Interim Results
November 26 2003 - 2:00AM
UK Regulatory
RNS Number:4932S
Computer Software Group PLC
26 November 2003
Computer Software Group plc
Interim Results for the six months ended 31 August 2003
Chairman's Statement
I am pleased to report the results of Computer Software Group plc ("the Group")
for the six months ended 31 August 2003.
The turnaround to operating profit of #161,000 before goodwill amortisation and
finance costs reflects the sustained improvement in underlying trading
performance for the core business together with a significant contribution from
Chorus Application Software Limited ("Chorus") following its acquisition in May
2003.
Results and Dividend
Turnover for the six months was #2,533,000 (2002: #1,800,000) and comprised
software, services and support revenue. This is around 40% higher than the
turnover reported for the same period in the previous financial year and is due
mainly to the inclusion of Chorus turnover.
Revenues for the period comprise #1,054,000 (2002: #1,288,000) from both the
sports and cross-industry CRM markets for TALENT software, #808,000 (2002:
#763,000) from the association market for Integra software and #671,000 (2002:
#nil) from the specialist accounting, distribution and payroll markets for
Chorus software.
The operating profit before goodwill amortisation was #161,000 (2002: loss
#72,000).
Amortisation of goodwill was #777,000 (2002: #613,000). The loss before taxation
was #632,000 (2001: #690,000) and the basic loss per share was 2.7 pence (2002:
loss 4.8 pence).
The Board does not recommend the payment of an interim dividend.
Operating review
During the year, the Group has implemented a significant investment programme to
upgrade both TALENT and Integra products and to develop several new modules. The
acquisition of Chorus has also provided opportunities to cross-sell products and
to derive cost synergies within the Group.
TALENT
TALENT Sport has collaborated with Manchester City Football Club to introduce an
innovative ticketless access system using a Smartcard linked to Talent software.
This system is the first of its kind in Europe and allows the club to market a
wider range of products to its supporters and provide them with a superior
service.
Chelsea Football Club, a client of Computer Software Group for many years, has
also recently invested in Smartcard technology allied to TALENT software to
implement a loyalty scheme for its season ticket holders. The scheme provides
the season ticket holder with an opportunity to reduce the cost of the ticket by
spending in identified retail outlets within Chelsea Village.
Both clubs have benefited from the flexibility of TALENT software that allows
them to integrate both leading edge technology and legacy systems seamlessly to
the back office.
We have further developed our relationships with appropriate partners such as
IBM to raise the profile of TALENT CRM.
Recent additions to the TALENT CRM customer base include Alfred Dunhill Limited,
Hellerman Tyton Limited and Morphy Richards Limited.
Integra
Development activity for Integra has centred round the enhancement of its core
product with the imminent release of Version 3.2 incorporating new functionality
and utilities, Microsoft Office integration and the expansion of the Web
Publishing tools. The Web systems have been widely accepted by the client base
and are generating a strong pipeline of interested prospects.
The division has had a highly successful year to date from the sales
perspective. A number of major projects have been undertaken with new customers
including the Chartered Institute of Housing, the Retail Motor Industry
Federation, the Chartered Institute of Building Service Engineers, the Energy
Industries Council, the Institute of Environmental Management and Assessment and
the Amateur Swimming Federation of Great Britain.
Chorus
Development activity in the Chorus division since May 2003 has resulted in the
combination of Chorus and Talent software to provide a Customer Services module.
This has already been adopted by several customers and looks to be a promising
addition to the Chorus offering.
Chorus Version 7 has been announced and is scheduled for release in May 2004.
The functional capabilities of Chorus.ea will be combined with the extensive
distribution capability of Chorus.5 in a single package.
Chorus has successfully implemented the first phase of a Talent Commerce
solution allowing the processing of XML orders. The second phase, due to go live
later in the year, will deliver full on-line web ordering capabilities.
