RNS Number:0606B
Access Plus PLC
12 September 2002
ACCESS PLUS PLC
Interim Results for the six months to 30 June 2002
12 September, 2002
Access Plus, the Bristol based provider of print related marketing services,
announces its interim results for the six months to 30 June 2002. This is the
sixth set of interim results since Access Plus was admitted to the Alternative
Investment Market in November 1996.
* TURNOVER down by 1%
* GROSS PROFIT down by 6%
* PROFIT BEFORE TAX* down by 3%
* INTERIM DIVIDEND increased by 4.5%
* EARNINGS PER SHARE* down by 3%
* REPAYMENT OF BANK LOAN completed 3 years ahead of schedule
* before goodwill amortisation
* Commenting on the results, Tim Brettell, Chairman said, "As anticipated in
our recent trading statement, Access Plus is beginning to see the first signs
of a return to growth. Over the six months to June 2002, profits have grown
by over 3%" over the second half of 2001.
* "Comparisons with the same period last year show a flat picture, as the
first half in 2001 had a combination of pre and post downturn revenues."
* "Print Management, our major business area, has shown steady organic
growth of 3% and together with the recent contract wins, further growth is
anticipated in the future. The majority of our top customers are increasing
their spend with Access Plus."
* "This 6 month period has been one of the most successful in terms of
significant new business wins. The impact of this new work will begin to be
felt in the second half of 2002. In addition to these highlights, the Group
continues to enjoy a high level of repetitive work from an extremely stable
and diverse customer base."
* "The Group remains very cash generative and has completed the repayment
of its five year bank loan in under 2 years. The Group will be interest
positive for the remainder of 2002. This will not only enhance our
profitability, but also paves the way for further earnings enhancing
acquisitions or share buy-backs."
For further information contact:
Tim Brettell, Chairman and Chief Executive
Access Plus PLC
0117 933 1000
CHAIRMAN'S STATEMENT
FINANCIAL RESULTS
I am pleased to announce the Company's interim results for the six months ended
30 June 2002. As anticipated in our trading announcement in June 2002, these
results and the new contract wins provide the first signs of a return to growth.
The first six months of last year, however, included a combination of pre and
post downturn revenue and therefore comparisons with the half year to June 2002
show small decreases. The Group reported a 1% drop in turnover to #14.632m
(June 2001 - #14.848m) and a reduction in gross profit to #4.415m (June 2001 -
#4.697m). Before accounting for goodwill amortisation, Group earnings before
interest and tax were #2.211m (June 2001 - #2.313m) and Group profit before tax
was #2.203m (June 2001 - #2.278m). Earnings per share also fell by 3% to 8.21p
per share (June 2001 - 8.50p).
After charging #224,000 for goodwill amortisation, (June 2001 - #240,000), Group
earnings before interest and tax were #1.987m (June 2001 - #2.073m) and profit
before tax was #1.979m, a small fall on last year (June 2001 - #2.038m). Basic
earnings per share reduced marginally from 7.21p at June 2001 to 7.02p at June
2002.
The continuing recovery of the business is evidenced by Group earnings, for the
first half of 2002, before interest and tax, and Group profit before tax (either
before or after charging goodwill amortisation) both increasing by at least 3%,
compared to the second half of 2001.
The Group's cash generation has continued strongly. The five year term loan
taken out in July 2000 was fully repaid by 30 June 2002. Repayment of bank debt
for the six months to 30 June 2002 amounted to #1.5m. In the same period, the
Group also repaid #1.758m of Loan Notes through the use of matching cash
collateral deposits. Net interest paid amounted to only #8,000 (June 2001 -
#35,000) and it is anticipated that the Group will be interest positive over the
rest of the year.
The Directors have declared an interim dividend of 2.875p to be paid on 4
November 2002 to all shareholders on the register at 11 October 2002. This
represents a 4.5% increase over the interim dividend declared in September last
year.
MARKETS
Print Management is currently the most exciting market in which your Company is
operating. The first half of 2002 has seen a material increase in corporate
activity in the print management sector with the purchase of Centurion Press
Limited by communisis plc in May, and more recently the acquisition of Alistair
McIntosh by Williams Lea. This trend towards consolidation within the industry
is not unexpected as there is, at present, considerable fragmentation and
increased size can be beneficial for print management companies bringing
economies of scale and greater purchasing power. 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.
