TIDMCAE
RNS Number : 0756B
Charteris PLC
28 March 2013
For release at 07.00 28 March 2013
Charteris plc
("Charteris" or the "Company")
Unaudited Interim Report
for the six months ended 31 January 2013
Charteris plc, the business and IT consultancy, announces its
unaudited interim results for the six months to 31 January
2013.
KEY POINTS
.. Revenue of GBP4.8m (H1 2012: GBP4.7m).
.. Loss before taxation was GBP193k (H1 2012: GBP428k loss).
.. Diluted Loss per Share of 0.40p (H1 2012: 1.02p loss).
.. Net cash available at 31 January 2013 was GBP22k (net debt at 31 January 2012: GBP159k).
.. In Microsoft Technologies, sustained demand for
infrastructure, collaboration and cloud technology services, but
margin pressure and softer demand for services associated with
Enterprise Resource Planning.
.. In Business Consulting, key accounts in homeland security and
IT expert offerings provided a solid basis for the business. New
client projects in the private sector, and in local and regional
government, were harder to secure.
Commenting on the results Cliff Preddy, Chairman, said:
"The gradual improvement in the performance of Charteris
continued in the six-month period ended 31 January 2013. Given the
general economic backcloth, markets are likely to remain a
challenge for the rest of the financial year. However, the general
stabilisation of the Company's revenue over an eighteen month
period and the current sales pipeline of weighted prospects for new
business lead to cautious optimism that further improvement in
trading can be delivered during the remainder of the financial
year."
Enquiries:
Allan Barr/Cliff Preddy, Charteris Tel: 020 7600 9199
plc
Roland Cornish/James Biddle, Beaumont Tel: 020 7628 3396
Cornish Limited (Nominated Adviser
and Broker)
Charteris plc Interim Report 2013
The gradual improvement in the performance of Charteris, with
broadly stabilised revenue, continued in the six-month period ended
31 January 2013 (H1 2013), in line with the cautious optimism
expressed in the last annual report. However, background market
conditions continued to be challenging, given the flat nature of
the overall economy, and whilst progress has been made towards the
goal of sustained, profitable month-on-month trading the company
made a small loss in H1 2013.
FINANCIAL SUMMARY
Revenue in H1 2013, of GBP4.8m, was 3% higher than in the
comparable six-month period of the previous financial year (H1
2012: GBP4.7m), with costs some 2% lower. The resulting loss before
taxation was reduced to GBP193k (H1 2012: GBP428k loss) and diluted
loss per share was 0.40p (H1 2012: 1.02p diluted loss).
Net cash at 31 January 2013 was GBP22k (31 January 2012: GBP159k
net debt).
BUSINESS OVERVIEW
Charteris provides business and IT consulting services that help
our clients improve customer service, reduce operational costs, and
manage the successful delivery of organisational change programmes.
Our consultants also provide expert advice during due diligence
exercises, and mediation and expert witness services where problems
have arisen during the execution of other parties' technology
supply contracts.
In addition, the Company is a leading Microsoft "full stack"
systems integrator for the UK mid-market, delivering rapid business
change using the full range of Microsoft's technology and
platforms, including Enterprise Resource Planning (ERP) and
Customer Relationship Management (CRM) applications software
products (Microsoft Dynamics AX and CRM).
Business Consulting
In Local and Regional Government we have helped a number of
local councils with efficiency improvement exercises to achieve
necessary savings without negatively impacting on end user
services. We have also been helping several retailers (with both a
high-street presence and on-line offerings) on business change and
IT consulting assignments. Whilst there have been periods when
utilisation of the specialist consultants employed by the company
for these activities has been subdued, the level of activity has
increased in recent months.
Demand for our programme and project management services has
held up well. Our support on some of the most important homeland
security projects has continued and our list of clients for these
services has expanded.
Our IT expert offering performed strongly in the period and we
have been engaged to advise on a number of important new IT
litigation cases.
As anticipated we have met some of the requirements in the areas
of more buoyant demand by engaging members of our highly selective
group of associate consultants.
Microsoft Technologies
The Company has experienced sustained demand from existing and
new clients who wish to deal with a supplier that can project
manage and deliver integrated solutions incorporating the full
range of Microsoft's business products and services including ERP,
CRM, core infrastructure, collaboration, .Net development, unified
communications and cloud technology.
Charteris has productive links with Microsoft which are much
appreciated by the Company. These ties, taken together with
targeted initiatives with selected partners who also have a strong
interest in Microsoft Technology, have aided a successful
broadening of our client base for these services, and several early
stage assignments have potential for growth into significant
accounts.
During the period we benefited from key account revenues for
Advanced Microsoft Consulting services from clients in banking,
financial services, local government and support services.
Utilisation of the team members who provide these services was high
and overall financial performance was generally satisfactory.
However, margins on some of our projects in the Microsoft Dynamics
area came under pressure, and whilst we have a number of good
prospects for new business of this nature there have been some
delays in contract decisions, resulting in lower revenues than
expected.
FINANCING
The Company meets its day-to-day working capital requirements by
means of an invoice discounting facility of up to GBP1.25m (31
January 2012: GBP1.5m). The net cash of GBP22k at 31 January 2013
comprised cash of GBP317k (31 January 2012: GBP257k) offset by
drawdown against this facility of GBP295k (31 January 2012:
GBP416k).
The Board regularly reviews the adequacy of financial resources
available. Particularly in the current economic conditions, there
is inherent uncertainty over the commencement of projects, timing
of cash flow arising from clients thereafter and the availability
of alternative or additional finance should this be required.
Therefore the Directors continue to consider a number of options
relating to these issues. Taking into account actions that could be
taken in response to reasonable cash flow sensitivities, the
Directors believe that the Company will continue to operate within
its agreed facilities.
BOARD COMPOSITION
Patrick Carter resigned as a director on 30 November 2012 in
order to take up a finance director role within the renewable
energy sector. Patrick served as Finance Director from May 2007. We
wish him all the best in his future endeavours.
Julie Merry joined Charteris during November 2012 and has taken
over the finance director's responsibilities. She has been
appointed Company Secretary.
STAFF
The Company's staff and their skills and experience are our key
asset. The Directors wish to thank them for their individual and
team contributions, and for their commitment to providing excellent
levels of service to clients.
ADVISORS
The Directors are pleased to have appointed the specialist
boutique technology merchant bank, Restoration Partners, to advise
the Company on its near and medium term corporate strategy, and to
ensure that Charteris continues to seek to maximise shareholder
value.
OUTLOOK
Given the general economic backcloth, markets are likely to
remain a challenge for the rest of the financial year. However, the
general stabilisation of the Company's revenue over an eighteen
month period and the current sales pipeline of weighted prospects
for new business lead to cautious optimism that further improvement
in trading can be delivered during the remainder of the financial
year.
Cliff Preddy
Chairman
27 March 2013
CONSOLIDATED INCOME STATEMENT
6 mths 6 mths Year ended
ended ended
31 Jan 31 Jan 31 Jul
2013 (Unaudited) 2012 (Unaudited) 2012 (Audited)
GBP'000 GBP'000 GBP'000
Notes
Continuing operations
Revenue 4,813 4,683 9,569
_____ _____ _____
Other external charges (1,196) (958) (2,079)
Staff costs (3,225) (3,310) (6,368)
Administrative expenses (573) (826) (1,510)
______ ______ ______
(4,994) (5,094) (9,957)
Operating loss before
exceptional
items (181) (379) (356)
Redundancy costs - (32) (32)
-------------------------------- ------ ----------------------- -------------------------- -----------------------
Operating loss (181) (411) (388)
Finance costs (12) (17) (30)
Loss before taxation and
exceptional items (193) (396) (386)
Redundancy costs - (32) (32)
-------------------------------- ------ ----------------------- -------------------------- -----------------------
Loss before taxation (193) (428) (418)
Taxation - 8 -
_____ _____ _____
Loss for the financial period
attributable to owners of
the parent (193) (420) (418)
_____ _____ _____
Loss per share
Basic and diluted 2 (0.40)p (1.02)p (0.96)p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
31 Jan 31 Jan 31 Jul
2013 (Unaudited) 2012 (Unaudited) 2012 (Audited)
GBP'000 GBP'000 GBP'000
Loss for the financial period (193) (420) (418)
_____ _____ _____
Total comprehensive income
for the period attributable
to owners of the parent (193) (420) (418)
_____ _____ _____
CONSOLIDATED BALANCE SHEET
31 Jan 31 Jan 31 July
2013 (Unaudited) 2012 (Unaudited) 2012 (Audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 3,979 3,979 3,979
Other intangible assets - 43 9
Property, plant and equipment 94 63 110
Deferred tax asset 1 34 1
4,074 4,119 4,099
Current assets
Trade and other receivables 2,212 2,186 2,084
Cash and cash equivalents 317 257 374
2,529 2,443 2,458
Total assets 6,603 6,562 6,557
Current liabilities
Invoice discounting facility (295) (416) (457)
Trade and other payables (2,306) (2,118) (1,905)
Provisions - (10) -
(2,601) (2,544) (2,362)
Total assets less current
liabilities 4,002 4,018 4,195
Non-current liabilities
Deferred tax liability (1) (26) (1)
(1) (26) (1)
Net assets 4,001 3,992 4,194
Equity attributable to
owners of the parent
Called up share capital 503 434 503
Share premium account 2,742 2,606 2,742
Merger reserve 2,573 2,573 2,573
ESOP reserve (194) (194) (194)
Other reserve 26 26 26
Retained earnings (1,649) (1,453) (1,456)
Total equity 4,001 3,992 4,194
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the equity owners of the parent
Share Share Merger Other Retained ESOP Total
capital premium reserve reserve earnings Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 July 2011
(audited) 434 2,606 2,573 26 (1,033) (194) 4,412
Comprehensive
income
Loss for the
period - - - - (420) - (420)
_____ _____ _____ _____ _____ _____ _____
Total
comprehensive
income for the
period - - - - (420) - (420)
31 January 2012
(unaudited) 434 2,606 2,573 26 (1,453) (194) 3,992
Comprehensive
income
Loss for the
period - - - - 2 - 2
_____ _____ _____ _____ _____ _____ _____
Total
comprehensive
income for the
period - - - - 2 - 2
Transactions
with
Owners
Share-based
payment
charge - - - - (5) - (5)
Issue of
shares 69 136 - - - - 205
_____ _____ _____ _____ _____ _____ _____
Total
transactions
with Owners 69 136 - - (5) - 200
_____ _____ _____ _____ _____ _____ _____
31 July 2012
(audited) 503 2,742 2,573 26 (1,456) (194) 4,194
Comprehensive
income
Loss for the
period - - - - (193) - (193)
_____ _____ _____ _____ _____ _____ _____
Total
comprehensive
income for the
period - - - - (193) - (193)
31 January 2013
(unaudited) 503 2,742 2,573 26 (1,649) (194) 4,001
CONSOLIDATED STATEMENT OF CASH FLOWS
6 mths 6 mths Year ended
ended ended
31 Jan 31 Jan 31 Jul
2013 (Unaudited) 2012 (Unaudited) 2012 (Audited)
GBP'000 GBP'000 GBP'000
Loss before taxation (193) (428) (418)
Adjustments for:
Depreciation of property,
plant and
equipment 34 6 39
Amortisation of intangible
assets 9 39 69
Share-based payments - - (5)
Net interest expense 12 17 30
______ ______ ______
Operating cash flows before
movements
in working capital (138) (366) (285)
(Increase)/Decrease in
receivables (128) 177 264
Increase/(Decrease) in payables 401 (809) (502)
______ ______ ______
Cash inflow/(outflow) from
operations 135 (998) (523)
Interest paid (12) (17) (30)
______ ______
Net cash inflow/(outflow) from
operating
activities 123 (1,015) (553)
______ ______
Investing activities
Disposal of property, plant
and equipment and software - 225 216
VAT on disposal of property - - (515)
Purchase of property, plant
and equipment and software (18) (61) (128)
Cash generated/(used) by
investing
activities (18) 164 (427)
Financing activities
Issue of shares - - 205
Net cash inflow from financing
activities - - 205
Net increase/(decrease) in cash
and
cash equivalents 105 (851) (775)
Cash and cash equivalents at
the beginning
of the period (83) 692 692
Cash and cash equivalents at
the end
of the period 22 (159) (83)
Consisting of:
Cash at bank 317 257 374
Invoice discounting facility (295) (416) (457)
22 (159) (83)
Notes
1. ACCOUNTING POLICIES
The consolidated financial information contained in this interim
report does not constitute statutory financial statements. The
interim results, which have not been audited, have been prepared
using accounting policies which are consistent with International
Financial Reporting Standards as adopted by the European Union
("IFRS"). The financial statements for the year ended 31 July 2012
have been filed with the Registrar of Companies and received an
unqualified audit report which did not contain a statement under
sections 498(2) or (3) of the Companies Act 2006.
Measurement convention
The financial information is prepared on the historical cost
basis except that the following assets and liabilities are stated
at their fair value: financial assets classified as fair value
through profit or loss or as available-for-sale.
Basis of consolidation
The acquisition method of accounting has been used to account
for the acquisition of subsidiaries by the group. The costs of an
acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are
initially measured at fair value at the acquisition date
irrespective of the extent of any minority interest.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Principal activity
The principal activity of the Company is to provide consultancy
services which help clients improve business performance and create
new business opportunities through the effective application of
information technology.
2. LOSS PER SHARE
The calculations of loss per share are based on the following
losses and numbers of shares.
6 mths 6 mths Year ended
ended ended
31 Jan 31 Jan 31 Jul
2013 (Unaudited) 2012 (Unaudited) 2012 (Audited)
GBP'000 GBP'000 GBP'000
Loss after tax for the financial
year before exceptional charges (193) (388) (386)
Redundancy costs - (32) (32)
Loss after tax for the financial
year (193) (420) (418)
The weighted average number of shares for the purposes of basic
earnings per share, excluding those owned by the Group's employee
benefit trust, are:
6 mths 6 mths 12 mths
ended 31 ended 31 ended 31
Jan 2013 Jan 2012 July 2012
(Unaudited) (Unaudited) (Audited)
Weighted average number of No. of No. of No. of
shares shares shares shares
'000 '000 '000
For basic earnings per share 47,938 41,089 43,725
Potentially dilutive effect
of share options 898 1,223 1,597
For diluted earnings per share 48,836 42,312 45,322
Basic and diluted (0.40)p (1.02)p (0.96)p
Basic and diluted before exceptional
charges (0.40)p (0.94)p (0.88)p
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for the purposes of calculating
the diluted loss per share are identical to those used for basic
loss per ordinary share. This is because the exercise of share
options and other benefits would have the effect of reducing loss
per share and is therefore not dilutive under the terms of IAS33
Earnings per share.
3. INTERIM FINANCIAL INFORMATION
The interim financial information was approved by the directors
on 27 March 2013. The Company expects to announce its full year
results in November 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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