TIDMDSG
RNS Number : 3311D
Dillistone Group PLC
26 April 2017
26 April 2017
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Final Results
Dillistone Group Plc, the AIM quoted supplier of recruitment
software for the international recruitment industry through its
Dillistone Systems and Voyager Software divisions, is pleased to
announce its audited final results for the 12 months ended 31
December 2016.
Highlights for the year:
-- Revenues up 6% from 2015 to GBP9.963m
-- Record level of recurring revenues of GBP7.027m, up 6% from 2015
-- Recurring revenues, representing 71% of Group revenue, cover
approximately all of administrative expenses before acquisition
related and one-off costs
-- Adjusted operating profit for the year up 3% to GBP1.463m
-- Profit after tax for the year is GBP0.526m after a pre-tax
one-off amortisation adjustment of GBP0.720m.
-- Adjusted basic EPS fell slightly to 7.10p (2015: 7.26p)
-- Basic EPS fell to 2.68p (2015: 6.20p) reflecting the amortisation adjustment
-- Final dividend of 2.8p per share recommended (2015: 2.75p)
-- Net cash funds of GBP1.379m (2015: GBP1.270m)
-- Dillistone Systems division reports strong turnaround in new
business wins with over 100 new client firms signing up in period
with a total contract value of over GBP1.000m. Revenue up 5% to
GBP4.858m
-- Voyager Software division saw an 18% increase in new business
wins in 2016; launched ISV Online, and the first of a suite of
mobile apps. Revenues grew 6% to GBP5.105m
Commenting on the results and prospects, Mike Love,
Non-Executive Chairman, said:
"Product development continues to be a priority with a number of
upgrades and new product launches successfully achieved in 2016.
The year delivered a record level of revenues, and equally
importantly, recurring revenues.
"Overall, despite what we consider to be short term economic
turbulence, the Group believes that it is in a strong position in
its core markets and is confident of future progress. As a result,
we are delighted to propose an increase in our final dividend of
1.8% to 2.8p."
Definitions:
(1) Adjusted operating profit is statutory operating profit
before acquisition costs, related intangible amortisation,
movements in contingent consideration and other one-off costs. See
note 4
(2) Adjusted EBITDA is adjusted operating profit with
depreciation and amortisation added back.
(3) Net cash funds are cash and cash equivalents held less bank
borrowings
(4.) Adjusted basic EPS is computed from statutory profits after
tax adjusted to exclude the post-tax effect of acquisition costs,
related intangible amortisation, movements in contingent
consideration and other one-off costs
Results Webinar - Jason Starr, Chief Executive, and Julie
Pomeroy, Finance Director, will be hosting a webinar to review the
results at 3.00pm today. To register please visit
https://attendee.gotowebinar.com/register/1261206189971767042 or
contact Tom Cooper on tom.cooper@walbrookpr.com or 0797 122
1972.
Annual Report and Accounts - The final results announcement can
be downloaded from the Company's website (www.dillistonegroup.com).
Copies of the Annual Report and Accounts (in addition to the notice
of the Annual General Meeting) will be sent to shareholders by 16
May 2017 for approval at the Annual General Meeting to be held on 7
June 2017.
Enquiries:
Dillistone Group
Plc
Mike Love Chairman 020 7749 6100
Jason Starr Chief Executive 020 7749 6100
Julie Pomeroy Finance Director 020 7749 6100
WH Ireland Limited (Nominated
adviser)
Head of Corporate
Chris Fielding Finance 020 7220 1650
Walbrook PR
Tom Cooper /
Paul Vann 020 7933 8780
0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in
the supply and support of software and services to the recruitment
industry. It has four trading businesses operating through two
divisions: Dillistone Systems, which targets the executive search
industry (www.dillistone.com); and Voyager Software, which targets
other recruitment markets (www.voyagersoftware.com).
Dillistone has made three acquisitions: Voyager Software in
September 2011, FCP Internet in July 2013 and ISV Software in
September 2014. The Group operates under the FileFinder, Infinity,
Evolve and ISV brands.
Dillistone was admitted to AIM, a market operated by the London
Stock Exchange plc, in June 2006. The Group employs over 100 people
globally with offices in London (head office) Basingstoke and
Southampton, Frankfurt, New Jersey and Sydney.
