RNS Number:0731E
Atlantic Global PLC
19 September 2007
Press Release 19 September 2007
Atlantic Global plc
("Atlantic Global" or "the Company")
Interim Results
Atlantic Global plc, the specialist provider of Project Portfolio Management
(PPM) software applications, today announces its Interim Results for the six
months ended 30 June 2007, which have been prepared in accordance with
International Financial Reporting Standards ("IFRS").
Financial and Operational Summary
* Appointment of Adrian Bradshaw as Non-Executive Chairman with
immediate effect to oversee an active acquisition strategy to
establish critical mass
* Turnover increased by 24% to #1,158,000 (2006: #933,000)
* Profit before taxation of #72,000 (2006: loss #139,000)
* Client engagement model resulted in 37% increase in consultancy
revenue compared to 2006
* Earnings per share of 0.22p (2006: Loss per share 0.42p)
* New PPM software customers include National Assembly for Wales, Oxford
Strategic Marketing, ICE Computer Services, TRL Technology, Syne qua
non and Oxford Pharmaceutical Sciences
* Additional sales to flagship clients including Provident Financial,
Kingston Communications, LDA Design and GroupM (part of WPP Group)
Eugene Blaine, Managing Director of Atlantic Global commented:
"The Company's short term aim was to restore operational stability, revenue
growth and profitability. This has been achieved and is expected to continue.
The Board will actively execute the new acquisition strategy following the
appointment of Adrian Bradshaw as Non-Executive Chairman."
For further information please contact:
Atlantic Global plc
Eugene Blaine, Managing Director Tel: +44 (0) 01274 863 300
eugene.blaine@atlantic-global.com
Rupert Hutton, Finance Director Tel: +44 (0) 01274 863 300
rupert.hutton@atlantic-global.com www.atlantic-global.com
Collins Stewart Europe Limited Tel: +44 (0) 2075238350
Mark Connelly, Director, Corporate Finance
Media enquiries:
Abchurch
Sarah Hollins / Emma Johnson Tel: +44 (0) 20 7398 7700
sarah.hollins@abchurch-group.com www.abchurch-group.com
Chairman's Statement
Introduction
This is the first time that we are reporting our interim financial statements
under International Financial Reporting Standards ('IFRS') as adopted by the EU
("adopted IFRS"), and comparative results for the six month period ended 30 June
2006 have also been restated in accordance with adopted IFRS, as have the full
year results to 31 December 2006. The Company's financial statements for the
year ended 31 December 2007 will be the first annual financial statements that
will be reported under IFRS.
The reported results for the 2007 half year show both a 24% increase in turnover
and a return to profitability, both being a significant improvement on 2006. We
have gained new Project Portfolio Management (PPM) software customers including
National Assembly for Wales, Oxford Strategic Marketing, ICE Computer Services,
TRL Technology, Syne qua non and Oxford Pharmaceutical Sciences. We have
continued to develop successful relationships with our customers as evidenced by
new sales being made to Provident Financial, Kingston Communications, LDA Design
and GroupM (part of WPP Group).
Although the Board has been pleased with the return to profitability and expects
this trend to continue, we believe that the Company would benefit from an
acquisition strategy which significantly increases the size Atlantic Global's
footprint within the software market, offering software products and services to
a similar client range. Accordingly, the Company intends to adopt an active
acquisition policy in order to establish critical mass within this sector.
I assumed the role of Non-Executive Chairman in 2005 with a view to
re-establishing operational stability and profitability. In order to deliver
the new strategy, Adrian Bradshaw will join the board as Non-Executive Chairman
and I will step down with immediate effect to facilitate this. Adrian is a
director of AssetCo PLC and Shieldtech PLC (both of which are listed on the
Alternative Investment Market of the London Stock Exchange ("AIM") and is also a
director of Bradmount Investments who have been instrumental in a number of AIM
listings. Bradmount facilitated the Company's admission to AIM in 2001 and
Adrian has extensive knowledge of the Company and a proven track record in
identifying and completing acquisitions. It is likely that any acquisition will
be substantial relative to the existing market capitalization of the Company.
Financial Review
Atlantic Global has continued to make progress during the first half, reporting
profits before taxation of #72,000, compared to a loss before taxation of
#139,000 in the first six months of 2006. Turnover was up 24% #1,158,000,
compared to #933,000 in the same period of 2006.
The profit has been stated after sales and marketing expenditure of #601,000 for
the period, (2006: #561,000). Our improved client engagement model has resulted
in a 37% increase in service revenue compared to 2006.
The Group has continued to invest consistently in the research and development
of its software products to remain competitive, the expenditure on which
amounted to #184,000 during the period, which has been expensed (2006:
#184,000).
