RNS Number : 3272J
CybIT Holdings PLC
02 December 2008
Date: 2nd December 2008
On behalf of: Cybit Holdings Plc ("Cybit" or "the Company" or "the Group")
Embargoed until: 0700hrs
Cybit Holdings Plc
INTERIM RESULTS
Cybit Holdings Plc (AIM: CYH), the international provider of telematics based products and services for the management and control of
land and sea based assets, today announces its interim results for the six months ended 30th September 2008.
Financial Highlights:
* Revenues have increased by 37% to �12.3m (2007: �9.0m)
* Pre-tax profit has increased 39% to �855,000 (2007: �616,000)
* Funding costs static at 7% of total revenues despite interest rate increases during the period
* Revenue placed on the internal lease book increased to �2.3m (31% of telematics revenues)
Operational Highlights:
* Major new customer wins including Greene King Brewing, Stannah Lift Services, Abel & Cole, Powys County Council and Highways
Agency
* Exclusive contract with Ford Motor Company in UK to provide a fully managed aftermarket service branded 'Ford Fleet Telematics'
* Cybit now supports nearly 50,000 mobile assets for approaching 2,000 customers
* BlueFinger awarded contract from UK DEFRA as a potential precursor to a number of similar contracts around Europe
* Acquisition of assets relating to OxLoc Limited in August 2008
Commenting on the results Richard Horsman, Chief Executive of Cybit, said:
"Even in these turbulent markets, Cybit has achieved another period of substantial organic and acquisitive growth in both revenue and
profit. We continue to deliver against our stated strategy of building a profitable, multi-faceted, international telematics business.
"The organic growth shown by the Company during the period is a strong indication that businesses believe our fleet management solutions
can help reduce costs and increase efficiencies, making this a cost-effective investment in these tough economic conditions.
"We remain confident in relation to future prospects and will continue to build our position within the significant market opportunity
available to us."
For further information please contact:
Cybit Holdings Plc Redleaf Communications Cenkos Securities Plc
Richard Horsman, Chief Emma Kane/Samantha Robbins/ Stephen Keys
Executive
Kevin Lawrence, Finance Rebecca Sanders-Hewett Elizabeth Bowman
Director
Tel: +44 (0)1480 455489 Tel: +44 (0)20 7566 6700 Tel: +44 (0)20 7397 1930
Email: Cybit@redleafpr.com
Notes to Editors:
* Cybit operates within three core sectors: Vehicle Telematics Solutions; Maritime Solutions; and Private Mobile Radio (PMR) based
tracking and precise positioning solutions. Its products and services enable companies to monitor and position mobile assets, manage service
level agreements, enhance employee duty of care and comply with legislation.
* In the Vehicle Telematics sector, Cybit is one of Europe's leading Telematics Service Providers (TSPs). Approximately 2,000
business-to-business clients use its fleet and asset management solutions to manage in the region of 50,000 mobile assets. Solutions include
in-vehicle technologies, workflow management and internet-based monitoring and reporting software. The Company also provides consulting
services to advise on legal issues such as duty of care and working hours.
* Cybit's Maritime Solutions business, BlueFinger, is recognised as one of the world's leading suppliers of Fisheries Vessel
Monitoring Systems. Bluefinger provides the fisheries authority with the necessary tools for managing their licensed fishing fleets and
coordinating the activity of the fisheries patrol vessels that enforce national fisheries policy throughout the EEZ. BlueFinger's
Saffire-Online system is ideal for race organisers to track the position, direction and speed of each yacht and vessel in ocean going or
inshore races.
* Its PMR business, Cybit Positioning Solutions, provides asset-tracking and security solutions for both maritime and land-based
applications including exploration and mining. Its precise positioning solutions assist in the location and exploitation of oil, gas and
mineral reserves around the globe.
CHAIRMAN'S STATEMENT
This has been yet another exceptional period of growth for Cybit. Despite a background of economic and financial turmoil, the Company
has generated substantial increases in both revenue and profit during the period. It is pleasing to note that 12% of period on period growth
has been achieved organically with the balance coming from acquisitions. With the acquisition of Truck24 at the end of the last financial
year and OxLoc in the last six months, we continue to deliver against our stated strategy of building a profitable, multi-faceted,
international Telematics business.