Chairman's statement
Product development continues to be a priority with a number of
upgrades and new product launches successfully achieved in 2016.
The Group delivered its best ever revenue performance with revenue
up 6% to GBP9.963m. This performance was impacted by the Brexit
vote in the UK, which reduced demand in our home markets while
weakening Sterling and, therefore, increasing the value of our
overseas sales.
Underlying profit before tax, acquisition costs and one-off
adjustments rose 3% to GBP1.458m. As mentioned in our pre close
statement, the Group has undertaken a review of its accounting
judgements in respect of the amortisation of platform development
costs and subsequently decided to write these costs off over a
period of five years, rather than a period of five to ten years,
resulting in a one-off adjustment of GBP0.720m. Accordingly,
operating profit fell to GBP0.412m with reported profit after tax
falling to GBP0.526m. This is a non-cash accounting adjustment and
brings our accounting treatment into line with industry practice.
The resulting basic EPS for the period was 2.68p.
Dividends
The Board was pleased to increase the interim dividend payment
in September 2016 to 1.375p per share (2015: 1.35p) and has
recommended an increased final dividend of 2.8p per share (2015:
2.75p), subject to shareholder approval, payable on 27 June 2017 to
holders on the register on 2 June 2017. Shares will trade ex
dividend from 1 June 2017. This takes the total dividend based on
the 2016 results to 4.175p (2015: 4.10p), and gives a yield of 4.9%
on a share price of 84.5p.
This represents our fifth successive year on year increase in
the dividend, in line with our policy of progressing dividend
payments, subject to the cash needs of the business. The business
is committed to maintaining its policy of investing in its products
and services whilst rewarding its shareholders.
Staff
Our staff are fundamental to our success. It is through their
efforts, commitment and determination that we continue to be a
leading technology provider in the sectors we serve. On behalf of
the Board I would like to take this opportunity to thank all of our
staff.
Outlook
We are pleased to note that total revenue in Q1 2017 is ahead of
the same period in 2016 despite turbulent markets for many of our
recruitment clients.
Although the Group derives revenue from clients around the
Globe, 72% of our revenues in 2016 were derived from the UK
recruitment market and the decision of the UK to "Brexit", taken in
June 2016, has had an impact on this sector. In turn, this has
impacted our new business sales: while incoming orders in the first
quarter of 2016 benefited from a confident UK economy, this has not
been the case in the second half of 2016 and the first quarter of
2017.
While new business orders may have been impacted by economic
turbulence, our recurring revenue base has reached record levels.
This is true for both of our divisions and these long term
recurring revenues are expected to cover the majority of our
administrative costs and thereby giving us confidence in the future
of the Group.
Furthermore, we are anticipating an improvement in orders in the
latter months of 2017 and the early part of 2018 as the incoming
General Data Protection Regulation ("GDPR") rules, which come into
effect on 25 May 2018 and which will require recruitment firms to
take steps in the run up, are likely to have a significant impact
on the recruitment technology space. We believe that this impact
will be positive for the Group.
Technological innovation is key to our long term success. In
addition to the ongoing development of our existing product range,
the Group is investing in the creation of an exciting new product.
While development of this product has begun, it will not generate
significant revenue prior to 2018, and although the majority of
development costs are expected to be capitalised other costs will
be expensed in 2017. Despite the increased expenditure, we believe
that this product will have a significant positive impact in the
future. We are currently appraising debt funding arrangements for
the completion and launch of this new product.
Overall, despite what we consider to be short term economic
turbulence, the Group believes that it is in a strong position in
its core markets and is confident of future progress. As a result,
we are delighted to propose an increase in our final dividend of
1.8% to 2.8p (2015: 2.75p).
Dr Mike Love
Non-Executive Chairman
CEO's Review
Dillistone Group Plc is a global leader in the supply of
technology solutions and services to the recruitment sector
worldwide.
Strategy and objectives
The Group's strategy is to grow the business both organically
and through acquisition. This strategy is made possible through our
commitment to product development, which ensures that the business
continues to command a leading role in all of the markets in which
it operates.
Our acquisition strategy typically entails consideration of
businesses offering:
-- products that would further increase market share in the Group's core markets;
-- legacy applications, where clients could be transferred to our modern suite of products; or
-- complementary applications, which may be cross-sold to clients of the Group.
