RNS Number:7302N
Comino Group PLC
27 November 2001
Comino Group plc
Interim Results Announcement
Comino Group plc ("Comino"), the provider of software solutions for the local
government, housing association and occupational pensions sectors, announces
Interim Results for the six months ended 30 September 2001.
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 summary
* A difficult trading period with a loss before tax of #1.1m (2000 #1.6
million profit), stated before amortisation of goodwill (#148k) and investment
in the new venture Comino Techflow (#165k) on turnover of #9.3 million (2000 #
9.4 million).
* Order intake rate from Local Government at an acceptable level for
the second quarter.
* Growth expected to recommence by financial year-end in Occupational
Pensions sector.
* Strong services order book and prospects in Social Housing.
* Improving outlook for the second half with an expected return to
profitability for the year as a whole. A healthy medium term growth outlook.
* Dividend maintained at 1.9 pence per share (2000 1.9 pence per share)
reflecting an improving outlook.
* Cash at #4.2 million (2000 #6.8 million) after expenditure on
property and growth infrastructure.
Commenting on the interim period and prospects Chairman David Quysner said:
"In the September trading statement, Comino reported that performance in the
first half of its financial year was significantly below expectation. This
was due to a combination of three factors: a first quarter reduction in the
number of local authority contracts, an increase in development in
occupational pensions and overhead levels which had been set to support strong
growth."
"In recent years, Comino has consistently demonstrated a capacity for growth
and it is disappointing to report a first half loss. However, the Company is
well positioned in markets that have some immunity to short term economic
pressure. We therefore expect to see a return to profitability for the year
as a whole."
Enquiries
Comino plc Binns & Co PR Ltd
Garth Selvey, Chief Tel: 020 7786 9600 on the Peter Binns, Paul McManus
Executive day
Paul Clifford, Finance Thereafter: 01628 525 433 Tel: 020 7786 9600
Director
Editor's notes:
Comino's operating companies are based near Maidenhead and in Leeds, Croydon
and the West Midlands.
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.
Chairman's Statement
As anticipated in the Company's trading statement of 12 September 2001, Comino
has recorded a loss for the first half. However, prospects for the second half
are such that we expect to see a return to profitability for the year as a
whole.
Comino is disappointed to report a loss before tax for the half year to 30
September 2001 of #1.1 million (2000 #1.6 million profit) which is stated
before amortisation of goodwill of #148,000 and before charging costs of #
165,000 associated with the new venture, Comino Techflow.
Turnover for the period was #9.3 million compared with #9.4 million in the
comparable period last year and gross profit margin reduced to 75% (2000 78%).
The results include Saffron for the full period. Overheads were
substantially higher because of the recent investment in building the general
infrastructure of the business necessary for future growth. The minority
interest in Saffron was acquired on 18 May and the operation is now integrated
into Comino plc.
Given the improving outlook, an interim dividend of 1.9p per share, the same
as at this time last year, will be paid on 29 January 2002.
In the September trading statement, Comino reported that performance in the
first half of its financial year was significantly below expectation. This
was due to a combination of three factors: a first quarter reduction in the
number of local authority contracts, an increase in development in
occupational pensions and overhead levels which had been set to support strong
growth.
Order intake from Local Government was particularly poor in the first quarter.
In the second quarter, the order rate returned to an acceptable level but
with many orders arriving too late to allow any revenue to be recognised in
the first half of the year. A contributory factor is believed to have been
that Local Authorities delayed purchasing to meet the July deadline to submit
funding applications for the Implementation of Electronic Government, some of
the proceeds of which will ultimately be spent with Comino.
In the Occupational Pensions sector, the Company underestimated the
development resource that would be needed to deliver new modules for Third
Party Administration. These will significantly enhance the product range in a
sector from which the Company expects to see substantial future growth. In
order to maintain our quality of service to existing customers, development
resource has been diverted into this activity, leaving a reduced capacity for
new business in the short term. The time and costs needed to make this
correction are known and manageable and it is expected that growth will
recommence by the financial year-end. Our customers are very appreciative of
our commitment to understanding and meeting their needs in this area.
