RNS Number : 9408X
Total Systems PLC
01 July 2008
FOR RELEASE 7:00 AM
1 JULY 2008
TOTAL SYSTEMS plc
Preliminary results for the year ended 31 March 2008
Return to revenue growth & profitability
Total Systems plc ("Total" or "the Company"), suppliers of cost effective flexible software systems for the financial services industry,
primarily in the insurance and warranty sectors, announces its preliminary results for the year ended 31 March 2008.
Commenting on the Company's results Terence Bourne, Chairman, said:
"This has been a successful year in the development of Total Systems. We have continued to enhance software applications and add new
services for existing users. The previously announced commitment from Capita to adopt Ultima as their general insurance platform has started
to bear fruit with a positive impact on results for the year. Together, we are delighted to be playing a part in bringing Sharia compliant
insurance products to the UK market. Capita's "Software as a Service" (SaaS) model for the insurance industry and Total's flexible systems
are highly complimentary and this relationship should provide an excellent base to grow our revenues in the future.
I am pleased by the insurance industry's reception to the recent launch of insureTrac, Total System's telematics based insurance
solution. The UK's leading actuarial consultancy is contributing to this solution, as is a household name in global telecoms and this is
extremely encouraging. Early signs are that this product offering will take your Company into market areas not previously penetrated."
Financial Highlights
* Revenue � 4.05m (2007: � 3.36m)
* Profit/(loss) before tax � 431k (2007: � (530)k)
* Basic earnings/(loss) per 2.99p (2007: (3.98))
share
* Gearing Nil (2007: Nil)
* Net assets per share 38.68p (2007: 35.45p)
* Cash per share 22.90p (2007: 22.62p)
Product Summary
Ultima, the complete insurance and warranty solution, continues to bring significant business benefits to clients such as:
* Low cost of ownership.
* Integrated solution.
* Flexibility.
* Simplicity and speed of making changes using Business Configurator.
* Easy integration with external systems.
* Service Oriented Architecture.
Regarding the Company's current trading and outlook, Terence Bourne added:
"At a time of considerable economic and financial uncertainty your Company is in good shape with current trading running at a
satisfactory level. The sales and marketing team are proactively seeking new opportunities in our market place. We are seeing interest in
all our products and the Company is stable and starting to grow its revenues. The launch of insureTrac has generated huge interest with our
clients and sales prospects but there have been no orders at the time of writing. Although it is difficult to forecast in the present
climate, on current trends we anticipate turnover for the year ending 31 March 2009 will be similar to the year ended 31 March 2008. The
Board believes that the Company's strategy will bear fruit over the medium term."
E-mail: ir@totalsystems.co.uk web site: www.totalsystems.co.uk
Enquiries:
Terence Bourne, Chairman Total Systems plc 020 7294 4888
Granville Harris, Finance Director Total Systems plc 020 7294 4888
Notes for Editors:
Based in the City of London Total provides cost effective flexible software systems for the financial services industry, primarily in
the insurance and warranty sectors, as well as complementary IT consultancy, development, integration and support services.
The Company has a full listing on the London Stock Exchange.
Significant investment has been made by the Company in developing Ultima (General insurance system for personal and commercial lines).
Examples of Total's clients for Ultima include Axa Insurance Services (Denplan), Capita, DSG International, HSBC Insurance and Zurich
Insurance Company (Navigators & General).
Chairman's Statement
SUMMARY
This has been a successful year in the development of Total Systems. We have continued to enhance software applications and add new
services for existing users. The previously announced commitment from Capita to adopt Ultima as their general insurance platform has started
to bear fruit with a positive impact on results for the year. Together we are delighted to be playing a part in bringing Sharia compliant
insurance products to the UK market. Capita's "Software as a Service" (SaaS) model for the insurance industry and Total's flexible systems
are highly complementary and this relationship should provide an excellent base to grow our revenues in the future.
I am pleased by the insurance industry's reception to the recent launch of insureTrac, Total System's telematics based insurance
solution. The UK's leading actuarial consultancy is contributing to this solution, as is a household name in global telecoms and this is
extremely encouraging. Early signs are that this product offering will take your Company into market areas not previously penetrated.
RESULTS
Revenue for the financial year 2008 was �4,048,015 (2007: �3,357,988) and the profit before tax was �430,590 (2007: loss �530,006)
resulting in a profit per share of 2.99p (2007: loss per share 3.98p).
FINANCIAL
Zero gearing and net assets of 38.68p per share (2007: 35.45p), of which 22.90p per share is represented by cash (2007: 22.62p),
demonstrates our financial strength. Our return on capital employed is 10.58% (2007: (14.21)%).
DIVIDEND
No dividend is proposed or payable.