The Group's objectives are principally to:
-- ensure our products meet the needs of the recruitment sector
through continual investment and development;
-- be a leading player in all of the markets we serve;
-- develop our staff delivering progressive career development;
-- increase our profitability and deliver increased shareholder
value year on year in conjunction with a progressive dividend
policy.
Key Performance Indicators (KPIs)
The Board and management use absolute figures to monitor the
performance of the business using the following financial KPIs:
FY FY measure used Met
2015 2016 by management /Not
GBP000 GBP000 met
----------------- ------------ ------------ ---------------- ------
year on year
Total revenues 9,437 9,963 growth met
------------------ ------------ ------------ ---------------- ------
Recurring year on year
revenues 6,606 7,027 growth met
------------------ ------------ ------------ ---------------- ------
Non recurring year on year
revenues 2,333 2,370 growth met
------------------ ------------ ------------ ---------------- ------
Adjusted
profit before year on year
tax 1,416 1,458 growth met
------------------ ------------ ------------ ---------------- ------
sufficient
Cash less cash resources
borrowings 1,270 1,379 maintained met
------------------ ------------ ------------ ---------------- ------
Adjusted profit before tax is statutory profit before
acquisition costs, related intangible amortisation, movements in
contingent consideration and other one-off costs. See note 4 and
note 7
In addition, the Board monitors order levels and employee
numbers as well as performance against budget.
Our business model
The business is split into two divisions, Dillistone Systems and
Voyager Software. Dillistone Systems specialises in the supply of
software and services into executive-level recruitment teams.
Voyager Software's clientele are primarily involved in contingent
recruitment, including permanent placement, contract placement and
the provision of temporary staff. Across our subsidiaries, we work
with over 2,000 firms in approximately 60 countries.
The majority of our products are delivered through one or more
of the following:
1. an upfront licence fee plus a recurring support fee;
2. Software as a Service (SaaS) subscription basis; or
3. a hybrid model incorporating an upfront payment and recurring support and Cloud hosting fees.
There is a continuing move towards our Cloud delivery
services.
The business operates out of four countries: the UK, Germany,
the US and Australia. As well as supplying and supporting our
software we also host the software for a proportion of our clients.
This is done through data centres in Europe, the Americas,
Singapore and Australia.
Group review of the business
2016 saw recurring revenues grow 6% to GBP7.027m (2015:
GBP6.606m) reflecting, in part, a foreign currency impact from
Sterling weakening in 2016 (impact 3%). Non-recurring revenues
increased 2% to GBP2.370m (2015: GBP2.333m). As a result, overall
revenues increased by 6% to GBP9.963m (2015: GBP9.437m) with
recurring revenues representing 71% of Group revenues (2015: 70%).
Overheads have increased across the business mainly as a result of
the one-off adjustment in respect of the amortisation of platform
development costs, referred to below, with an adverse impact on
results of GBP0.720m. Clearly, this adjustment is an accounting
change in an estimate and is cash neutral. Adjusted EBITDA saw a 6%
increase to GBP2.433m (2015: GBP2.285m). Operating profit before
acquisition related items and one-off adjustments increased by 3%
to GBP1.463m (2015: GBP1.424m) and pre-tax profits before
acquisition related items and one-off adjustments also increased by
3% to GBP1.458m (2015: GBP1.416m). Operating profit for the year
was GBP0.412m (2015: GBP1.108m) and profit for the year was
GBP0.526m (2015: GBP1.212m).
Divisional Reviews
Dillistone Systems
The Dillistone Systems division is primarily focused on
providing technology solutions to the executive search market via
our range of "FileFinder" applications. This client group is made
up of both executive search firms and executive search teams in
major organisations.
Dillistone Systems' head office is in London and it has offices
in the US, Germany and Australia. The Division accounts for 49%
(2015: 49%) of the Group's revenue and it saw revenue grow 5% to
GBP4.858m (2015: GBP4.620m).
The Division had a difficult time in 2015 and we are delighted
to see it return to growth in 2016. Our investment in product
development led to a number of key new contract wins. We are
delighted to report that - to the best of our knowledge - the
largest single implementation on an Executive Search technology
platform in the US in 2016 was our FileFinder Anywhere product.
