Interim Results
28 January 2004 - 6:00PM
UK Regulatory
RNS Number:7039U
SiRViS IT PLC
28 January 2004
For Immediate Release 28 January 2004
SiRViS IT plc
(formerly Systems Integrated Research plc)
Interim Results for the 26 weeks to 30 November 2003
Chairman's Statement
It is with great pleasure that I present my first Interim Statement in respect
of your Group, having been appointed to the Board on 24 October 2003. Since the
financial year end the Group has acquired Linetex Computers Limited ("Linetex"),
which your board believes will enable us to make significant advances towards
its strategic goal to be able to develop the business within the education
market and provide a platform to expand into other IT related areas.
Financial results
I am pleased to report that in the six months ended 30 November 2003 the Group
achieved a profit before taxation of #129,000, compared to #18,000 for the
corresponding period last year.
Turnover for the six months was down 5 per cent. at #528,000. Overheads are 27
per cent. lower at #374,000 due to the cost reduction exercise in the latter
part of the previous financial year. Net cash inflow before financing increased
to #207,000.
Recent developments
Since the end of the last financial year the Group has changed significantly.
On 12 December 2003 the Group announced that it was raising #2.9m via a share
placing to facilitate the acquisition of Linetex. At the EGM held on 8 January
2004 the resolutions to approve and implement the placing and the acquisition
were passed and the acquisition subsequently completed. A resolution was also
passed to change the name of the Group to SiRViS IT plc.
Acquisition of Linetex
The acquisition allows the Group to look forward with renewed vigour and growth
opportunities; the Group now has significant recurring income, a robust customer
base to build upon and to develop its business within the education market.
About Linetex:
* the company offers a range of IT services including support, consultancy
and system installation to over 4,500 customer sites across the UK;
* it sells primarily to software companies and value added resellers who
operate in a variety of business sectors including hospitality, leisure,
legal and retail;
* it has a profitable track record and approximately 80 per cent. of its
revenues are derived from service contracts, and employs approximately 90
staff;
* a majority of the top ten Linetex support service contract customers have
been with the company for over four years; and
* turnover for the ten months ended 31 August 2003 was #4.68m with profit
before taxation of #0.63m;
Group operations
Your Group now comprises two operating companies - Linetex Computers Limited and
SiR Learning Systems Limited. The Group serves both the public and commercial
sectors of the IT market, Linetex with IT support services and SiR Learning
Systems with educational multimedia software.
The Directors' believe there are opportunities to develop the business of the
enlarged Group both organically and by acquisition given the fragmented IT
support service sector in the UK. Following the placing, the significantly
improved capital base should enable Linetex to tender for larger outsourcing IT
contracts from new and existing clients. The Group's education services
division will bring together both the outsourcing skills of Linetex and the
experience of the Group in the education sector.
Directorate changes
Carl Berg, the previous chairman, resigned prior to the acquisition on 11
December 2003. I would like to take this opportunity to thank him for the
contribution he has made during his seven years of stewardship, and also for his
continued financial support for the Group.
I would like to welcome onto the Board, Colin Sales (Operations Director), Hugh
Pollock (Service Director) and Ian Bailey (Finance Director), Colin and Hugh
have been with the Linetex business since 1988 and 1986 respectively and Ian
joined the Group in 1998 having previously had 16 years experience in the IT
computer services sector.
General
Current demand for IT service products remains buoyant and during the last three
months Linetex have secured new long term service support contracts worth
approximately #400,000 per annum. I am confident that your Group is now well
positioned to grow and sustain a competitive stance in the market sectors it
serves.
I would like to record my appreciation and thanks to our new investors who
supported the placing, to our professional advisers and I would particularly
like to welcome the Linetex employees to the Group.
Consolidated Profit and Loss Account
Unaudited Unaudited Audited
6 Months to 6 months to Year to
30 Nov 30 Nov 31 May
2003 2002 2003
#'000 #'000 #'000
Turnover 528 553 853
Cost of sales (18) (12) (23)
Gross profit 510 541 830
Operating expenses (374) (517) (1,104)
Operating profit/(loss) 136 24 (274)
Investment income - interest receivable 2 4 5
Operating profit/(loss) on ordinary activities before interest 138 28 (269)
Interest payable and similar charges (9) (10) (19)
Profit/(loss) on ordinary activities before taxation 129 18 (288)
Taxation on profit/(loss) on ordinary activities - - -
Profit/(loss) for the period 129 18 (288)
Appropriation for dividends on cumulative redeemable preference shares
held by minority (22) (22) (45)
Retained profit/(loss) for the period 107 (4) (333)
Earnings/(loss) per ordinary share 0.80p (0.03p) (2.49p)
IIMR Earnings/(loss) per ordinary share 0.76p (0.02p) (2.48p)
Notes:
1. The interim results are unaudited and do not comprise full accounts within
the meaning of Section 240 of the Companies Act 1985. Full accounts for the
year ended 31 May 2003, on which the auditors gave an unqualified report,
have been delivered to the Registrar of Companies.