Earnings per share of 0.22p were generated for the six-month period, (2006 loss
per share: 0.42p).
As at 30 June 2007, the Company had a net cash balance of #1,709,000, (2006:
#1,915,000). The cash balance has increased by #109,000 since the group's
financial year end of December 2006. The Company therefore remains financially
secure, and the Directors expect to continue to generate cash in the future.
Dividend
The Directors intend to continue to pursue their progressive dividend policy as
demonstrated over the previous years. As before the Directors believe that any
dividend should be proposed at the end of the financial year.
Current Trading
The Company continued the progress made during 2006 and delivered the expected
revenue growth and return to profitability during the first half of the year.
We expect this to continue during the second half of the year.
Operating Review
Whilst we have experience hosting several customer implementations using our
current technology, the next generation of our software is specifically focussed
on providing a hosted or Software as a Service (SaaS) solution.
We believe that these developments scheduled for release in the first half of
2008 will address many of the issues and challenges faced during our sales cycle
and will also improve the ease with which we implement our products. The new
technology along with multi-lingual and multi-currency support will help expand
our potential market which at present is mainly focussed in the UK.
As stated earlier, we continue to make the necessary operational changes
required to ensure success in the Project Portfolio Management (PPM) market
place but recognize the need to diversify Group operations.
Outlook
The Company's short term aim was to restore operational stability, revenue
growth and profitability. This has been achieved and is expected to continue.
The Board will actively pursue the execution of the new acquisition strategy
referred to earlier in this statement following the appointment of Adrian
Bradshaw as Non-Executive Chairman which takes effect today.
On behalf of the Board, as usual, I would like to mention our staff who have
continued to perform to their usual high standards. I would like to congratulate
them all for their contributions that have enabled the Group to make progress.
Steve Allen
Chairman
18 September 2007
Consolidated Interim Income Statement (unaudited)
for the six months ended 30 June 2007
Six Six Year
(notes) months to months to ended
30 June 30 June 31 December
2007 2006 2006
# 000 # 000 # 000
Continuing Operations
Revenue 1,158 933 1,961
Cost of sales (756) (717) (1,304)
Gross profit 402 216 657
Administration and other (369) (381) (770)
operating expenses
Operating profit/(loss) 33 (165) (113)
Finance income 39 26 62
Profit/(loss) before tax 72 (139) (51)
Income tax (expense) / 3 (21) 42 103
credit
Profit/(loss) for the period 51 (97) 52
attributable to equity
shareholders of the company
Earnings per share
Basic & diluted (pence) 5 0.22p (0.42)p (0.23)p
Consolidated interim balance sheet (unaudited)
as at 30 June 2007
As at As at As at
30 June 30 June 31 December
2007 2006 2006
# 000 # 000 # 000
Assets
Non-current assets
Intangible Assets 2,792 2,792 2,792
Plant and equipment 24 42 31
Deferred tax asset 70 - 91
Total non-current assets 2,886 2,834 2,914
Current assets
Trade and other receivables 799 527 799
Income tax receivable 39 42 39
Cash and cash equivalents 1,709 1,915 1,600
2,547 2,484 2,438
Total assets 5,433 5,318 5,352
Liabilities
Current liabilities
Trade and other payables (533) (643) (515)
Total liabilities (533) (643) (515)
Net assets 4,900 4,675 4,837
Equity
Share capital 1,145 1,145 1,145
Share premium account 1,578 1,578 1,578
Merger reserve 2,538 2,538 2,538
Retained earnings (361) (586) (424)
Total equity attributable to equity 4,900 4,675 4,837
shareholders of the company
Summarised consolidated cash flow statement (unaudited)
for the 6 months ended 30 June 2007
Six months to 30 Six months to 30 Year ended 31
June 2007 June 2006 December 2006
#000 #000 #000
Cash flows from operating activities
Profit (loss) for the period 51 (97) 52
Adjustments for
Share based payment charge 12 19 18
Interest income (39) (26) (62)
Income tax expense / (income) 21 (42) (103)
Depreciation 12 12 26
Operating profit before changes in working 57 (134) (69)
capital and provisions
Change in trade and other receivables - 419 134
Change in trade and other payables 18 76 (63)
Cash generated from the operations 75 361 2
Income tax paid - (11) -
Net cash from operating activities 75 350 2
Cash flows from investing activities
Net interest received 39 26 62
Acquisition of plant and equipment (5) - (3)
Net cash from investing activities 34 26 59
Net increase / (decrease) in cash and cash
equivalents 109 376 61
Cash and cash equivalents at the beginning
of the period 1,600 1,539 1,539
Cash and cash equivalents at the end of
the period 1,709 1,915 1,600
Notes to the interim report
Basis of preparation
1. It is required that the next annual consolidated financial statements of
the Group, for the year ending 31 December 2007, be prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU
("adopted IFRSs").