This implementation was by an existing client who chose to upgrade
to our latest suite. Furthermore, we believe that the largest
single implementation of an Executive Search technology platform in
Europe in 2016 was also our FileFinder Anywhere product which was
implemented by a firm which replaced a legacy tool with our
technology, choosing to become a client for the first time.
The business signed up over 100 new clients in the period, with
clients switching from direct competitors including Bullhorn, Cluen
and Invenias, and we believe that our product has now returned to a
position of market leadership.
Unfortunately, while our new business performance was good, the
economy impacted on licence revenues from our existing client base,
a large proportion of which are UK based. We typically enjoy
additional sales from these firms as they grow, but in 2016 a
larger proportion of those firms reduced licences rather than
taking on additional seats.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) increased by 1% to GBP1.434m (2015: GBP1.425m). As
discussed above, the Group reviewed its amortisation policy for
capitalised development costs to bring it more into line with
industry practice by writing off all such costs over five years
rather than a range of five to ten years. The impact of this on the
Dillistone division was GBP0.600m, increasing the total
depreciation and amortisation charge to GBP1.229m (2015:
GBP0.534m). Accordingly, operating profit fell 77% to GBP0.205m
(2015: GBP0.891m).
We continue to invest in the FileFinder Anywhere product suite,
which has included the release of a client portal, improved
reporting functionality, improvements in our mobile offering and
architectural enhancements to improve both performance and
scalability.
Voyager Software
Voyager Software is a provider of technology products targeted
at the entire recruitment landscape, from front office to back
office and bureaus, and includes both recruitment management
systems and pre-employment skills testing technology.
In 2016, the Voyager Software division accounted for 51% (2015:
51%) of Group revenues. The Division's revenues increased by 6% to
GBP5.105m (2015: GBP4.831m). Segmental operating profit before
amortisation and depreciation increased by 14% to GBP1.093m (2015:
GBP0.956m). The impact of the change in amortisation policy for
capitalised development was GBP0.120m, increasing the total
depreciation and amortisation charge to GBP0.461m (2015:
GBP0.327m). Divisional operating profit remained broadly unchanged
at GBP0.632m (2015: GBP0.629m).
2016 saw some major developments in the Division including:
-- Development of Infinity Connect - A new mobile companion app
for the popular Infinity SaaS solution, available for both iOS and
Android devices.
-- Additional functionality release in Infinity (inc. Infinity
SaaS) for the temporary recruitment sector
-- Further enhanced scalability of evolve through deployment on
Amazon Web Services and implementation of Elastic Searching
-- Launch of ISV.Online - our new candidate skills testing platform.
The Board is confident that both Divisions have strong
futures.
Financial Review
Total revenues increased by 6% to GBP9.963m (2015: GBP9.437m)
with recurring revenues increasing by 6% to GBP7.027m (2015:
GBP6.606m) while non-recurring revenues saw a 2% increase to
GBP2.370m (2015: GBP2.333m). Third party revenue amounted to
GBP0.566m in the period (2015: GBP0.498m). Revenue has benefitted
from the weakening value of Sterling. Using 2015 exchange rates,
revenues in 2016 would have been GBP9.651m.
Cost of sales increased by 13% to GBP1.478m (2015: GBP1.313m),
mainly due to investment in cloud based hosting facilities through
Azure and Amazon.
Administrative costs, excluding acquisition related items,
depreciation and amortisation, rose 4% to GBP6.052m (2015:
GBP5.839m). The Group has reviewed its amortisation policy for
capitalised development costs to bring it more into line with
industry practice by writing off all such costs over five years
rather than a range of five to ten years. This has resulted in a
one-off adjustment of GBP0.720m in the year, where the main impact
was in the Dillistone division. Total depreciation and
amortisation, including the one-off, adjustment increased to
GBP1.690m (2015: GBP0.861m).
Acquisition related administrative costs totalled GBP0.331m
(2015: GBP0.316m), and were in respect of the amortisation of
intangibles arising on the Voyager, FCP and ISV acquisitions and
movement in the estimation of contingent consideration. Finance
cost includes GBP0.015m (2015: GBP0.028m) relating to the unwinding
of the discount in respect of the contingent consideration.
