6th Mar 2006 07:02
Calyx Group PLC06 March 2006 For Immediate Release Monday 6 March 2006 CALYX GROUP PLC ("Calyx", "the Group" or "the Company") Preliminary Results for the Year Ended December 2005 Calyx, the largest single-source provider of information and communicationtechnology ("ICT") network solutions throughout Ireland, today announces itspreliminary results, for the year ended 31 December 2005, since its successfulIPO and fund raising in March 2005. Calyx provides a suite of high quality ICT products and services, includingvoice and data network design, supply and management, technical help desks,field support, consultancy and training services. Through a menu of optionsCalyx provides individual elements of support right up to supporting andmanaging the customer's entire ICT infrastructure. Financial Highlights: •Revenue up 12% to €38.4 million (2004: €34.2 million) •Gross Margin up 1.9% to 38.7% (2004: 36.8%) •Profit from operations increased by 40% to €3.12 million (2004: €2.23 million) •Profit before tax up 9.6% to €1.74 million (2004: €1.59 million) •EBITDA up 32% to €4.6 million (2004: €3.5 million) Operational Highlights: •Successful IPO and admission to AIM in March 2005, raising €10.5 million (£7.25 million) •Three acquisitions completed and successfully integrated into the Group - including the first acquisition of a UK based company £££1.2 million Network Operating Centre facility completed and operational •Calyx's largest acquisition to date, that of Entropy the Dublin based IT security specialist, completed post year end in March 2006 Commenting on the strong preliminary results Maurice Healy, Chief Executive ofCalyx, said: "2005 has been a very successful year for Calyx. Having completed a successfulIPO in March we also developed our Network Operating Centre ("NOC") andcompleted and integrated three acquisitions, one of which brought us into the UKmarketplace for the first time. It is a testament to the strength of ourmanagement team that along with this busy corporate activity the core businessdelivered both revenue growth and an increase in gross margins in a competitivemarket. We begin 2006 in a very strong position and look forward with confidence to thecoming year with our NOC providing new and higher margin products, for which weare experiencing strong customer demand. 2006 will also provide a full year ofcontribution from our 3 acquisitions which have provided us with new skills, newmanagement talent and tremendously loyal customers. We continue to differentiateourselves from the competition with our high level of both voice and dataskills. This becomes increasingly important as the VoIP market continues to growand converged solutions are in increasing demand." For further details please contact:Calyx Group plc Tel: +353 1 676 3363Maurice Healy, Chief Executive Buchanan Communications Tel: +44 (0)20 7466 5000Tim Thompson / James Strong NOTES TO EDITORS About Calyx - Calyx is the largest single-source provider of information andcommunication technology ("ICT") network solutions throughout Ireland andincludes the largest technical training operation in Ireland. Calyx isheadquartered in Dublin, and has offices in Cork, Limerick and Swindon. Thefourth, latest and largest acquisition by Calyx, of Entropy Ireland's leading ITsecurity specialist, was completed earlier last week. Chairman's Statement During 2005 we continued to grow our revenues both organically and throughacquisition. We continued to focus on margin enhancement through the ongoingexpansion in the range of services available to our customers. New products andservices were primarily driven by the development of our Network OperatingCentre (NOC). Strategy Calyx continues to benefit from the growth of the European market for networkedICT services. The key drivers of this market stem from the continued adoption ofa "multi-sourcing" business model by our customers and the migration fromtraditional voice only services to networked ICT services. Calyx provides itsclients with a flexible managed service offering that can be tailored to theirever changing needs. This is an important requirement for our customers as theyfind their communications and ICT needs increasing and converging. Thisincreasing complexity of solutions is attracting customers to Calyx's resourceand knowledge capability. In addition the increased stipulation for information security has led ourcustomers to demand higher levels of expertise as they strive to meet complianceobligations and to adopt best practice frameworks such as BS7799. Calyx willdevelop its already significant security capability and build the necessaryscale required to deliver these security services to meet the markets multi sitenetworked ICT services needs. Network Operations Centre We invested over €1.2 million in a state of the art Network Operations Centre(NOC) specifically to look after the growing requirement