loan 986 - -
Trade creditors 379 588 240
Corporation tax 12 - -
Other tax and social security 292 213 418
Other creditors and accruals 827 705 690
Deferred income 4,335 3,815 4,606
---------------------------------------------
6,836 5,517 6,269
=============================================
6. The financial information set out in this interim statement
has been prepared on the basis of the accounting policies set out
in the statutory accounts of StatPro Group plc for the year ended
31 December 2002. This interim statement has not been audited but
has been reviewed by the Company's auditors'
PricewaterhouseCoopers LLP.
The financial information does not constitute statutory
accounts within the meaning of section 240 of the Companies
Act 1985. Statutory accounts for StatPro Group plc for the
year ended 31 December 2002, on which the auditors gave an
unqualified opinion, have been delivered to the Registrar of
Companies.
7. Copies of this statement will be posted to shareholders.
Further copies are available free of charge on request from the
Company Secretary at the Company's registered office, StatPro
House, 81-87 Hartfield Road, London SW19 3TJ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR NKDKDOBKDFFK