Recurring revenues covered 100% of administrative expenses
before acquisition related and one-off costs (2015: 99%). Excluding
depreciation and amortisation of our own internal development, the
administrative costs are covered 116% (2015: 113%) by recurring
revenues.
There is a tax credit in 2016 of GBP0.134m (2015: credit
GBP0.140m). The 2016 credit reflects the significant R&D tax
credits available to both Dillistone Systems and Voyager Software
divisions, the change in deferred tax rate from 18% to 17%, as well
as the impact of the one-off adjustment in respect of amortisation
of development costs and adjustments to prior year computations.
These benefits are partially offset by the higher rates of
corporation tax that are payable overseas. The acquisition related
items tax credit reflects the reduction in deferred tax that arises
as amortisation is charged in the profit and loss account.
Profits for the year before acquisition related and other
one-off items fell 2% to GBP1.395m (2015: GBP1.419m) as 2015
adjusted profits benefitted from a tax credit of GBP0.003m (2016:
tax charge of GBP0.063m). Profits for the year after acquisition
related and other one-off items fell 57% to GBP0.526m (2015:
GBP1.212m). Basic earnings per share (EPS) fell to 2.68p (2015:
6.20p). Fully diluted EPS fell to 2.62p (2015: 6.00p). Adjusted
basic EPS fell 2% to 7.10p (2015: 7.26p).
Capital expenditure
The Group invested GBP1.126m in property, plant and equipment
and product development during the year (2015: GBP1.045m). This
expenditure included GBP1.056m (2015: GBP0.961m) spent on
intangible related costs.
Trade and other payables
As with previous years, the trade and other payables include
income which has been billed in advance but is not recognised as
income at that time. This principally relates to support, SaaS and
cloud hosting renewals, which are billed in 2016 but that are in
respect of services to be delivered in 2017. Contractual income of
this type is recognised monthly over the period to which it
relates. It also includes deposits taken for work which has not yet
been completed, as such income is only recognised when the work is
substantially complete or the client software goes 'live'. Also
included in trade and other payables is GBP0.375m (2015: GBP0.620m)
in respect of contingent consideration. At the end of 2016, there
are two tranches of contingent consideration payable in respect of
ISV and these are dependent on the level of revenue achieved in
2016 and the nine month period to 30 September 2017.
Cash
The Group finished the year with cash funds of GBP1.537m (2015:
GBP1.595m) and bank borrowings of GBP0.158m (2015: GBP0.325m). This
is after capital expenditure of GBP1.126m, the payment to the
vendors of ISV of GBP0.212m and dividend payments of GBP0.811m.
Julie Pomeroy
Finance Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
2016 2015
Note GBP'000 GBP'000
Revenue 5 9,963 9,437
Cost of sales (1,478) (1,313)
--------- ---------
Gross profit 8,485 8,124
Administrative
expenses (8,073) (7,016)
Operating profit 412 1,108
---------------------------- ----- --------- ---------
Adjusted operating
profit before acquisition
related and one
off items 4 1,463 1,424
Acquisition related
and one off items 7 (1,051) (316)
--------- ---------
Operating profit 412 1,108
---------------------------- ----- --------- ---------
Financial income 3 5
Financial cost (23) (41)
Profit before tax 392 1,072
Tax income 8 134 140
Profit for the
year 526 1,212
Other comprehensive
income
Items that will
be reclassified
subsequently to
profit and loss
Currency translation
differences 16 (27)
Total comprehensive
income for the
year 542 1,185
========= =========
Earnings per share
Basic 9 2.68p 6.20p
Diluted 9 2.62p 6.00p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Share Share Merger Retained Share Foreign Total
capital premium Reserve earnings option exchange
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 31
December
2014 969 1,432 365 3,514 118 128 6,526
Comprehensive
income
Profit for
the year
ended 31
Dec 2015 - - - 1,212 - - 1,212
Other
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - (27) (27)
Total
comprehensive
income - - - 1,212 - (27) 1,185
--------- -------------- ------------- -------------- ----------- ------------- ------------
Transactions
with owners
Issue of
share capital 14 199 - - - - 213
Share option
charge - - - 75 (47) - 28
Dividends
paid - - - (793) - - (793)
--------- -------------- ------------- -------------- ----------- ------------- ------------
Total
transactions
with owners 14 199 - (718) (47) - (552)
Balance
at 31
December
2015 983 1,631 365 4,008 71 101 7,159
