RNS Number:3094H
Compel Group PLC
11 February 2003
11 February 2003
Compel Group PLC
("Compel" or "the Group")
Interim Results for the six months ended 31 December 2002
Compel Group PLC announces interim results for the six
months ended 31 December 2002.
Highlights
* Results were in line with expectations:
> Group turnover was #25m (2002: #32m)
> Profit before goodwill amortisation and restructuring
costs was #99k (2002: #525k)
* Market conditions declined from an already depressed
level, in response to which Compel has further reduced its
cost base. In implementing these cost reductions, the Group
has minimised any impact on the excellence of its customer
service, ability to win new business and long term prospects
* Compelsolve either sustained or increased its market
share, with continued focus upon Oracle, Digital
Communications, Data Management and Technology solutions
* Hamilton Rentals increased its market share, further
strengthening its position as the UK's largest and best
known short term rental company
* Compelsource net asset determination concluded with a
positive outcome, determining that an adjustment to the
purchase price of #864k was required, compared to SCH's
claim of #6.6m
* Cash balance at the period end was #8m
* The Board is declaring an unchanged interim dividend of
0.5p per share
Sir Michael Bett, Chairman, commented:
"Compel is soundly positioned in this difficult environment.
We are confident in the business' underlying profitability
(before goodwill amortisation), we believe we can continue to
increase our market share, and we have substantial cash
reserves. The solutions Compel offers are attractive to
customers and we will tenaciously pursue every opportunity to
grow the size and profits of our business. We remain positive
about the future."
For further information please contact:
Compel Group PLC Today (11.2.2003): 020 7067 0700
Neville Davis, Chief Executive Thereafter: 01438 791461
Weber Shandwick Square Mile 020 7067 0700
Nick Oborne/Sally Lewis
11 February 2003
Compel Group PLC
("Compel" or "the Group")
Interim Results for the six months ended 31 December 2002
Chairman's Statement
I am reporting the results for Compel for the six months ended
31 December 2002.
Financials
Our results are in line with expectations. The key elements
are:
* Turnover was #25m as compared to #32m in the
corresponding period last year.
* We achieved a profit (before goodwill amortisation and
restructuring costs) of #99k as compared to a profit of
#525k in the corresponding period last year.
* Our cash balance at the period end was #8m.
* We are declaring an interim dividend at the same level
as last year - 0.5p per share.
Market and Performance
Compel continues to provide IT solutions through two divisions:
Compelsolve (enterprise solutions) and Hamilton Rentals (rental
solutions).
During this period our markets declined further from an already
depressed level. In response to this, as we announced at our
AGM in November, we have further reduced our cost base,
incurring a restructuring charge of approximately #400k in so
doing. In implementing these cost reductions we have minimised
any impact on the excellence of our customer service, our
ability to win new business, and our long term prospects.
Within Compelsolve we have continued to focus upon Oracle,
Digital Communications, Data Management and Technology
Solutions and we believe that over this period each of these
areas has either sustained or increased its market share.
Hamilton Rentals has increased its market share, further
strengthening our position as the UK's largest and best known
short term rental company. We have continued to successfully
manage our fleet, reducing its size to reflect market
conditions, whilst avoiding any asset write offs.
Services are an integral part of all of the solutions which
Compel provides and we have continued to drive this important
element of our business.
In market conditions such as these, the capability and
commitment of any company's employees are of paramount
importance; our highly skilled workforce has shown outstanding
commitment.
Compelsource Net Asset Determination
The long running process to determine the value of the net
assets of Compelsource which were transferred to SCH was
finally concluded during October 2002. From our perspective
the outcome was positive, with the Independent Accountant
determining that an adjustment to the purchase price of #864k
was required, compared to SCH's claim of #6.6m.
The contract specified that SCH retain #2m from the initial
consideration through to March 2003, subject to any claims;
Compel provided in full against this #2m retention. Following
the determination, the balance of the retention of #1,136k is
due to be paid to us by SCH in March 2003, subject to any
additional claims. We are not aware of any basis for further
claims but we consider it prudent to continue to provide
against the balance of the retention sum until such time as
payment is received.
Non-Executive Directors
Effective 31 December 2002, Dick Measelle resigned as a non-
executive director after 3 years service. The Board wish to
thank him for his substantial contribution during that period.