Group performance has once again been very strong. We have integrated additional acquisitions, increased revenue and profit performance
whilst at the same time maintaining a healthy cash position. The Board firmly believes that Cybit is well placed to deliver continued growth
for the foreseeable future.
Operational Review
In the vehicle telematics sector, Cybit now supports nearly 50,000 mobile assets for approaching 2,000 customers. Major new customer
wins during the first half have included Greene King Brewing and Retailing Ltd, Stannah Lift Services, Abel & Cole, Powys County Council and
Highways Agency. Revenues from repeat business and renewals are growing with significant business being generated from existing customers
including SIG plc, May Gurney, Sainsbury's online groceries, NIE Powerteam and Interserve.
Vehicle telematics order intake, excluding Truck24, showed 25% growth over the first half of last year. This leads us to believe that
many companies do recognise that tough trading conditions require investment in proven solutions such as Cybit's to reduce costs and
increase efficiencies.
Cost and cash management continue to remain an absolute priority. We have an ongoing programme of work designed to implement operational
efficiencies and process improvements within the business.
As an example, a project is underway to consolidate all Group back office operations into our core Enterprise Resource Planning (ERP)
software backbone. There are substantial savings that can be made from the rationalisation of billing and Customer Relationship Management
(CRM) platforms across the Group. We have recently completed a similar project to standardise all of our back-office accounting applications
with cost savings already achieved during the period.
Financial Performance
Revenue in the first half has grown by 15% over the second half of last year. Compared to the equivalent period in 2007, revenues have
jumped by 37% from �9.0m to �12.3m. Pre-tax profit has increased significantly to �855,000 (2007: �616,000). It is worth noting that
funding costs have remained static at 7% of total revenues despite significant increases in funding rates during the period.
Gross cash, excluding bank overdrafts, increased from �2.9m at 31st March to �3.0m at 30th September. Cash balances, including
overdrafts, remained virtually unchanged at �2.3m at September. Net cash, after all group bank borrowings, decreased from �1.6m to �0.6m as
a result of investment in acquisitions, own book and capital investment.
Investment in the internal lease book increased from �1.0m in the first half of last year to �2.2m (21% to 31%) on a like for like basis
i.e. as a percentage of total vehicle telematics deals financed. This increase is in part due to mitigation of increased funding costs
coupled with more challenging lending criteria in the SME sector.
Operational Performance
As we have previously reported, the provision of telematics and online services incorporates three sectors; Vehicle Telematics, Maritime
Solutions and Private Mobile Radio based tracking and precise positioning. Order intake from our precise positioning and maritime businesses
is in-line with management expectations at just over �2.1m. Cybit Positioning Solutions has again performed well with strong revenue and
order performance as many of our key customers in this sector continue to strengthen their order books.
Our BlueFinger Maritime business delivered a good revenue performance in the period. In the second half of the period, order performance
is expected to strengthen as a number of key contracts are due to conclude at this time. In the first half, following on from our Volvo
Ocean Race contract, the team won the prestigious P1 Powerboat Race Management contract.
Perhaps more significantly, BlueFinger also won a contract from UK DEFRA to provide a catch management and reporting solution, which is
the precursor to a number of similar contracts expected to be tendered around Europe in the next few years. This puts the Company in a
strong strategic position as we will be bidding standard commercially available software.
Technology
During the period, we relocated our flagship Fleetstar-Online Telematics application to an off-site hosting centre. The platform has
been scaled to support growth beyond 100,000 vehicles and currently processes around 10 million live positions on an average day.
We have introduced a new monthly Development Management Cycle (DMC) which allows us to combine long term strategic developments with
short cycle customer and market driven enhancements. The first of these releases was made in October with a second release in November.
Further updates are scheduled for December and the fourth quarter.
Over the coming months, we intend to focus on the consolidation of our current vehicle telematics platforms in order to reduce operating
costs and streamline internal support processes. We have already identified significant savings opportunities and will be assessing the
likely timescales associated with achievement of these benefits.