========= ============== ============= ============== =========== ============= ============
Comprehensive
income
Profit for
the year
ended 31
Dec 2016 - - - 526 - - 526
Other
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - 16 16
Total
comprehensive
income - - - 526 - 16 542
--------- -------------- ------------- -------------- ----------- ------------- ------------
Transactions
with owners
Share option
charges - - - 2 14 - 16
Dividends
paid - - - (811) - - (811)
--------- -------------- ------------- -------------- ----------- ------------- ------------
Total
transactions
with owners - - - (809) 14 - (795)
Balance
at 31
December
2016 983 1,631 365 3,725 85 117 6,906
========= === ========
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2016
Group
2016 2015
ASSETS GBP'000 GBP'000
Non-current assets
Goodwill 3,415 3,415
Other intangible
assets 5,263 6,163
Property, plant
and equipment 215 257
Investments - -
8,893 9,835
Current assets
Inventories 5 16
Trade and other
receivables 2,196 1,736
Cash and cash
equivalents 1,537 1,595
3,738 3,347
Total assets 12,631 13,182
EQUITY AND LIABILITIES
Equity attributable
to owners of the
parent
Share capital 983 983
Share premium 1,631 1,631
Merger reserve 365 365
Retained earnings 3,725 4,008
Share option reserve 85 71
Translation reserve 117 101
--------- ---------
Total equity 6,906 7,159
--------- ---------
Liabilities
Non-current liabilities
Trade and other
payables 15 428
Borrowings - 158
Deferred tax liability 784 1,006
Current liabilities
Trade and other
payables 4,599 4,193
Borrowings 158 167
Current tax payable 169 71
--------- ---------
Total liabilities 5,725 6,023
Total liabilities
and equity 12,631 13,182
========= =========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2016
2016 2016 2015 2015
Operating activities GBP'000 GBP'000 GBP'000 GBP'000
Profit before tax 392 1,072
Adjustment for
Financial income (3) (5)
Financial cost 23 41
Depreciation and amortisation 2,069 1,240
Share option expense 16 28
Foreign exchange adjustments
arising from operations 31 (16)
Operating cash flows before 2,528 2,360
movement in working capital
(Increase) / decrease
in receivables (487) 278
Decrease in inventories 11 25
Increase / (decrease)
in payables 62 (307)
Taxation refunded/(paid) 24 (219)
-------- --------
Net cash generated from
operating activities 2,138 2,137
Investing activities
Interest received 3 5
Financial cost (8) (13)
Purchases of property,
plant and
equipment (70) (84)
Investment in development
costs (1,056) (961)
Contingent and deferred
consideration paid (212) (666)
Net cash used in investing
activities (1,343) (1,719)
Financing activities
Net proceeds from issue
of share capital - 213
Bank loan repayments made (167) (162)
Dividends paid (811) (793)
-------- --------
Net cash used in financing
activities (978) (742)
Net decrease in cash and cash
equivalents (183) (324)
Cash and cash equivalents
at 1,595 1,929
beginning of year
Effect of foreign exchange
rate changes 125 (10)
Cash and cash equivalents
at end of year 1,537 1,595
------------ --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2015
1. Publication of non-statutory accounts
In accordance with section 435 of the Companies Act 2006, the
Directors advise that the financial information set out in this
announcement does not constitute the Group's statutory financial
statements for the year ended 31 December 2016 or 2015, but is
derived from these financial statements. The financial statements
for the year ended 31 December 2015 have been delivered to the
Registrar of Companies. The financial statements for the year ended
31 December 2016 have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union. The financial statements for the year ended 31
December 2016 will be forwarded to the Registrar of Companies
following the Company's Annual General Meeting. The Auditors have
reported on these financial statements; their reports were
unqualified and did not contain statements under Section 498(2) or
(3) of the Companies Act 2006.
The consolidated statement of financial position at 31 December
2016 and the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended have been extracted
from the Group's financial statements. Those financial statements
have not yet been delivered to the Registrar.
2. Basis of preparation
The preliminary announcement is extracted from the consolidated
financial statements of the Group. The financial statements of the
subsidiaries are prepared for the same reporting date as the parent
company. Consistent accounting policies are applied for like
transactions and events in similar circumstances.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions that are
recognised in assets or liabilities are eliminated in full.