New sales into the Social Housing market began the year slowly but there is a
strong services order book and initiatives are in place that should add
significantly to business in the second half.
Comino Techflow is developing products in the area of Professional Services
Automation. This sector is sensitive to economic conditions and the Company
has contained its costs and related development in light of the current
uncertain economic climate.
Towards the end of the last financial year, we had invested heavily in both
staff and infrastructure for growth and expansion. This was a long-term
commitment to the future of Comino and we intend to maintain this investment
in place. Cash at the half-year was #4.2 million compared with #6.8 million a
year earlier. Part of this reduction was attributable to an investment of
some #800,000 in 8,000 sq.ft. of new-build freehold property in the West
Midlands and further expenditure has been incurred on refitting our new office
in Leeds. Our national infrastructure is now substantially complete but there
will be further investment of approximately #600,000 to complete the West
Midlands office in the second half of the current year.
In recent years, Comino has consistently demonstrated a capacity for growth
and it is disappointing to report a first half loss. However, the Company is
well positioned in markets that have some immunity to short term economic
pressure. We therefore expect to see a return to profitability for the year
as a whole.
I would like to thank all our employees for their efforts and commitment and
our customers for their continued support.
David Quysner
Chairman
Consolidated Profit and Loss Account
6 months 6 months Year
to to to
30 30 31
September September March
2001 2000 2001
#'000 #'000 #'000
Turnover
Continuing operations 9,310 8,453 17,984
Acquisitions - 994 3,452
9,310 9,447 21,436
Cost of sales (2,369) (2,120) (4,517)
Gross profit 6,941 7,327 16,919
Administrative expenses (8,487) (6,058) (14,052)
Operating (loss)/profit
Continuing operations (1,546) 1,294 3,200
Acquisitions - (25) (333)
(1,546) 1,269 2,867
Share of (loss)/profit from associate (24) (8) 1
Net interest receivable 129 238 365
(Loss)/profit on ordinary activities before (1,441) 1,499 3,233
taxation
(Loss)/profit on ordinary activities before
taxation analysed between
(Loss)/profit on ordinary activities before
taxation, amortisation of goodwill and
costs of Comino Techflow (1,128) 1,623 3,623
Amortisation of goodwill (148) (124) (277)
Costs of Comino Techflow (165) - (113)
(1,441) 1,499 3,233
Tax on profit on ordinary activities 521 (486) (990)
(Loss)/profit on ordinary activities after (920) 1,013 2,243
taxation
Minority interest - equity 22 5 46
(Loss)/profit for the financial period (898) 1,018 2,289
Dividends (266) (260) (785)
Retained (loss)/profit for the period (1,164) 758 1,504
Earnings per share (6.6p) 7.4p 16.7p
Diluted earnings per share (6.5p) 7.2p 16.3p
Earnings per share excluding goodwill
amortisation (5.6p) 8.3p 18.7p
Dividend per share 1.90p 1.90p 5.70p
The dividend of 1.90 pence per share will be paid on 29 January 2002.
The dividend record date is 4 January 2002.