STRATEGY
Our strategy is to provide software, support and expertise to help management in financial services companies achieve their objectives
of becoming more efficient and profitable. To this end we offer flexible licensing models including "per policy" charging.
The Ultima product has been enhanced and the Company has plans for further development over the coming year. Research and Development
spending was �380,584 (2007: �528,984).
The Company is monitoring the market for complementary products to sell in order to give the sales and marketing team more touch points
with existing and potential customers. In the longer term this will enhance sales and earnings and potentially lead the Company into new
areas.
MARKET PLACE
There are a number of companies using outdated systems and running inefficient databases across disparate systems that would gain
significantly from an integrated system. The insurance industry is also changing due to the influence of aggregators, new entrants and
consolidation in the broking sector, but the influence of these changes should create further opportunities. Customer service is more
important than ever as is the ability to differentiate and bring new and innovative products to market quickly.
The benefits of Ultima far outweigh any advantages offered from developing alternatives overseas or moving processing offshore. Ultima
reduces IT costs and its integrated approach enhances customer service operations. The Business Configurator tool offers a fast route to
market for new offerings. In addition, the emergence of large scale affinity relationships demands a system that can be flexible while
coping with enormous amounts of interdependent data. Ultima, with Business Configurator, meets these demands.
The Capita relationship with its integration skills and leverage opens up an opportunity for a key market presence.
ENVIRONMENTAL AND SOCIAL
The Company operates from a single site in premises it owns in central London. Every care is taken to ensure that the Company operates
in an environmentally friendly way within the limitations imposed by our location and the nature of our operations. In regard to its
employees and the local community the Company allows employees time to take part in their own social responsibilities as necessary.
OPERATIONS
Our customers have continued to enhance and develop their systems during the year and your Company has provided full support to all
aspects of their requirements. Combined with the Capita business coming on stream the Company has been able to achieve a 20.6% increase in
revenue. The relationship with Capita is developing extremely well and in relation to our involvement with the Sharia compliant insurance
product there appear to be a number of areas for future productive partnerships.
PERSONNEL
I would like to express my gratitude to staff who have shown their professionalism and dedication to the Company. Our average length of
service is over nine years which demonstrates the effectiveness of the retention policies in place.
We encourage open communications to stimulate creative and innovative thinking. This combined with the wealth of experience of our staff
ensures that we have a pool of very skilled and versatile employees capable of handling a wide range of challenges within our market.
CURRENT TRADING AND OUTLOOK
At a time of considerable economic and financial uncertainty your Company is in good shape with current trading running at a
satisfactory level. The sales and marketing team are proactively seeking new opportunities in our market place. We are seeing interest in
all our products and the Company is stable and starting to grow its revenues. The launch of insureTrac has generated huge interest with our
clients and sales prospects but there have been no orders at the time of writing. Although it is difficult to forecast in the present
climate, on current trends we anticipate turnover for the year ending 31 March 2009 will be similar to the year ended 31 March 2008. The
Board believes that the Company's strategy will bear fruit over the medium term.
Terence Bourne
Chairman
30 June 2008
TOTAL SYSTEMS plc
Consolidated Income Statement
For the year ended 31 March 2008
Note 2008 2007
� �
Continuing operations
Revenue 2 4,048,015 3,357,988
------------- -----------
Operating profit/(loss) 301,412 (670,349)
Interest receivable and similar income 129,178 140,626
Interest payable and similar charges - (283)
------------ -----------
Profit/(loss) before taxation 430,590 (530,006)
Tax (payable)/credit (115,793) 111,133
------------ -----------
Profit/(loss) after taxation for the year 314,797 (418,873)
------------ -----------
Basic earnings/(loss) per ordinary share 4 2.99p (3.98)p
Diluted earnings/(loss) per ordinary share 2.99p (3.98)p
There is no recognised income or expense for the current or prior year other than as stated above. As a consequence a statement of
recognised income and expenses is not presented.
All the Group's operations are undertaken by the Company.