3. Accounting policies and changes thereto
This preliminary announcement has been prepared in accordance
with the accounting policies adopted in the last annual financial
statements for the year to 31 December 2015.
4. Reconciliation of adjusted operating profits to consolidated
statement of comprehensive income
Acquisition
related
Adjusted and Adjusted Acquisition
operating one-off operating related
profits items profits items
Note 2016 2016* 2016 2015 2015* 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 9,963 - 9,963 9,437 - 9,437
Cost of sales (1,478) - (1,478) (1,313) - (1,313)
------------------ -------------- --------- ----------- -------------- ---------
Gross profit 8,485 - 8,485 8,124 - 8,124
Administrative
expenses (7,022) (1,051) (8,073) (6,700) (316) (7,016)
Operating
profit 1,463 (1,051) 412 1,424 (316) 1,108
Financial
income 3 - 3 5 - 5
Financial
cost (8) (15) (23) (13) (28) (41)
Profit before
tax 1,458 (1,066) 392 1,416 (344) 1,072
Tax income
/ (expense) (63) 197 134 3 137 140
Profit for
the year 1,395 (869) 526 1,419 (207) 1,212
Other comprehensive
income net
of tax:
Currency translation
differences 16 - 16 (27) - (27)
Total comprehensive
income for
the year net
of tax 1,411 (869) 542 1,392 (207) 1,185
================== ============== ========= =========== ============== =========
Earnings per share - from continuing activities
Basic 9 7.10p 2.68p 7.26p 6.20p
Diluted 9 6.95p 2.62p 7.02p 6.00p
* see accounts note 7
5. Segment reporting
The Board principally monitors the Group's operations in terms
of results of the two divisions, Dillistone Systems and Voyager
Software. Segment results reflect management charges made or
received.
Divisional segments
For the year ended 31 December
2016
Dillistone Voyager Central Total
GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,858 5,105 - 9,963
----------- -------- ----------------- ----------
Segment EBITDA 1,434 1,093 (94) 2,433
Depreciation and
amortisation expense (1,229) (461) - (1,690)
-----------------
Segment result 205 632 (94) 743
Acquisition related
amortisation - - (379) (379)
Acquisition related
income - - 48 48
----------- -------- ----------------- ----------
Operating profit/(loss) 205 632 (425) 412
Financial income 3 - - 3
Loan interest - - (8) (8)
Acquisition related
interest expenses - - (15) (15)
----------
Profit before tax 392
Income tax expense 134
----------
Profit after tax 526
==========
Additions of non-current
assets 600 527 - 1,127
For the year ended 31 December
2015
Inter-divisional
Revenue
Dillistone Voyager Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,620 4,831 (14) - 9,437
----------- -------- ----------------- ---------- --------
Segment EBITDA 1,425 956 (96) 2,285
Depreciation and
amortisation expense (534) (327) - (861)
----------
Segment result 891 629 (96) 1,424
Acquisition related
amortisation - - (379) (379)
Acquisition related
charges - - 63 63
----------- -------- ---------- --------
Operating profit/(loss) 891 629 (412) 1,108
Financial income 4 1 - 5
Loan interest - - (13) (13)
Acquisition related
interest expenses - - (28) (28)
--------
Profit before tax 1,072
Income tax expense 140
--------
Profit after tax 1,212
========
Additions of non-current
assets 556 489 - 1,045
Products and services
The following table provides an analysis of the Group's revenue
by products and services:
Revenue
2016 2015
GBP'000 GBP'000
Recurring income 7,027 6,606
Non-recurring income 2,370 2,333
Third party revenues 566 498
9,963 9,437
========= =========
Recurring income includes all support services, SaaS and hosting
income. Non-recurring income includes sales of new licenses, and
income derived from installing those licenses including training,
installation, and data translation. Third party revenues arise from
the sale of third party software.
It is not possible to allocate assets and additions between
recurring, non-recurring income and third party revenue.
No customer represented more than 10% of revenue of the
Group.
6. Geographical analysis
The following table provides an analysis of the Group's revenue
by geographic market.
The Board does not review the business from a geographical
performance viewpoint and this analysis is provided for information
only.