Volumes in Direct Mail showed a modest increase in the first six months of the
year. This market was held back by a flat performance in the Financial mailing
sector which represents 24% of total volumes. Also the Insurance, Media, Retail
and Education sectors showed small declines holding back an otherwise good
performance in other areas. The overall view of your management is that the
market is slowly beginning to improve after the sharp reduction in volumes and
unit costs in March last year.
OVERVIEW OF SERVICES
Within these two markets, the Group categorises the project management services
which it provides under the following three headings:
* Print Management ("PM") (67% of sales for the six months ended 30 June 2002)
* Direct Mail ("DM") (18% of sales)
* Special and Security Products ("SS") (15% of sales)
Once again, our strategy of working closely with our top clients, strengthening
the relationship, and expanding the service offering has been fruitful. Seven
out of our top ten customers have increased their spend during the period. The
increased focus on PM by our sales team continues to win new work - the period
has been one of the most productive for new contract wins, as highlighted by our
trading statement in June which included the following new business wins:
Customer Sector Type of Service Provision PM Date Estimated Period
DM commenced sales per
annum
1. International Life and Full PM and some limited facilities PM April #2 to #3m 3 years
Pensions Group management
2. Global Utilities Group PM across 1000 different product PM May #2 to #3m 3 years
lines
3. Union Complete mailing service; membership DM May #600,000 Rolling
card & pack; with fulfilment and annual
response management
4. Tyre Distribution Group PM with complex logistics across PM March #500,000 Rolling
national branch network annual
5. International Courier Complete PM service PM June #400,000 Rolling
Group annual
Some of these contracts have now begun to have a favourable impact on revenues,
whereas other, more complex ones, are not likely to reach their full potential
until later in the year. This lays the foundations for a return to steady
growth in revenues for the future. Since March this year, the Company has shown
growth in revenues in most months, with the exception of June when, as has been
widely noted elsewhere, productivity in the UK fell heavily as a result of the
extra bank holiday for the Queen's Golden Jubilee and also the distraction of
World Cup.
Looking in more detail at each service area:
PRINT MANAGEMENT
PM sales showed modest growth of 3% to #9.846 (June 2001 - #9.567), and this
rate of growth should accelerate as the new contracts come on stream in the
second half.
DIRECT MAIL
DM sales reduced by 5% to #2.608m (June 2001 - #2.739m). This was not
unexpected, as the beginning of 2001 had two strong months of DM revenues before
the sharp slowdown. The Company has continued to focus on those niche areas
with repeat revenues and the present position reflects a stable platform of
accounts with some signs of increasing activity.
SPECIAL AND SECURITY SERVICES
SS sales fell back to #2.208m (June 2001 - #2.542m). Reductions in SS revenues
do not mean business is being lost as many customers begin with a 'one-off'
innovative print requirement that would be recorded within this category.
Subsequently, once the customer relationship develops well and a full outsourced
solution is being provided, then the business would be recorded under the PM
heading. Consequently, the management are not overly concerned by periodical
fluctuations in income under this category.
STAFF
Your Company's number one asset is its dedicated and loyal staff. As the Group
seeks to counter the effects of last year's sharp downturn in the UK market,
their perseverance and determination is 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 those 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
The Company's increased focus on PM has been very successful with the first half
being one of the best periods in its history for new contract wins. Revenues
from these new wins will begin to build during the second half. Together with
our current high sales activity, this gives the Directors confidence for
continued strong growth in revenues.
Cash generation remains one of the Group's key strengths. The Company's balance
sheet also continues to improve. The Group is, therefore, well placed to make
selective acquisitions in accordance with its strategy and discussions with some
interesting prospects are currently in progress.