Consolidated Balance Sheet
At 31 March 2008
2008 2007
� � � �
ASSETS
Non-current assets
Property, plant and equipment 921,181 1,040,102
Deferred tax assets - 53,022
------------- ----------
Total non-current assets 921,181 1,093,124
Current assets
Trade and other receivables 1,627,666 845,810
Cash and cash equivalents 2,409,436 2,380,016
------------- -----------
Total current assets 4,037,102 3,225,826
------------- ------------
TOTAL ASSETS 4,958,283 4,318,950
------------- -----------
LIABILITIES
Current liabilities
Trade and other payables (826,369) (590,027)
Current tax liabilities (54,122) -
-------------- -----------
Total current liabilities (880,491) (590,027)
------------- -----------
Non-current liabilities
Deferred tax liabilities (8,649) -
------------- -----------
TOTAL LIABILITIES (889,140) (590,027)
------------ -----------
NET ASSETS 4,069,143 3,728,923
------------ -----------
Shareholders equity
Issued share capital 525,978 525,978
Share premium 83,010 83,010
Retained earnings 3,407,337 3,077,875
Stock option reserve 52,818 42,060
------------- -----------
TOTAL EQUITY 4,069,143 3,728,923
------------ -----------
Consolidated Cash Flow Statement
For the year ended 31 March 2008
Note 2008 2007
� � � �
Operating activities
Cash received from customers 4,149,475 4,101,042
Cash payments to suppliers (833,114) (987,877)
Cash payments to employees (1,705,056) (1,787,743)
Cash paid for PAYE and
National Insurance (1,084,266) (1,118,556)
Cash paid for VAT (620,886) (663,419)
Other business payments (33,940) (45,869)
----------- ------------
Cash outflow from operating 7 (127,787) (502,422)
activities
Income taxes received/(paid) 52,567 (52,567)
------------ -----------
Net cash outflow from
operating activities (75,220) (554,989)
Cash flows from investing
activities
Interest received 129,178 140,626
Receipts on sale of assets - 327
Purchase of plant and (24,538) (335,934)
equipment
------------- ----------
Net cash inflow/(outflow) from
investing activities 104,640 (194,981)
Cash flows from financing
activities
Interest paid - (283)
Equity dividends paid - (94,676)
----------- -----------
Net cash outflow from
financing activities - (94,959)
----------- -----------
Net change in cash and cash
equivalents 29,420 (844,929)
Opening cash and cash 2,380,016 3,224,945
equivalents
------------- -------------
Closing cash and cash 2,409,436 2,380,016
equivalents
------------- -----------
All the Group's operations are undertaken by the Company.
General Notes:
1. The financial information contained in this statement does not constitute the statutory accounts for the years ended 31 March
2008 and 2007, as defined in section 240 of the Companies Act 1985, but is derived from those accounts. The statutory accounts for the year
ended 31 March 2007 have been delivered to the Registrar of Companies and those for 31 March 2008 will be delivered following the Company's
Annual General Meeting. The Auditors have reported on those accounts; their reports were unqualified and did not contain statements under
Section 237(2) or Section 237(3) of the Companies Act 1985.
2. The Group's revenue is derived from the writing and supply of its computer software and supply of third party software both with
related support services in the United Kingdom. All activities derive from continuing operations segmented as follows:
2008 2007
� �
Time & materials 3,368,243 2,507,853
Own software licences and maintenance 477,511 563,717
Third party software licences and 202,261 286,418
maintenance
--------------- --------------
Total revenue 4,048,015 3,357,988
------------- -------------
3. The announcement has been prepared on the basis of the accounting policies as per the prior year and in accordance with International
Financial Reporting Standards (IFRS).
4. The calculation of basic earnings per share is based on a profit after taxation of �314,797 (2007: loss �418,873) and a weighted average
of 10,519,553 shares (2007: 10,519,553) in issue during the period.
5. It is intended to post the Annual Report to shareholders on 4 July 2008. Copies will then be available from the Registered Office of the
Group at 394 City Road, London, EC1V 2QA.
6. The Annual General Meeting will be held at 394 City Road, London, EC1V 2QA on 11 August 2008 at 10.00 a.m.
7. Reconciliation of operating profit/(loss) to net cash outflow from operating activities:
2008 2007
� �
Operating profit/(loss) 301,412 (670,349)
Depreciation charges 142,055 117,906
(Increase)/decrease in receivables (834,423) 60,509
Increase/(decrease) in payables 236,342 (38,721)
Loss/(profit) on sale of assets 1,404 (327)
Charge for share based payments 25,423 28,560
--------- ---------
Net cash outflow from operating activities (127,787) (502,422)
------------ ---------
8. Changes in Company and consolidated equity shareholders' funds:
Issued Share Retained Stock Total
share premium earnings option equity
capital reserve
� � � � �
As at 1 April 2006 525,978 83,010 3,591,424 13,500 4,213,912
Loss after tax for the year - - (418,873) - (418,873)
Final dividend paid - - (94,676) - (94,676)
Share based payments - - - 28,560 28,560
--------- -------- ----------- -------- -----------
As at 31 March 2007 525,978 83,010 3,077,875 42,060 3,728,923
Profit after tax for the year - - 314,797 - 314,797
Share options lapsed - - 14,665 (14,665) -
Share based payments - - - 25,423 25,423
--------- --------- ------------ -------- ------------
As at 31 March 2008 525,978 83,010 3,407,337 52,818 4,069,143
--------- --------- ------------ -------- ------------
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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