Revenue
2016 2015
GBP'000 GBP'000
UK 7,142 6,778
Europe 1,047 864
US 1,388 1,381
Australia 386 414
9,963 9,437
========= =========
Non-current assets by geographical location
2016 2015
GBP'000 GBP'000
UK 8,886 9,829
US 6 4
Australia 1 2
8,893 9,835
========= =========
7. Acquisition related and other one off items
2016 2015
GBP'000 GBP'000
Included within administrative
expenses:
Estimated change in fair
value of contingent consideration (48) (63)
Amortisation of acquisition
intangibles 379 379
Additional amortisation on
change of estimated useful
life of platform technology 720 -
--------- ---------
1,051 316
Included within financial
cost:
Unwinding of discount on
contingent consideration 15 28
1,066 344
========= =========
8. Tax (income) / expense
2016 2015
GBP'000 GBP'000
Current tax 178 191
Prior year adjustment -
current tax (91) (185)
Deferred tax (100) 22
Prior year adjustment -
deferred tax (50) (31)
Deferred tax re acquisition
intangibles (68) (68)
Prior year adjustment - deferred
tax re acquisition intangibles (3) (69)
--------- ---------
Tax (income) / expense for
the year (134) (140)
========= =========
Factors affecting the tax charge
for the year
Profit before tax 392 1,072
========= =========
UK rate of taxation 20% 20.25%
Profit before tax multiplied
by the UK rate of taxation 78 217
Effects of:
Overseas tax rates 31 46
Impact of deferred tax not
provided 13 (7)
Enhanced R&D relief (169) (131)
Disallowed expenses 31 14
Rate differences re current
tax and deferred tax 26 6
Prior year adjustments (144) (285)
Tax (income) / expense (134) (140)
========= =========
Deferred tax provided in the financial statements is as
follows:
Group
2016 Movement 2015
GBP'000 GBP'000 GBP'000
Internally generated
intangible and
fixed assets 315 (152) 467
Provisions (9) 1 (10)
Acquisition
intangibles 478 (71) 549
---------
784 (222) 1,006
========= ========= =========
Group
2015 Movement 2014
GBP'000 GBP'000 GBP'000
Internally generated
intangible and
fixed assets 467 (6) 473
Provisions (10) 3 (7)
Acquisition
intangibles 549 (137) 686
---------
1,006 (146) 1,152
========= ========= =========
The UK corporation tax rate throughout the year was 20%.
Deferred tax is provided in relation to the UK at rates of between
17% to 19% depending on when reversals are expected to occur. The
tax credit is impacted by the higher rates of corporation tax
payable in the US and Australia offset by the R&D tax credits
available to both Dillistone Systems division and Voyager Software
division and the reduction in the long term rate of corporation tax
to 17% which has been used in the calculation of deferred tax. The
release of prior year provisions relate in part to the agreement of
the prior years' tax positions of UK companies and the utilisation
of tax losses not previously recognised. The Group has gross tax
losses and temporary timing differences of GBP369,000 (2015:
GBP492,000) for which no deferred tax asset has been recognised as
the timing of their utilisation is uncertain.
9. Earnings per share
2016 2016 2015 2015
Using Using
adjusted adjusted
operating operating
profit profit
Profit attributable GBP1,395,000 GBP526,0000 GBP1,419,000 GBP1,212,000
to ordinary shareholders
Weighted average
number of shares 19,668,021 19,668,021 19,547,754 19,547,754
Basic earnings per 7.10 2.68 pence 7.26 pence 6.20 pence
share pence
============= ============ ============= =============
Weighted average
number of shares
after dilution 20,082,096 20,082,096 20,209,339 20,209,339
Fully diluted earnings 6.95 2.62 pence 7.02 pence 6.00 pence
per share pence
============= ============ ============= =============
Reconciliation of basic to diluted average number of shares
2016 2015
Weighted average number
of shares (basic) 19,668,021 19,547,754
Effect of dilutive potential
ordinary shares - employee
share plans 414,075 661,585
Weighted average number of
shares after dilution 20,082,096 20,209,339
=========== ===========
There are 638,257 (2015: 353,257) share options not included in
the above calculations
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAESIFWSEIL
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April 26, 2017 02:01 ET (06:01 GMT)
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