During September, we launched the Truck24 solution in the UK under the Fleetstar-Logistics brand. This product has received a
significant level of interest and we have already signed the first customer contract.
Indirect Channels
During the period, our indirect channel partners added 73 new customers. This represents circa 10% order value growth over the same
period last year but is slightly below management expectations for this area of the business. We believe that the SME sector has been
affected by the current economic climate to some extent. However, it was encouraging to note that a significant number of our reseller
customers purchased additional units, which confirms they believe that they are receiving a return on their investment.
We do believe that this is a temporary slowing of growth and are implementing a number of initiatives to recruit new resellers. We are
also providing additional support around helping the end customer to recognise the rapid return on investment potential that is available
from installing our technology into their fleet.
In June, the Company announced an exclusive partnership agreement with Ford Motor Company in the UK, to provide a fully managed
aftermarket service branded 'Ford Fleet Telematics' targeted at Ford Fleet customers. This service is to be launched in December.
Under the terms of the agreement, Cybit has exclusive telematics access to Ford's confidential CanBus coding information, which allows
details relating to vehicle usage and performance to be reported through the Cybit Fleetstar-Online application. The partnership initially
includes access to CanBus systems on the current Ford Transit and Transit Connect models. This collaborative access to CanBus enables Ford
Fleet customers to have confidence in the accuracy of data contained within reports.
OxLoc
In August, for a nominal cash consideration, we acquired the trade and assets of OxLoc Limited, an Oxford based supplier of
battery-powered tracking units for HGV trailers, plant and mobile assets.
OxLoc provided asset monitoring, tracking and alerting solutions to the sector of the mobile asset management market where there is either
non existent or limited access to a power source, through the supply of autonomous battery-powered data collection products. The company
was originally founded by Isis Innovation Ltd, the technology transfer company of the University of Oxford.
The purchase covered all hardware, software and intellectual property and provides Cybit with non-powered tracking devices that will become
highly integrated with Cybit's leading Fleetstar-Online telematics and fleet-tracking solution. This will include built-in RFID technology
for temperature, pallet and goods-in-transit monitoring.
Cybit is looking to integrate the OxLoc products into the current product range and will continue to run and expand the service that is
already installed with customers and partners such as Fowler Welch and Balfour Beatty. This process will be relatively easy as Cybit has
already incorporated the OxLoc product into its AssetLocator platform and have a number of customers using the solution for non-powered
assets.
International Operations
Truck24
The acquisition of Truck24, completed at the end of the last financial year, has given us a substantial platform from which to launch
further regional organic and acquisitive growth. We currently have more than 3,300 vehicles across 200 customers in Germany, Austria, Italy
and Switzerland with good growth prospects in all markets.
The integration process is now complete with the creation of a pan-European support function covering both Sweden and Germany. The
logistics and configuration process has been outsourced on the same basis as the UK. The net result of these changes has been a significant
level of operational saving achieved during the second quarter. The business also benefited from Cybit Group supply contracts in a number of
areas which have reduced operating costs associated with the existing installed base. The combined effect of these savings resulted in
Truck24 being broadly break even during the first half of the year.
As part of the restructuring process the Truck24 CEO has moved on with a highly experienced replacement Country Sales Manager joining
the business during October.
In terms of outlook, the change in management structure has given the team renewed focus and confidence in the business. In October
alone, the business achieved record order intake in excess of EUR700k.
Cybit AB
In the first six months of the year, we have seen a significant upturn in sales of Fleetstar-Online into the Swedish market.
Significant contracts have been signed with Flygfrakt, the largest freight forwarder in Sweden, and Fujitsu. We have also renewed a number
of our early Fleetstar-Online customers.
In the latter part of the period, we launched the Truck24 logistics and distribution solution into Sweden. A number of pilot
installations are already underway with positive initial feedback from customers using the solution.
As a result of this increased interest in fleet and asset management solutions and a decline in our car sharing business, we have
decided to retire the Drive-IT solution by the end of the current financial year.
During the period, we have increased our local team to eight with a view to driving additional local and regional growth.