Recent new customers for Chorus.ea financial accounting systems include Volvo UK
and MPL Communications Limited. Hardware sales of IBM i810 processors for the
current year to date are twice the full year 2002 revenues and now provide a
significant contribution to Chorus turnover.
Board
Following the acquisition of Chorus on 30 May 2003, Neil Cross, previously
Managing Director was appointed Executive Director with full operational control
of the Chorus division, Barbara Firth, Head of Finance and Administration, and
Jolanta Pilecka, Head of Marketing, were appointed Executive Directors. Robert
Downey and Vinodka Murria were appointed as Non-Executive Directors at the same
time.
Outlook
The outlook for the second half-year is encouraging across all divisions. Group
turnover is steadily improving and costs are firmly under control. Monthly
results since the half-year end consistently show a profit after deduction of
all costs but before goodwill amortisation.
We continue to invest in improving and enhancing our product and service
offerings
Conclusion
The acquisition of Chorus in May 2003 and its subsequent integration into the
Group has been a major focus for the first half-year. I am pleased to report
that this has been achieved with minimal disruption to normal business. I thank
my fellow directors and colleagues for their willing co-operation and
enthusiastic determination to ensure the future success of the enlarged Group.
Michael Jackson
Chairman
25 November 2003
Consolidated Profit and Loss Account
(Unaudited) (Unaudited) (Audited)
six months to six months to year ended
31 August 31 August 28 February
2003 2002 2003
#000's #000's #000's
Turnover
Continuing 1,862 1,800 3,584
Acquisitions 671 - -
------------ ------------ ------------
2,533 1,800 3,584
Operating profit 161 (72) (148)
before goodwill
amortisation
Goodwill (777) (613) (1,232)
amortisation
------------ ------------ ------------
Operating Loss (616) (685) (1,380)
Net interest payable (16) (5) (19)
Loss on ordinary (632) (690) (1,399)
activities before
taxation
Tax on loss on - - 40
ordinary activities
------------ ------------ ------------
Loss on ordinary (632) (690) (1,359)
activities after
taxation
======== ======== ========
Loss per ordinary (2.7) (4.8) (9.5)
share (pence)
Diluted Loss per (2.7) (5.0) (9.7)
ordinary share (pence)
Consolidated Balance Sheet
(Unaudited) (Unaudited) (Audited)
31August 31 August 28 February
2003 2002 2003
#000's #000's #000's
Fixed Assets
Intangible assets 4,630 3,156 2,866
Tangible assets 600 110 92
------------ ------------ ------------
5,230 3,266 2,958
Current Assets
Debtors 1,657 1,091 1,258
Cash at bank and in 78 - 32
hand
------------ ------------ ------------
1,735 1,091 1,290
Creditors: amounts (1,836) (1,440) (1,736)
falling due within one
year
------------ ------------ ------------
Net current (101) (349) (446)
liabilities
Total assets less 5,129 2,917 2,512
current liabilities
Creditors: amounts
falling due after more
than one year (3) (28) (7)
------------ ------------ ------------
Net assets 5,126 2,889 2,505
======== ======== ========
Capital and reserves
Called up share 9,051 7,132 7,417
capital
Share premium account 3,610 1,991 1,991
Merger reserve 641 641 641
Profit and loss (8,176) (6,874) (7,544)
account
------------ ------------ ------------
5,126 2,889 2,505
======== ======== ========
Consolidated Cash Flow Statement
(Unaudited) (Unaudited) (Audited)
six months to six months to year ended
31 August 31 August 28 February
2003 2002 2003
#000's #000's #000's
Reconciliation of
operating loss to net
cash outflow from
operating activities
Operating loss (616) (685) (1,380)
Depreciation charge 37 42 71
Goodwill 777 613 1,232
amortisation
Movement in debtors (82) 102 (15)
Movement in (705) (293) 82
creditors
------------ ------------ ------------
Net cash outflow from (589) (221) (10)
operating activities
Cash flow statement
Net cash outflow from (589) (221) (10)
operating activities
Returns on investment (16) (5) (19)
and servicing of
finance
Taxation 40 60 57
Capital expenditure (14) (27) (22)
and financial
investment
Acquisitions (108) - (44)
------------ ------------ ------------
Net cash outflow (687) (193) (38)
before financing
Financing 733 (8) (31)
------------ ------------ ------------
Increase/(decrease) in 46 (201) (69)
cash
Reconciliation of net
cashflow to movement
in net debt
Increase/(decrease) in 46 (201) (69)
cash
Changes in net debt 1,273 24 31
resulting from
cashflows
Loans and finance
leases acquired with
subsidiary (1,313) - -
New finance leases - (16) (16)
------------ ------------ ------------
Movement in net debt 6 (193) (54)
in period
Opening net cash/ (52) 2 2
(debt)
------------ ------------ ------------
Closing net debt (46) (191) (52)
======== ======== ========
Notes to the financial statements
1. Basis of preparation
a. *The interim financial statements have been prepared on the basis of the
accounting policies set out in the 2003 statutory accounts of Computer
Software Group plc. The Interim statements were approved by the Board of
Directors on 25th November 2003.