Consolidated Balance Sheet
30 September 30 September 31 March
2001 2000 2001
#'000 #'000 #'000
Fixed assets
Tangible assets 2,556 1,180 1,421
Intangible assets - goodwill 2,439 1,740 1,991
Investment in associate 999 1,011 1,021
5,994 3,931 4,433
Current assets
Stocks 121 159 67
Debtors & prepayments 6,329 6,438 9,535
Cash at bank and in hand 4,236 6,823 8,136
10,686 13,420 17,738
Creditors falling due within one year (3,343) (5,114) (6,349)
Net current assets 7,343 8,306 11,389
Total assets less current liabilities 13,337 12,237 15,822
Creditors falling due after more than
one year - (513) -
Deferred income (4,867) (3,390) (6,763)
8,470 8,334 9,059
Capital and reserves
Share capital 694 685 690
Share premium reserve 4,773 4,375 4,511
Shares to be issued 360 - -
Profit and loss account 2,660 3,078 3,824
Equity shareholders' funds 8,487 8,138 9,025
Minority interest - equity (17) 196 34
8,470 8,334 9,059
Consolidated Cash Flow Statement
6 months 6 months Year
to to to
30 30 31
September September March
2001 2000 2001
#'000 #'000 #'000
Net cash (outflow)/inflow from operating (2,006) (1,703) 2,172
activities
Net returns on investments and servicing
of finance
Net interest received 129 238 365
129 238 365
Tax paid (129) (574) (1,927)
Capital expenditure
Purchase of tangible fixed assets (1,414) (163) (681)
Sale of tangible fixed assets 48 - 12
Net cash outflow from capital
expenditure (1,366) (163) (669)
Acquisitions and disposals
Purchase of subsidiary undertaking - (1,947) (2,640)
Cash and overdrafts acquired - - 1
Investment in associate - (1,019) (1,020)
- (2,966) (3,659)
Equity dividends paid (528) (424) (684)
Financing
Issue of shares - 2 143
Repayment of borrowings - (21) (39)
Net cash (outflow)/inflow from financing - (19) 104
(Decrease)/increase in cash (3,900) (5,611) (4,298)
Net cash (outflow)/ inflow from operating
activities
Operating (loss)/profit (1,546) 1,269 2,867
Depreciation 246 186 463
Amortisation of goodwill 148 124 277
Profit on sale of fixed assets (15) - (12)
(Increase)/decrease in stocks (54) 170 262
Decrease/(increase) in debtors 3,206 (410) (4,121)
(Decrease)/increase in creditors (2,095) (458) 621
(Decrease)/increase in deferred income (1,896) (2,584) 1,815
Net cash (outflow)/inflow from
operating activities (2,006) (1,703) 2,172
Notes to the Interim Accounts
1. The charge for taxation is based on the expected rate for the
financial year.
2. The calculation of earnings per share for the six months ended 30
September 2001 is based on the loss for the financial period of #920,000 (2000
- profit #1.013,000) and on 13,855,802 (2000 - 13,670,802) ordinary shares
being the average number of shares in issue during the period.
3. The interim statement has been prepared on the same accounting basis
as those set out in the financial statements for the year ended 31 March 2001
and was approved by the board on 26 November 2001. The foregoing financial
information does not represent accounts within S240 of the Companies Act 1985
and has not been reported on by the auditors or delivered to the Registrar of
Companies.
4. Following the adoption of FRS 10 (Goodwill and intangible fixed
assets), goodwill arising on acquisitions has been capitalised and will be
depreciated over its estimated useful economic life. Goodwill previously
eliminated against reserves has not been reinstated.
5. The above results for the year ended 31 March 2001 have been
abridged from the full Group accounts for that year, which received an
unqualified auditors' report and which have been delivered to the Registrar of
Companies.
Independent Review Report to Comino Group plc
Introduction
We have been instructed by the company to review the interim financial
information set out on pages 3 to 6 and we have read the other information
contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance in Bulletin 1999/4 'Review
of Interim Financial Information' issued by the Auditing Practices Board. A
review consists principally of making enquiries of management and applying
analytical procedures to the financial information and underlying financial
data and, based thereon, assessing whether accounting policies and
presentation have been consistently applied unless otherwise disclosed. A
review excludes audit procedures such as tests of control and verification of
assets, liabilities and transactions. It is substantially less in scope than
an audit performed in accordance with Auditing Standards and therefore
provides a lower level of assurance than audit. Accordingly, we do not express
an opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the interim financial information as presented for the six
months ended 30 September 2001.
Grant Thornton
Registered Auditors
Chartered Accountants
London
26 November 2001
Cmo (LSE:CMO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Cmo (LSE:CMO)
Historical Stock Chart
From Jul 2023 to Jul 2024