The interim financial information has been prepared on the basis of the
recognition and measurement requirements of adopted IFRSs as at 30 June 2007
that are effective (or available for early adoption) at 31 December 2007, the
Group's first annual reporting date at which it is required to use adopted
IFRSs. Based on these adopted IFRSs, the directors have applied the accounting
policies, as set out below, which they expect to apply when the first annual
IFRS financial statements are prepared for the year ending 31 December 2007.
However, the adopted IFRSs that will be effective (or available for early
adoption) in the annual financial statements for the year ending 31 December
2007 are still subject to change and to additional interpretations and therefore
cannot be determined with certainty. Accordingly, the accounting policies for
that annual period will be determined finally only when the annual financial
statements are prepared for the year ending 31 December 2007.
The comparative figures for the financial year ended 31 December 2006 are not
the company's statutory accounts for that financial year. Those accounts, which
were prepared under UK GAAP, have been reported on by the company's auditors and
delivered to the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
Conversion to IFRS - Accounting policies
2. The Group's accounting policies remain as stated in the Group's full
annual accounts for the year ended 31 December 2006 with the exception of the
following accounting policies which are now as follows
Research and Development costs
Research costs are expensed as incurred. Development costs are capitalised where
firstly the technical feasibility can be tested against relevant milestones,
secondly the probable revenue stream foreseen over the life of the resulting
product can support the development and thirdly sufficient resources are
available to complete the development. These capitalised costs are amortised on
a straight line basis over the expected life of the associated product.
Goodwill
Goodwill represents the excess of cost of acquisitions over the fair value of
the net identifiable assets acquired. Goodwill is stated at cost less any
accumulated impairment losses. Goodwill is allocated to cash generating units.
Goodwill is tested for impairment annually where there is an indication of
impairment. If impaired, goodwill is written down to its recoverable amount.
3 The impact of the changes in accounting policies is as follows:
Research and Development costs
Previously development costs have been expensed to the profit and loss account
as incurred. Due to the nature of the research and development work undertaken,
and having carried out a review of all research and development costs against
the capitalisation criteria, at this point in time all development costs
continue to be written off as incurred, as not all the criteria are met. The
directors will keep this situation under review should the portfolio of
development projects change. There is therefore no financial impact from this
change in accounting policy.
Goodwill
The intangible asset listed in the company balance sheet related to Goodwill
created at the time of the company's flotation on the AIM market of the London
Stock Exchange in 2001. An amount of goodwill has been written off since that
time at the rate of #181,000 per annum, since it was deemed to have a useful
economic life of 20 years using UK GAAP. In accordance with IFRS 3 "Business
combinations", goodwill has been frozen at its net book value as at 1 January
2006 and will not be amortised. Instead in addition to an impairment test
conducted on transition it will be subject to an annual impairment review with
any impairment losses being recognised immediately in the income statement. No
impairment was identified on transition. The impact of this change in accounting
policy has therefore been a reduction in amortisation expense of #90,500 in the
6 month period under review.
The details of how these changes in accounting policies have affected the
Group's financial position and financial performance are set out in the tables
in note 8.
4 The following exemptions have been taken:
a. IFRS 1 First Time Adoption of International Financial Reporting Standards -
contains certain optional exemptions to assist companies in the transition to
IFRS,
b. IFRS 3 Business Combinations - advantage has been taken of the optional
exception from full retrospective application of IFRS 3 and consequently this
standard has not been applied to acquisitions made before January 2006,
c. IFRS 2 Share based payments - the Group has elected to only apply IFRS 2 to
the options that were granted after 7 November 2002 and had not vested at the
date of transition to IFRS.
5. The Group's cashflows are now disclosed and presented as having occurred
as part of either the Group's operating, investing or financing activities. Cash
and cash equivalents comprise cash balances and bank deposits with a maturity of
3 months or less. Bank overdrafts that are repayable on demand and form part of
the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the cash flow statement.
Tax and EPS
6. The tax charge for the period is based on the anticipated effective tax
rate for the year to 31 December 2007
7. Basic earnings per share are calculated on the profit for the period of
#51,000 (2006: loss of #97,000) and on 22,899,350 ordinary shares, being the
weighted average number of ordinary shares in issue in the period (2006:
22,899,350 ordinary shares). The diluted earnings per share is calculated on the
profit for the period of #51,000 on 22,968,831 ordinary shares, being the
weighted average number of ordinary shares in issue in the period adjusted
earnings per share for the dilutive effect of share options outstanding. Share
options in issue in 2006 did not have a dilutive impact on the loss per share
calculation.