T. G. BRETTELL
Chairman & Chief Executive
12 September 2002
GROUP PROFIT AND LOSS ACCOUNT
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Turnover 2 14,632 14,848 29,780
Cost of sales (10,217) (10,151) (20,629)
Gross profit 4,415 4,697 9,151
Administrative expenses (2,428) (2,624) (5,139)
Operating profit 1,987 2,073 4,012
Bank interest receivable 45 94 168
Interest payable (53) (129) (222)
Profit on ordinary activities before taxation 1,979 2,038 3,958
Taxation on profit on ordinary activities 3 (662) (684) (1,217)
Profit on ordinary activities after taxation 1,317 1,354 2,741
Dividends 4 (539) (522) (1,613)
Retained profit for the period 778 832 1,128
Earnings per ordinary share
Basic earnings per ordinary share 5 7.02p 7.21p 14.58p
Diluted earnings per ordinary share 5 6.94p 7.07p 14.31p
Earnings per ordinary share before goodwill
amortisation
Earnings per ordinary share 5 8.21p 8.50p 16.97p
Diluted earnings per ordinary share 5 8.12p 8.32p 16.65p
Goodwill amortisation #0.224m #0.240m #0.448m
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 June 2002
There are no recognised gains or losses other than the profit of #1.317m for the
six months ended 30 June 2002, #1.354m for the six months ended 30 June 2001,
and #2.741m for the year ended 31 December 2001.
GROUP BALANCE SHEET
At At At
30 June 30 June 31 December
2002 2001 2001
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Fixed assets
Intangible assets 6 8,278 9,367 8,512
Tangible assets 1,556 1,885 1,703
9,834 11,252 10,215
Current assets
Stocks 1,195 1,161 1,092
Debtors 7,050 6,634 7,191
Cash 7 356 3,071 2,550
8,601 10,866 10,833
Creditors: amounts falling due within one year 8 (6,557) (8,285) (8,103)
Net current assets 2,044 2,581 2,730
Total assets less current liabilities 11,878 13,833 12,945
Creditors: amounts falling due after more than
one year (27) (2,819) (1,680)
Provision for liabilities and charges
Deferred taxation (38) (33) (37)
Net assets 11,813 10,981 11,228
Capital and reserves
Called up share capital 1,873 1,881 1,881
Share premium account 9,705 9,705 9,705
Capital redemption reserve 1,108 1,100 1,100
Profit and loss account (873) (1,705) (1,458)
Equity shareholders' funds 11,813 10,981 11,228
GROUP STATEMENT OF CASH FLOWS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
(unaudited) (unaudited) (audited)
Notes #000 #000 #000
Net cash inflow from operating activities 9(a) 2,285 1,833 3,692
Returns on investments and servicing of
finance
Interest paid (53) (129) (222)
Interest received 45 94 168
(8) (35) (54)
Taxation (519) (368) (1,574)
Capital expenditure and financial investment
Purchase of tangible fixed assets (79) (114) (130)
Disposal of tangible fixed assets 121 132 91
Deferred consideration paid - - (60)
42 18 (99)
Equity dividends paid (1,091) (1,034) (1,552)
Financing
Issue/(redemption) of share capital net of
costs (194) 99 99
Repayments of bank loan (1,500) (850) (1,350)
Repayments of Loan Notes (1,758) (205) (225)
(3,452) (956) 1,476
Movement in debt in the period (2,743) (542) (1,063)
Reconciliation of net cash flow to movement in
net debt
Movement in cash (2,743) (542) (1,063)
Repayments of Loan Notes 1,758 205 225
Repayments of bank loan 1,500 850 1,350
Change in net debt resulting from cash flows 515 513 512
Non cash flows in net debt - (212) (238)
Movement in net debt 515 301 274
Debt at 1 January (1,060) (1,334) (1,334)
Net debt at end of period 9(b) (545) (1,033) (1,060)
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
2001.