Cybit Middle East
Having a local presence in Dubai is helping us to form closer relationships with a number of our oil and gas exploration clients. This
has already led to us receiving orders for our TDMA precise positioning technology for local deployment in the field. Perhaps more
significantly, through one of our regional agents, we have won a pilot coastal security project using the same UHF and VHF TDMA technology
which could lead to a significant future deployment.
Our Dubai based Vehicle Telematics partner has won an initial pilot project which will involve a satellite-based tracking and
communication deployment into Iran. This group has significant experience and reach into the region which we believe could lead to
significant repeat order potential for our solutions.
Although it is still early days for us, we firmly believe that the Middle East represents a significant long term growth opportunity for
Cybit and we will continue to explore potential opportunities and partnerships in this marketplace.
Future Prospects
In terms of organic growth, current market conditions will undoubtedly have had an impact on our customers to varying degrees, however,
we strongly believe that any well run business will be looking for ways to both manage productivity and reduce costs in a tough market.
Further to this, we believe that customers making investment decisions will be carrying out far more due diligence on the financial strength
of any potential partner. Accordingly, as one of the recognised European leaders with a strong balance sheet and track record of delivering
tangible return on investment, Cybit is well placed to enhance our position in this challenging market.
The Company also benefits from diversity in business and geographic spread which should allow us to demonstrate "counter cyclical"
growth in an economic downturn.
In terms of acquisitive growth, we are seeing a number of smaller competitors suffering both from a reduction in orders and an inability
to raise funds to support business growth. If current market conditions prevail in the medium term, the Board believes that this could
present the Company with further growth opportunities.
In summary, business levels across the Group remain strong and the Board is looking forward to delivering continued growth in the second
half.
Neil Johnson
Chairman
2nd December 2008
Consolidated interim income statement
For the six months ended 30
September 2008
Six months Six months Year ended
30 September 2008 30 September 2007 31 March
(unaudited) (unaudited) 2008
(audited)
Notes � � �
Sales revenue 3 12,305,835 9,007,456 19,671,179
Cost of sales (5,050,944) (3,466,899) (7,301,291)
Gross profit 7,254,891 5,540,557 12,369,888
Administrative expenses
Other operating expenses (4,966,325) (3,831,471) (8,125,373)
Depreciation and (552,134) (477,945) (981,212)
amortisation
Total administrative expenses (5,518,459) (4,309,416) (9,106,585)
Operating result 1,736,432 1,231,141 3,263,303
Finance income 78,043 8,038 38,360
Finance expense (959,280) (623,295) (1,606,827)
Result for the period before 855,195 615,884 1,694,836
taxation
Tax expense, net (246,781) (184,756) (627,561)
Net result for the period 608,414 431,128 1,067,275
Attributable to shareholders 608,414 431,128 1,067,275
of Cybit Holdings Plc
Earnings per share (pence) 5
Basic 2.22p 1.94p 4.65p
Diluted 2.21p 1.90p 4.61p
Consolidated interim balance
sheet
30 September 2008
30 September 30 September 2007 31 March 2008 (audited)
2008 (unaudited) (unaudited)
� � �
ASSETS
Non-current assets
Goodwill 4,945,604 2,873,265 5,138,890
Other intangible assets 4,638,770 2,501,476 4,377,714
Property, plant and equipment 560,730 752,953 473,328
Deferred tax assets 401,122 528,416 609,799
Other non-current assets 115,387 466,923 131,410
10,661,613 7,123,033 10,731,141
Current assets
Inventories 1,511,343 1,813,808 1,420,696
Trade and other receivables 7,834,735 7,094,709 8,004,116
Cash and cash equivalents 2,974,752 3,295,512 2,853,984
Total 12,320,830 12,204,029 12,278,796
TOTAL ASSETS 22,982,443 19,327,062 23,009,937
LIABILITIES
Current liabilities
Trade and other payables 4,097,208 3,345,135 3,964,270
Short term borrowings 1,083,277 653,780 598,192