8. Reconciliation of profit and equity
Reconciliation of profits to 30 June Reconciliation of profits to 31 December
2006 2006
Six months Goodwill Restated Twelve Goodwill Restated
to amortisation under IFRS months to amortisation under IFRS 3
30 June adjustment 3 31 December adjustment
2006 2006
#'000 #'000 #'000 #'000 #'000 #'000
Continuing Operations
Revenue 933 - 933 1,961 - 1,961
Cost of Sales (717) - (717) (1,304) - (1,304)
Gross Profit 216 - 216 657 - 657
Administration and other (472) 91 (381) (951) 181 (770)
operating expenses
Operating profit / (loss) (256) 91 (165) (294) 181 (113)
Net Financing income 26 - 26 62 - 62
Profit / (loss) before (230) 91 (139) (232) 181 (51)
tax
Taxation 42 - 42 103 - 103
Profit / (Loss) for the (188) 91 (97) (129) 181 52
period
Reconciliation of equity
Reconciliation of Equity to 30 June Reconciliation of equity to 31 December
2006 2006
As at Goodwill As at As at Goodwill As at
30 June amortisation 30 June 31 December amortisation 31 December
2006 adjustment 2006 2006 adjustment 2006
#'000 #'000 #'000 #'000 #'000 #'000
Non-current assets
Intangible assets 2,701 91 2,792 2,611 181 2,792
Plant and Equipment 42 - 42 31 - 31
Deferred tax asset - - - 91 - 91
Total Non-current assets 2,743 91 2,834 2,733 181 2,914
Current assets
Trade and other 527 - 527 799 - 799
receivables
Taxation receivable 42 - 42 39 - 39
Cash and cash equivalents 1,915 - 1,915 1,600 - 1,600
Total current assets 2,484 - 2,484 2,438 - 2,438
Total assets 5,227 91 5,318 5,171 181 5,352
Current liabilities
Trade and other payables (526) - (526) (397) - (397)
Tax payable (117) - (117) (118) - (118)
Total current liabilities (643) - (643) (515) - (515)
Net assets 4,584 91 4,675 4,656 181 4,837
Equity and other
liabilities
Share capital 1,145 - 1,145 1,145 - 1,145
Share premium account 1,578 - 1,578 1,578 - 1,578
Merger reserve 2,538 - 2,538 2,538 - 2,538
Retained earnings (677) 91 (586) (605) 181 (424)
Total Equity 4,584 91 4,675 4,656 181 4,837
There is no difference between equity at 1 January 2006 under UK GAAP and
adopted IFRS.
9 Reconciliation of movements in equity
6 months ended 30 June 2006 Share Share Merger Profit
Capital premium reserve and loss
account account
Group #'000 #'000 #'000 #'000
Balance brought forward at transition 1,145 1,578 2,538 (494)
Loss for the period - - - (97)
Share option charge recognised - - - 5
At end of period 1,145 1,578 2,538 (586)
12 months ended 31 December 2006 Share Share Merger Profit
Capital premium reserve and loss
account account
Group #'000 #'000 #'000 #'000
Balance brought forward at transition 1,145 1,578 2,538 (494)
Profit for the year - - - 52
Share option charge recognised - - - 18
At end of year 1,145 1,578 2,538 (424)
6 months ended 30 June 2007 Share Share Merger Profit
Capital premium reserve and loss
account account
Group #'000 #'000 #'000 #'000
At start of period 1,145 1,578 2,538 (424)
Profit for the period - - - 51
Share option charge recognised - - - 12
At end of period 1,578 1,578 2,538 (361)
Independent review report to Atlantic Global Plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 which comprises the Consolidated Interim
Income Statement, the Consolidated Interim Balance Sheet, the Summarised
Consolidated Cash Flow Statement, the Statement of Changes in Equity and the
related notes. 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. 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 AIM
Rules which require that the interim report must be presented and prepared in a
form consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
As disclosed in note 1 to the financial information, the next annual financial
statements of the Group will be prepared in accordance with IFRSs as adopted by
the European Union.
The accounting policies that have been adopted in preparing the financial
information are consistent with those that the directors currently intend to use
in the next annual financial statements. There is, however, a possibility that
the directors may determine that some changes to these policies are necessary
when preparing the full annual financial statements for the first time in
accordance with IFRSs as adopted by the European Union.
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 UK. A review consists principally of making enquiries of
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 International Standards on
Auditing (UK and Ireland) 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 2007.
KPMG Audit Plc
Chartered Accountants
1 The Embankment
Neville Street
Leeds
LS1 4DW
18 September 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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