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
The taxation assessed on the profit on ordinary activities for the six months
ended 30 June 2002 is higher than the standard rate of corporation tax in the UK
of 30%. The differences are reconciled as below:
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
#000 #000 #000
Profit on ordinary activities before taxation 1,979 2,038 3,958
Profit on ordinary activities at the standard UK
corporation tax rate of 30% (2001 - 30%) 593 611 1,189
Expenses not deductible (including goodwill
amortisation) 69 73 141
Tax overprovided in previous years - - (117)
Decelerated capital allowances - - 4
Total current tax 662 684 1,217
4. DIVIDENDS
2002 2001 2000
#000 #000 #000
Underprovision in prior year - 4 5
Interim dividend declared/paid 539 518 517
Final dividend - - 1,091
539 522 1,530
The Directors have declared an interim dividend of 2.875p per share (September
2001 - 2.75p per share), payable on 4 November 2002, to shareholders on the
register on 11 October 2002. The final dividend for the year ended 31 December
2001 was 5.85p 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 #1.317m (six months ended 30 June 2001
- #1.354m, year ended 31 December 2001 - #2.741m) by the weighted average number
of ordinary shares in issue in this period of 18,786,424 (six months ended 30
June 2001, 18,770,142, year ended 31 December 2001 - 18,790,803). At 30 June
2002, the issued share capital of the Company was 18,731,193 10p ordinary
shares.
Diluted earnings per share has been based on profit for the period of #1.317m
(six months ended 30 June 2001 - #1.354m; year ended 31 December 2001 -
#2.741m). The weighted average number of dilutive shares has been calculated as
follows:
30 June 30 June 31 December
2002 2001 2001
Basic weighted average number of shares 18,786,424 18,770,142 18,790,803
Dilutive potential ordinary shares from share options 199,183 386,618 355,148
18,985,607 19,156,760 19,145,951
Profit on ordinary activities after taxation of #1.317m (six months ended 30
June 2001 - #1.354m; year ended 31 December 2001 - #2.741m) is shown after
deducting #0.224m (six months ended 30 June 2001 - #0.240m; year ended 31
December 2001 - #0.448m) in respect of goodwill arising on acquisition.
Restated earnings per share has been shown in order to provide a valid
comparison with previous results. The restated earnings have been calculated by
dividing the adjusted profit of #1.541m (six months ended 30 June 2001 -
#1.594m; year ended 31 December 2001 - #3.189m) by the same weighted average
numbers of ordinary shares in issue during the periods ended 30 June 2002 and
2001, and 31 December 2001 respectively. There are no changes to the basis for
calculating the comparative or diluted earnings per share.
6. INTANGIBLE FIXED ASSETS
At 31 December
At 30 June At 30 June 2001
2002 2001 #000
#000 #000
Cost of goodwill
At 1 January 9,915 10,552 10,552
Adjustment to deferred consideration - - (637)
At period end 9,915 10,552 9,915
Amortisation:
At 1 January 1,403 935 935
Provided in relation to Software Stationery 224 240 448
Provided in the period 10 10 20
At period end 1,637 1,185 1,403
Net book value at 1 January 8,512 9,617 9,617
Net book value at period end 8,278 9,367 8,512
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 #0.352m held as collateral for the guarantee of the
Company's Loan Notes.
8. CREDITORS
At 30 June 2002, contingent consideration of #0.750m, previously included within
creditors falling due after more than one year, is now included with creditors
falling due within one year, as this liability is due for settlement on 30 April
2003. The actual liability will not be determined until 31 December 2002.
9. 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
2002 2001 2001
#000 #000 #000
Operating profit 1,987 2,073 4,012
Depreciation 109 40 263
Loss/(profit) on disposal of tangible fixed
assets (4) 5 21
Amortisation of intangible fixed assets 10 10 20
Amortisation of goodwill 224 240 448
Release of government grants (2) (2) (4)
(Increase)/decrease in stocks (103) 202 271
Decrease in debtors 140 917 360
Decrease in creditors (76) (1,652) (1,699)
Net cash inflow from operating activities 2,285 1,833 3,692
b) Analysis of cash
30 June Cash 31 December
2002 flows 2001
#000 #000 #000
Cash at bank 356 (2,194) 2,550
Bank overdrafts (549) (549) -
Bank loans - 1,500 (1,500)
Guaranteed Loan Notes (352) 1,758 (2,110)
Total (545) 515 (1,060)
10. APPROVAL
This report was approved by the Board of Directors on 12 September 2002.
11. DISTRIBUTION
This statement is being sent to all shareholders. In addition, copies are
available from the Company Secretary at the Registered Office.
12. 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 2001. 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, in accordance with current professional
guidance and practice. Their full report will appear in the statement being
sent to all shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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