2. The interim results have been prepared on the basis of the accounting
policies set out in the audited accounts for the year ended 31 May 2003.
3. All figures in the profit and loss account above relate to continuing
operations.
4. No charge to UK corporation tax or deferred tax arises and there is no
charge to taxation in respect of the Group's associated undertaking.
5. No interim dividend has been declared on the ordinary shares (2002: Nil).
6. The calculation of earnings/(loss) per share is based on the profit/(loss)
attributable to the shareholders and the weighted average number of
ordinary shares in issue during the period of 13,400,051 (2002:
13,400,051).
7. This announcement is being circulated to all shareholders and copies will
be available from the Company's head office address.
8. The Group has no recognised gains or losses other than the profit/(loss)
above and therefore no separate statement of total recognised gains or
losses has been presented.
Consolidated Balance Sheet
Unaudited Unaudited Audited
30 Nov 30 Nov 31 May
2003 2002 2003
#'000 #'000 #'000
Fixed assets
Intangible assets - 39 -
Tangible assets 34 74 51
34 113 51
Current assets
Stocks 13 14 16
Debtors: amounts falling due after more than one year 29 103 44
Debtors: amounts falling due within one year 348 435 201
Cash at bank and in hand 203 146 120
593 698 381
Creditors: amounts falling due within one year (212) (176) (164)
Net current assets 381 522 217
Total assets less current liabilities 415 635 268
Creditors: amounts falling due after more than one year (511) (493) (502)
Deferred income (139) (200) (130)
(650) (693) (632)
Net liabilities (235) (58) (364)
Capital and reserves
Called up share capital 134 134 134
Share premium account 3,956 3,956 3,956
Profit and loss account - deficit (5,800) (5,578) (5,907)
Total equity shareholders' funds (1,710) (1,488) (1,817)
Minority interest - non-equity 1,475 1,430 1,453
(235) (58) (364)
Notes:
1. Goodwill arising on the acquisition of subsidiaries and associates was
written off immediately against profit & loss reserves in accordance with
the transitional provisions of FRS10. The cumulative amount of goodwill
written off against profit & loss reserves is #3,442,000 (2002:
#3,442,000).
2. The Group has an unrecognised deferred taxation asset in respect of trading
losses of approximately #3,500,000 carried forward, which as yet the
directors do not consider it appropriate to recognise.
3. The Group has acquired Linetex Computers Limited since the period end with
the related funding provided from a share placing and an additional #1m
loan from Berg & Berg Enterprises Inc. As part of this transaction the
minority interest represented by the preference shares in SIR Learning
Systems Limited have been acquired cum dividend in exchange for new shares
in the Group, valued at #1,121,000.
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
6 months to 6 months to Year to
30 Nov 30 Nov 31 May
2003 2002 2003
#'000 #'000 #'000
Net cash inflow/(outflow) from continuing operating activities (see below) 149 (327) (400)
Returns on investments and servicing of finance
Net interest received 2 4 5
2 4 5
Taxation 48 - -
Capital expenditure and financial investment
Purchase of intangible fixed assets - (39) -
Purchase of tangible fixed assets (1) (20) (18)
Sale of tangible fixed assets 9 7 12
8 (52) (6)
Net cash inflow/(outflow) before financing 207 (375) (401)
Financing
Expenses relating to placing (124) - -
Increase/(decrease) in cash in the period 83 (375) (401)
Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from continuing operating activities
Operating profit/(loss) - continuing activities 136 24 (274)
Depreciation of tangible fixed assets 14 17 33
(Gain)/loss on disposal of tangible fixed assets (5) 1 1
Decrease/(increase) in stocks 3 1 (1)
(Increase)/decrease in debtors (8) (193) 100
Decrease in creditors - (43) (55)
Increase/(decrease) in deferred income 9 (134) (204)
Net cash inflow/(outflow) from continuing operating activities 149 (327) (400)
Enquiries:-
Mark Lewis, CEO SiRViS IT plc 01773 820011
John Simpson, Nominated Adviser ARM Corporate Finance Limited 020 7512 0191
Shane Dolan, Financial Public Relations Biddicks 020 7448 1000
- end -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUQPGUPCGMM
