RNS Number:8327E
Comino Group PLC
7 June 2001
7 June 2001
COMINO GROUP PLC: FINAL RESULTS
Results in line with expectations
Core profits up 24% to #3.62m; Dividend up 23%
Comino Group plc (Comino), the provider of software based business solutions
for occupational pensions, social housing and local authorities, announces
Final Results for the year ended 31 March 2001. These results are in line with
expectations and have been achieved during a difficult year for the industry
in general.
Comino is a market leader in each of its chosen sectors and owns its own
workflow and electronic document management software which it uses to provide
process based applications. Workflow and Electronic Document Management are
increasingly regarded as essential to any successfully automated business
process.
Results are in line with expectations. Underlying core profit growth, up 24%,
is strong and set to continue. However, the disposal of one non-core activity
and its associated profit element, the acquisition of Saffron Computer
Services and the investment in Comino Techflow, all need to be taken into
account when comparing results for the year just ended with those of the
previous year.
31 March 31 March
2001 2000
#m #m
* Profit from Ongoing operations 3.62 2.92
Discontinued operations - 0.55
Comino Techflow (0.11) -
Profits before tax and amortisation 3.51 3.47
of goodwill
Amortisation of goodwill (0.28) -
Profit before tax after amortisation of 3.23 3.47
goodwill
Exceptional item on disposal - 2.55
* Turnover 21.4 20.5
* Gross profit margin 79% 69%
* Cash after acquisition, investment and gains 8.1 12.4
tax on disposal
* Adjusted EPS 18.7p 17.9p
* Total dividend 5.70p 4.65p
- Local authority "revenue & benefit" systems now exceed 70
installations.
- Pensions contract of #1.3m with the Merchant Navy Pensions
Administration.
- Significant orders for Universal Housing culminating in May 2001 #1m
order from London & Quadrant.
- New 'managed service' contracts and potential from Saffron acquisition.
- High recurring revenues.
- Strong Group order book.
In his Statement, David Quysner, Chairman, said:
"In a year that proved difficult for the 'technology' sector in general,
Comino grew its business in its three core markets: Occupational Pensions,
Social Housing and Local Government. Comino has a strong technology base, this
being allied with an in-depth understanding of the needs of customers, to whom
it is able to deliver effective and durable computerised business solutions."
Regarding Prospects, Garth Selvey, Group Chief Executive said:
"Comino now serves some 400 organisations across its three sectors. Our
products and services continue to be extended and our customers increasingly
regard us as a key part of their corporate plan. We have modern solutions in
all our sectors to help us achieve our targets for the coming year."
Enquiries
Comino plc Binns & Co PR Ltd
Garth Selvey, Tel: 020 7786 9600 on the day Peter Binns, Paul McManus
Chief Executive Tel: 020 7786 9600
Paul Clifford, Thereafter: 01628 525 433
Finance Director
Editor's notes:
Comino's operating companies are based near Maidenhead and in Leeds, Croydon
and Dudley. The Leeds and Dudley offices are new offices, and have replaced
smaller premises in Leeds and the present West Midlands locations,
respectively.
Comino provide workflow and electronic data management systems to over 400
organisations in Occupational Pensions, Social Housing and Local Government:
* Comino serves some 50 organisations looking after more than 1.2
million pensioners. Three of these organisations manage more than 170,000
pension accounts each. Its new Universal Pensions Management (UPM) was
awarded the 'software & systems provider of the year' award in 2000 and 2001
by Professional Pensions.
* Comino serves some 250 Registered Social Landlords looking after more
than 800,000 homes and some two million occupants. The largest
organisation Comino's systems handle has 55,000 homes; the smallest just a
few hundred.
* Comino serves over 70 Local Authority Revenue and Benefit
departments who look after more than four million council tax payers,
business rate payers and benefit recipients.
COMINO GROUP PLC: FINAL RESULTS
Chairman's Statement
The Comino Group has continued to make excellent progress and I am pleased to
report on a further year of strong financial performance with results in line
with expectations.
In a year that proved difficult for the "technology" sector in general, Comino
was able to grow its business in the Occupational Pensions, Social Housing and
Local Government markets that it serves. Comino has a strong technology base
but this is allied with an in-depth understanding of the needs of customers,
to whom it is able to deliver effective and durable computerised business
solutions.
The year began with a streamlined business following the disposal of non-core
activity. In July 2000, the Company acquired Saffron Computer Services
Limited, which operates in the Local Authority market, and later in the year
announced an investment in Comino Techflow which is working on an important
new product for the Group. The disposal of the non-core activity and its
associated profit element, the acquisition of Saffron and the investment in
Comino Techflow all need to be taken into account when comparing results for
the year just ended with those of the previous year.
In the year ended 31 March 2001, profit before tax, amortisation of goodwill
and the investment in Comino Techflow was #3.62m which compares with #2.92m in
the previous year, the latter figure excluding #0.55m of profit attributable
to discontinued operations. This 24% year-on-year increase illustrates the
strength of the core business. After the initial investment in Comino Techflow
but still before goodwill, the profit figure reduces to #3.51m (2000 -
#3.47m). A goodwill charge of #0.28m (2000 - nil) applies in respect of the
Saffron acquisition.
Adjusted earnings per share of 18.7 pence compared with 17.9 pence the
previous year but the latter took account of the #0.55m profits attributable
to discontinued operations, which have been more than replaced by growth in
the continuing core business. The proposed final dividend of 3.8 pence per
share will take the total to 5.7 pence (2000 4.65p). This dividend increase of
23% is seen as commensurate with the strong core growth.
The cash at the end of the previous year was exceptionally high at #12.4m
following the disposal. The present level of #8.1m is very healthy after
taking into account payments for the Saffron acquisition, the investment in
Comino Montal and taxation.
Sales to Local Government revenue & benefit departments continued with some 16
new authorities added to the customer list. In addition to these new name
sales, emphasis will now be placed not only on new and improved departmental
sales but also on corporate sales to Local Authorities. These corporate sales
provide organisational efficiencies for the authority as a whole, as well as
better interdepartmental communication. They mirror the government initiatives
to enhance local government information technology.
Although Saffron won significant Managed Service contracts with Medway,
Sevenoaks, and Salford, it also suffered higher than expected operating costs
resulting in a #220k loss rather than an expected break-even. From 18 May
2001, Saffron became wholly owned by the Comino Group and will now be fully
integrated to bring Managed Services to the whole Comino customer base.
Housing took time, post millennium, to resume high business levels but
finished strongly to take significant new orders for Universal Housing from
existing long standing customers such as Broomleigh, Longhurst and
Shaftesbury. In early May 2001, some two hundred and fifty members of the
Social Housing user group attended the formal launch of Universal Housing to
see a product offering transformed by our process-based workflow technology.
Innovation continues and Comino Montal is now providing expertise for set-top
TV access to tenant information and the internet.
The Group committed to a 19,000 square foot lease on office space in Leeds and
to a newly-built office in Dudley to replace the present West Midlands
location. This now gives us centres near Maidenhead, in Leeds, Dudley and
Croydon.
Comino Montal has recently underpinned this infrastructure by installing a
major new communications network which has customer as well as internal
capacity. This will allow Comino Montal to offer 'distance independent
pricing' for customer network connections, a major cost factor in offering
server management facilities and software rental to geographically distant
organisations.
The Occupational Pensions operation won significant contracts with Ford Motor
Company and with the Merchant Navy Pension Administration (MNPA). Comino
proved its excellence in development by winning the pensions industry Software
and Systems Supplier of the Year award for the second year running and its new
customer, MNPA, won the award for Administrator of the Year.
The year-end order book closed in a healthy state and a #1m contract from
London & Quadrant Housing has further improved this situation. Contracted
annual support still covers half of our overheads and this generally strong
position allows us to manage our business with confidence.
During the year, we were pleased to welcome Mark Boleat, as a non-executive
director, to the group board and now welcome David Roots, presently a director
of Comino plc, with effect from today. David will bring his extensive
operational experience to the group board.
Once again, we are indebted to our staff and customers for their unwavering
support and enthusiasm. With these assets, we can look forward to the future
positively and remain confident that we can drive the Comino Group forward to
new successes.
David Quysner
Chairman
Consolidated Balance Sheet
At 31 March 2001
2001 2000
#000 #000
Fixed Assets
Intangible assets 1,991 -
Tangible assets 1,421 665
Investment in associate 1,021 -
4,433 665
Current assets
Stocks 67 329
Debtors 9,535 4,421
Cash at bank and in hand 8,136 12,434
17,738 17,184
Creditors: amounts falling due within one year (6,349) (5,507)
Net current assets 11,389 11,677
Total assets less current liabilities 15,822 12,342
Creditors: amounts falling due after more than - (16)
one year
Deferred income (6,763) (4,948)
9,059 7,378
Capital and reserves
Share capital 690 683
Share premium reserve 4,511 4,375
Profit and loss account 3,824 2,320
Shareholders' Funds 9,025 7,378
Minority Interest - equity 34 -
9,059 7,378
Consolidated Profit and Loss Account
for the year ended 31 March 2001
2001 2000
#000 #000
Turnover
Continuing operations 17,984 17,125
Acquisitions 3,452 -
21,436 17,125
Discontinued operations - 3,327
21,436 20,452
Cost of sales (4,517) (6,236)
Gross profit 16,919 14,216
Administrative expenses (14,052) (11,110)
Operating Profit
Continuing operations 3,200 2,558
Acquisitions (333) -
2,867 2,558
Discontinued operations - 548
2,867 3,106
Share of operating profit of associate 1 -
Exceptional item
Profit on disposal of subsidiary undertaking - 2,549
Interest payable (19) (4)
Interest receivable 384 369
Profit on ordinary activities before taxation 3,233 6,020
Tax on profit on ordinary activities (990) (1,834)
Profit on ordinary activities after taxation 2,243 4,186
Minority interest 46 -
Profit for the financial year 2,289 4,186
Dividends (785) (635)
Profit retained for the financial year 1,504 3,551
Basic earnings per share 16.7p 30.8p
Diluted earnings per share 16.3p 29.9p
Adjusted earnings per share 18.7p 17.9p
The Group had no recognised gains or losses during the year ended 31 March
2001 other than the profit for the year.
Consolidated cash flow statement
for the year ended 31 March 2001
2001 2000
#000 #000
Net cash inflow from operating activities 2,172 3,044
Returns on investment and servicing of finance
Interest received 384 369
Interest paid (19) (4)
Net cash inflow from returns on investments
and servicing of finance 365 365
Taxation (1,927) (647)
Capital expenditure
Purchase of tangible fixed assets (681) (512)
Sale of tangible fixed assets 12 15
Net cash outflow from capital expenditure (669) (497)
Acquisitions and disposals
(Purchase)/Disposal of subsidiary (2,640) 3,277
undertaking
Cash and overdrafts acquired 1 -
Investment in associate (1,020) -
Net cash (outflow)/inflow from acquisitions (3,659) 3,277
and disposals
Equity dividends paid (684) (550)
Financing
Issue of shares 143 46
Repayment of borrowings (39) (53)
Net cash inflow/(outflow) from financing 104 (7)
(Decrease)/Increase in cash (4,298) 4,985
Notes
1. Earnings per ordinary share have been calculated on the profit
for the financial year of #2,289,000 after taxation and minority interest and
on 13,708,778 ordinary shares being the weighted number of ordinary shares in
issue during the year. The calculation of diluted earnings per share takes
account of share options that do not currently rank for dividends but may do
so in the future. The adjusted earnings per share excludes amortisation of
goodwill of #277,000 and in the year ended 31 March 2000 excludes the profit
after tax of #1,750,000 on the disposal of Prologic Computer Consultants
Limited.
2. The financial information set out above does not constitute the
statutory accounts for the period ended 31 March 2001 within the meaning of
Section 240 of the Companies Act 1985. Statutory accounts for the year will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
3. The annual report and accounts will be posted to shareholders
on 7 June 2001 and will also be available on request from the company's
registered office, Comino House, Furlong Road, Bourne End, Buckinghamshire,
SL8 5AQ
4. The directors are recommending a final dividend of 3.80p per
share which, if approved, will be paid on 27 July 2001 to shareholders on the
register on 29 June 2001.
5. The Annual General Meeting will be held at Binns & Co, 16 St
Helen's Place, London, EC3A 6DF on Friday 6 July, 2001 at 11.30 am.
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