Current tax payable 36,069 509,316 527,131
Finance leases 28,348 46,502 16,374
Other payables 553,564 866,486 953,233
Deferred consideration payable 135,000 250,000 1,012,102
Accruals and deferred income 1,863,524 1,298,320 1,739,801
7,796,990 6,969,539 8,811,103
Non- current liabilities
Long-term borrowings 1,326,528 729,561 656,914
Finance leases 49,085 - -
Deferred tax 393,774 459,146 426,458
Deferred income 705,315 1,789,958 894,335
Deferred consideration payable - - 100,000
TOTAL LIABILITIES 10,271,692 9,948,204 10,888,810
NET ASSETS 12,710,751 9,378,858 12,121,127
EQUITY
Share capital 7,425,488 7,213,618 7,425,488
Share premium account 7,591,607 7,250,224 7,591,607
Merger reserve (1,141,368) (2,716,568) (1,141,368)
Equity reserve 194,374 238,571 194,374
Foreign exchange reserve (29,656) (32,732) (10,866)
Retained earnings (1,329,694) (2,574,255) (1,938,108)
TOTAL EQUITY 12,710,751 9,378,858 12,121,127
Consolidated interim statement of changes in equity
30 September 2008
Equity attributable to equity holders of Cybit Holdings Plc:
Share capital Share premium account Foreign exchange reserve Merger reserve
Equity reserve Retained earnings Total equity
� � � �
� � �
Balance at 31 March 2007 7,150,882 7,098,214 (301) (3,168,708)
288,172 (3,005,383) 8,362,876
Shares issued on acquisition of Amatics Limited 48,100 - - 452,140
- - 500,240
Shares issued on exercise of warrants 14,636 97,564 - -
- - 112,200
Transfer between reserves on exercise of warrants - 54,446 - -
(54,446) - -
Increase in equity reserve in relation to options issued - - - -
4,845 - 4,845
Foreign exchange adjustments - - (32,431) -
- - (32,431)
Profit for the six month period - - - -
- 431,128 431,128
Balance at 30 September 2007 7,213,618 7,250,224 (32,732) (2,716,568)
238,571 (2,574,255) 9,378,858
Shares issued on acquisition of Truck24 AG 179,000 - - 1,575,200
- - 1,754,200
Warrants issued on acquisition of Truck24 AG - - - -
82,923 - 82,923
Shares issued on exercise of warrants 32,870 219,108 - -
- - 251,978
Transfer between reserves on exercise of warrants - 122,275 - -
(122,275) - -
Foreign exchange adjustments - - 21,866 -
- - 21,866
Increase in equity reserve in relation to options issued - - - -
(4,845) - (4,845)
Profit for the six month period - - - -
- 636,147 636,147
Balance at 31 March 2008 7,425,488 7,591,607 (10,866) (1,141,368)
194,374 (1,938,108) 12,121,127
Foreign exchange adjustments - - (18,790) -
- - (18,790)
Profit for the six month period - - - -
- 608,414 608,414
Balance at 30 September 2008 7,425,488 7,591,607 (29,656) (1,141,368)
194,374 (1,329,694) 12,710,751
Consolidated interim cash flow
statement
For the six months ended 30
September 2008
Six months Six months 30 Year ended 31 March
30 September 2008 September 2007 2008
(unaudited) (unaudited) (audited)
� � �
Operating activities
Results for the period after 608,414 431,128 1,067,275
tax
Adjustments for:
Depreciation and amortisation 552,134 477,945 981,212
Loss on sale of property, - - 1,919
plant and equipment
Working capital changes (253,477) 529,462 (183,089)
Finance costs 881,237 615,257 1,568,467
Taxation expense recognised in 246,781 184,756 627,561
the income statement
Employee equity settled share - 4,845 -
options
Cash generated from operations 2,035,089 2,243,393 4,063,345
Corporation tax paid (346,638) - (28,754)
Financing costs of assigning (882,328) (596,943) (1,529,642)
debts to finance companies
Net cash from operating 806,123 1,646,450 2,504,949
activities
Investing activities
Purchase of subsidiary (999,031) (4,017,330) (4,783,421)
undertakings
Net cash acquired with - 3,317,707 3,457,996
subsidiaries
Purchase of property, plant (198,283) (79,690) (149,457)
and equipment
Purchase of other intangibles (705,468) (176,516) (859,393)
Proceeds from sale of - 3,019 1,222
property, plant and equipment
Interest received 78,043 4,728 38,360
Net cash used in investing (1,824,739) (948,082) (2,294,693)
activities
Financing activities
Interest paid (76,952) (23,042) (77,185)
Proceeds from share issues - 112,200 364,178
Receipts from borrowings 1,039,503 500,000 500,000
Receipts from short term - 3,250,000 3,250,000
borrowings