b. *The figures for the year ended 28 February 2003 have been extracted from the
statutory accounts of Computer Software Group plc as filed with the
Registrar of Companies. The Auditors' report on those accounts was
unqualified and did not contain any statement under Section 237 of the
Companies Act 1985.
c. *The half-year figures to 31 August 2003 have not been audited nor reviewed
by the group's auditors and do not constitute statutory accounts.
2. Earnings per share
The basic loss per ordinary share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average number of
shares in issue during the period. The diluted loss per ordinary share is
calculated by dividing the loss attributable to ordinary shareholders by the
weighted average number of shares in issue during the period diluted for
employee share options and warrants.
Six months to Six months to Year ended
31 August 2003 31 August 2002 28 February
2003
Loss attributable to
ordinary shareholders
(#'000) 632 690 1,359
Weighted average number
of shares ('000)
Basic 23,093 14,262 14,311
Diluted 23,084 13,936 14,028
Basic loss per share (2.7)p (4.8)p (9.5)p
Diluted loss per share (2.7)p (5.0)p (9.7)p
3. *Acquisition of Chorus Application Software Limited
The Company acquired Chorus Application Software Limited ("Chorus") on 30
May 2003 for a total consideration of #1,447,000 comprising #200,000 in cash
and 62,350,000 ordinary shares. Following completion, the Company procured
that Chorus repay #1,000,000 of loanstock and interest accrued thereon to
certain of the vendors.
4. *Placing
On 29 May 2003, the Company raised approximately #2,021,000 by way of a
limited placing to provide cash for the acquisition of Chorus, repayment of
the loanstock and accrued interest and to provide working capital for the
Group.
5. Sub-division of share capital
On 29 May 2003, the issued ordinary shares of 5p in the share capital of the
Company were each sub-divided into one ordinary share of 1p and one deferred
share of 4p. Also on 29 May, the un-issued ordinary shares of 5p in the
share capital of the Company were re-designated as ordinary shares of 1p by
sub-dividing each existing ordinary share of 5p into five ordinary shares of
1p each.
6. Consolidation of share capital
On 23 October 2003, every ten ordinary shares of 1p each in the capital of
the Company were consolidated into one ordinary share of 10p in the capital
of the Company. The figures for earnings per share for this and prior
periods have been restated to reflect the share consolidation.
7. Dividends
No dividend has been proposed.
8. Responsibility
The directors of the Company accept responsibility for the information
contained in this document and to the best of their knowledge and belief,
(having taken all reasonable care to ensure that such is the case), the
information contained in this document is in accordance with the facts and
does not omit anything likely to affect the import of such information.
9. Availability of Interim Report
Copies of these results together with the Chairman's statement are being
sent to shareholders and will also be available from the company's
registered office at Integra House, 138 -140 Alexandra Road, London SW19
7JY.
This information is provided by RNS
The company news service from the London Stock Exchange
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