He is replaced by Karen Slatford who has spent most of her
career working for Hewlett Packard in Sales, Marketing and
General Management roles, most recently as Vice President and
General Manager Worldwide Sales and Marketing, Business
Customer Organisation, where she had responsibility for all of
Hewlett Packard's corporate customers worldwide. Karen left
Hewlett Packard in 2001 to pursue a range of non executive and
consultancy activities. We are pleased to welcome Karen to the
Board and are certain that her skills, experience and extensive
knowledge of the IT industry will be of material benefit to
Compel.
Prospects
Market conditions appear to have stabilised at the moment -
albeit at a very low level.
Compel is soundly positioned in this difficult environment. We
are confident in the business' underlying profitability
(before goodwill amortisation), we believe we can continue to
increase our market share, and we have substantial cash
reserves. The solutions Compel offers are attractive to
customers and we will tenaciously pursue every opportunity to
grow the size and profits of our business. We remain positive
about the future.
Sir Michael Bett
Chairman
11 February 2003
For further information please contact:
Compel Group PLC Today (11.2.2003): 020 7067 0700
Neville Davis, Chief Executive Thereafter: 01438 791461
Weber Shandwick Square Mile 020 7067 0700
Nick Oborne/Sally Lewis
COMPEL GROUP PLC
Unaudited Consolidated Profit and Loss Account
For the six months ended 31 December 2002
6 months 6 months 12 months
Note ended ended ended
31 December 31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Turnover 24,761 32,003 63,892
Gross profit 6,895 8,152 16,183
Other operating income - - 1,028
Operating profit before
goodwill and exceptional costs 8 408 2,298
Goodwill amortisation 3 (414) (270) (3,206)
Exceptional costs 3 (396) (513) (1,037)
Operating loss (802) (375) (1,945)
Net interest receivable 91 117 254
-----------------------------------------------
Loss on ordinary activities
before taxation (711) (258) (1,691)
Taxation on loss on ordinary
activities - (6) 706
-----------------------------------------------
Loss on ordinary activities
after taxation (711) (264) (985)
Dividends (155) (157) (467)
===============================================
Retained loss for the period (866) (421) (1,452)
-----------------------------------------------
Earnings/(loss) per share
- basic and diluted 4 (2.3p) (0.9p) (3.2p)
- basic and diluted before
goodwill charges (1.0p) 0.0p 7.2p
Net dividend per share 5 0.5p 0.5p 1.5p
Compel Group PLC has no recognised gains nor losses during the current
and previous periods other than those passing through the Profit
and Loss account.
All results for the current period are for continuing operations.
COMPEL GROUP PLC
Unaudited Consolidated Balance Sheet
As at 31 December 2002
31 December 31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Fixed assets
Intangible assets - goodwill 6,197 9,579 6,611
Tangible assets 5,334 6,528 6,143
Investments 80 80 80
-----------------------------------------------
11,611 16,187 12,834
Current assets
Stocks 125 183 297
Debtors 13,505 13,574 14,511
Investments 2,795 7,311 3,731
Cash at bank and in hand 7,892 11,110 9,655
-----------------------------------------------
24,317 32,178 28,194
Creditors
Amounts falling due within one year (15,316) (23,783) (18,147)
-----------------------------------------------
Net current assets 9,001 8,395 10,047
-----------------------------------------------
Total assets less current liabilities 20,612 24,582 22,881
Creditors
Amounts falling due after more
than one year (1,250) (2,150) (1,700)
Provisions for liabilities and charges (644) (1,617) (1,501)
Deferred income (1,000) (1,199) (1,096)
================================================
Net assets 17,718 19,616 18,584
------------------------------------------------
Capital and reserves
Called up share capital 1,551 1,551 1,551
Share premium account 4,951 4,951 4,951
Capital reserves 1,865 1,865 1,865
Other reserves 3,786 8,644 3,786
Profit and loss account 5,565 2,605 6,431
=================================================
Equity shareholders' funds 17,718 19,616 18,584
-------------------------------------------------
COMPEL GROUP PLC
Unaudited Consolidated Cash Flow Statement
For the six months ended 31 December 2002
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2002 2001 2002
Note #'000 #'000 #'000
Net cash (outflow)/inflow
from operating activities 6 (309) 4,960 6,684
Returns on investments and
servicing of finance 93 105 223
Taxation 95 (499) (727)
Capital expenditure and
financial investment (1,559) (2,027) (3,749)
Equity dividends paid (310) (394) (551)
-----------------------------------------------
Net cash (outflow)/inflow before use
of liquid resources and financing (1,990) 2,145 1,880
Management of liquid resources 957 (3,526) 55
Financing (730) (563) (5,334)
==================================================
Decrease in cash in the period 7 (1,763) (1,944) (3,339)
--------------------------------------------------
COMPEL GROUP PLC
Notes to the Accounts
1. Basis of preparation
The financial statements and comparatives have been prepared on a
basis consistent with the statutory accounts for the year ended 30
June 2002, and in accordance with new accounting standards
applicable to the year ended 30 June 2003.