Repayment of short term - (3,250,000) (3,250,000)
borrowings
Finance lease repayments (17,957) (56,673) (86,801)
Repayment of loans (64,061) (79,041) (221,875)
Net cash generated from 880,533 453,444 478,317
financing activities
Net changes in cash and cash (138,083) 1,151,812 688,573
equivalents
Exchange differences (672) - (388)
Net cash and cash equivalents, 2,425,689 1,737,504 1,737,504
beginning of period
Net cash and cash equivalents, 2,286,934 2,889,316 2,425,689
end of period
Selected explanatory notes
1. Nature of operations and general information
Cybit Holdings plc, a public limited company, is the Group's ultimate parent company. It is registered in England & Wales. The address
of Cybit Holdings plc's registered office, which is also its principal place of business, is Cybit House, Kingfisher Way, Hinchingbrooke
Business Park, Huntingdon, Cambridgeshire PE29 6FN.
Cybit Holdings plc's shares are listed on the London Stock Exchange's Alternative Investment Market (AIM). Cybit Holdings plc's
consolidated full year financial statements are presented in British Pounds (�), which is also the functional currency of the ultimate
parent company.
2. Accounting policies and basis of preparation
These consolidated interim financial statements have been prepared in accordance with the accounting policies expected to be followed
for the year ending 31 March 2009. These policies are consistent with those of the annual financial statements for the year ended 31 March
2008 which are based on the recognition and measurement principle of International Financial Reporting Standards (IFRS) as adopted by the
European Union. The financial statements have been prepared under the historical cost convention. The impact of showing items at fair value,
such as share options, is not material.
3. Segment Analysis
The Group has one principal activity and makes sales to a variety of global destinations. An analysis of sales revenue by geographical
market is given below:
Six months 30 Six months 30 Year ended 31 March
September 2008 September 2007 2008 (audited)
(unaudited) (unaudited)
� � �
United Kingdom 9,226,524 8,312,596 17,467,941
Rest of Europe 2,604,540 298,880 1,475,901
Africa 269,570 193,470 346,259
Middle East 194,341 25,640 359,935
Rest of world 10,860 176,870 21,143
12,305,835 9,007,456 19,671,179
4. Share issues
There were no issues of shares during the period under review.
5. Earnings Per Share
The calculation of the basic earnings per share is based on the profits attributable to the shareholders of the Group divided by the
weighted average number of shares in issue during the period. All earnings per share calculations relate to continuing operations of the
Group.
Profits attributable Weighted average Basic earnings per share amount in
to shareholders number of shares pence
Six months ended 30 September 608,414 27,451,768 2.22p
2008
Six months ended 30 September 431,128 22,278,925 1.94p
2007
Year ended 31 March 2008 1,067,275 22,943,055 4.65p
The calculation of the diluted earnings per share is based on the profits attributable to the shareholders of the Company divided by the
weighted average number of shares in issue during the period, as adjusted for dilutive share options. All earnings per share calculations
relate to continuing operations of the Group.
Dilutive options Diluted earnings per share amount in pence
Six months ended 30 September 105,385 2.21p
2008
Six months ended 30 September 409,597 1.90p
2007
Year ended 31 March 2008 199,796 4.61p
6. Financial Statements
The interim financial information included in this report does not constitute statutory accounts for the purposes of section 240 of the
Companies Act 1985. The full accounts for the year ended 31 March 2008 which were prepared under IFRS and which received an unqualified
report from the auditors, and did not contain a statement under s237(2) or (3) of the Companies Act 1985, have been filed with the Registrar
of Companies. Comparative figures for the period ended 30 September 2007 contained within this report were published in a press release on 3
December 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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