2. Segmental information
Turnover comprises sales of computer systems and services to major
computer users, within the United Kingdom. In the opinion of the
directors, only one class of business is operated by the Group.
3. Goodwill amortisation and exceptional costs
Goodwill amortisation for the year ended 30 June 2002 comprises
goodwill amortisation of #1,082,000 and an impairment charge of
#2,124,000.
Exceptional costs principally comprise staff severance costs and in
the prior year also included premises closure costs.
4. Earnings per share
The calculation of loss per share for the six months ended 31 December
2002 is based on a loss of #711,000 (2001: loss of #264,000) and
on a weighted average of 31,016,344 (2001: 30,635,217) ordinary
shares in issue during the period.
The calculation of diluted loss per ordinary share is based on the
weighted average ordinary shares of 31,023,832 (2001: 30,635,217)
which would arise if all outstanding share options were exercised.
Diluted loss per share is the same as basic loss per share as the
impact of the dilutive potential ordinary shares is to decrease
the loss per share.
5. Interim dividend
The Directors propose an interim dividend of 0.5p (2001: 0.5p) net per
share. The amount has been calculated on the basis of 31,016,344
shares (2001: 31,016,344).
The interim dividend will be paid on 14 May 2003. The dividend will
be payable to shareholders on the register at the close of
business on 21 February 2003.
6. Unaudited reconciliation of operating loss to operating
cash flow
6 months ended 6 months ended 12 months ended
31 December 31 December 30 June
2002 2001 2002
#'000 #'000 #'000
Operating loss (802) (375) (1,945)
Depreciation charges 2,455 3,345 6,392
Amortisation of goodwill 414 270 3,206
Profit on sale of fixed assets (278) (188) (406)
Decrease/(increase)in stocks 172 75 (40)
Decrease in debtors 1,063 3,927 3,515
Decrease in creditors (2,380) (1,899) (3,624)
(Decrease)/increase in deferred income (96) 229 126
Decrease in provisions (857) (424) (540)
==================================================
Net cash (outflow)/inflow from
operating activities (309) 4,960 6,684
--------------------------------------------------
7.Unaudited reconciliation of net cash flow to movement
in net funds
6 months ended 6 months ended 12 months ended
31 December 2002 31 December 2001 30 June 2002
#'000 #'000 #'000
Decrease in cash in the period (1,763) (1,944) (3,399)
Cash outflow from decrease in lease
financing 5 19 78
Net cash outflow from decrease
in debt funding 450 450 900
Cash (inflow)/outflow from
(decrease)/increase in liquid resources (957) 3,526 (55)
Loan notes issued - (26) (46)
Loan notes redeemed 275 100 4,382
-----------------------------------------------
Change in net funds resulting from
cashflow (1,990) 2,125 1,860
New loan notes - (3,600) (3,599)
-----------------------------------------------
Movement in net funds in period (1,990) (1,475) (1,739)
Opening net funds 7,732 9,471 9,471
===============================================
Closing net funds 5,742 7,996 7,732
-----------------------------------------------
8. Interim and full year results
This report was approved by the Board on 11 February 2003.
The interim figures to 31 December 2002 and 31 December 2001 are
unaudited.
The comparative figures for the year ended 30 June 2002 do not
constitute statutory accounts within the meaning of Section 240 of
the Companies Act 1985 but are extracted from the audited
statutory accounts. Full accounts for that year received an
unqualified audit opinion and did not contain a statement under
Section 237(2) or (3) of the Companies Act 1985. These accounts
have been filed with the Registrar of Companies.
Copies of this report are being sent to all shareholders. Further
copies can be obtained from the Company Secretary at Compel Group
PLC, 6 Meadway Court, Rutherford Close, Stevenage, Hertfordshire,
SG1 2EF.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR URAWROORUAAR