from our clients tooutsource their ICT management. Partnering with a number of leading third partyvendors such as Microsoft, Castlerock, Altiris and iQuate, we have developed aservice that will monitor and protect our clients IT network 24x7x365 to deliverreduced costs, increased efficiencies and take the risk out of their ITenvironment. We focus on a partnership approach with all of our customers. Using field-testedand proven processes, our Managed Service Solutions are designed to meet ourcustomers specific business needs. Acquisitions/Alliances The acquisition of Convergent was completed on 8 July 2005 and has beensuccessfully integrated into the Group. Convergent brought a high level ofprofessional telephony services into the Group along with a blue chip clientbase. All Convergent staff are now operating from our facility in Dublin andsubsequent savings and performance are in line with management expectations. The acquisition of Quality Care Limited ("QCL") in Cork was completed on the 19October 2005 and further broadened the Group's geographic footprint in the Southof Ireland whilst bringing subsequent synergies to our existing offering. Thisentire business has already been successfully incorporated in to our newfacility in Cork. Our initial entry into the UK market began with the completion of theacquisition of ITS Ltd on the 24 October 2005. ITS operates out of Swindon andprovides us with a hugely strategic foothold in the UK marketplace and willallow us to expand our business and services within the UK market, in particularour NOC services. The MD, Kieran Archer, has 25 years experience and hasdemonstrated his significant capability in the development of our UK strategy.The UK provides a tremendous growth opportunity to the Group, a market which wewill aggressively address going forward. Post period transactions Acquisition of Entropy Last week we completed our largest acquisition to date that of Entropy Limited.Entropy is Ireland's leading IT security specialist and delivers securitysolutions which help clients, across all industries, secure their businessassets. Entropy designs, implements and manages the security of complex networksand has strong relationships with all the top security providers. Conall Lavery,who will remain as MD of Entropy, has 30 years experience in the IT industry andis a recognised specialist in the security industry. The addition of Entropy to Calyx positions the enlarged Group to meet thegrowing demand for services as companies in the UK and Ireland adopt a "zerotolerance" approach to the security and integration of their I.T. networks andinfrastructures. The combination of Entropy's capability and the existing Calyxresource has created a very significant presence in the UK and Irish securityservices sector. BT Agreement At the beginning of the year Calyx announced the launch of a uniquecommunications package to small and medium business across Ireland inconjunction with BT (Ireland), the wholly owned subsidiary of BT Group plc oneof the world's leading providers of communications solutions. The solution, 'Exchange', is the only office communications solution of its kindin Ireland that bundles the communications requirements of SMEs into one packagefor a fixed monthly price. The new service includes a VoIP enabled-telephonesystem, handsets, broadband and ISDN line rental, voice service, softwareupdates and a comprehensive technical support and maintenance agreement. The service was developed after market research showed a gap in the market forSMEs to source their entire communications needs from one supplier. Theadvantages of a 'single point of contact' include supplier rationalisation,greater transparency of telecoms charges and equipment and better costmanagement. Businesses are also freed up to concentrate on their core businessand not on managing their communications systems. Management As the Group experiences a strong increase in demand for our services coupledwith the continuing expansion of the Group in Ireland and our accelerated UKexpansion we have made certain management changes. From 1 April Judith O'Brien,who currently holds the position of Managing Director, will be appointed ChiefOperating Officer (COO). Ger Coakley will assume the role of Managing Director(Ireland) and Kieran Archer, formerly MD of ITS, assumes the role of ManagingDirector (UK). We are in the process of appointing a new Group FinanceDirector, a position which Ger Coakley previously occupied. Employees This year has seen some frenetic corporate activity. The IPO and admission toAIM, three acquisitions and a complex deal negotiated with BT (Ireland). Toaccomplish all of this and not lose focus on the core business requires atalented and committed team. The hard work and dedication of all of our employees has been the reason for thecompany's success in this our first year as a PLC. I want to sincerely thankthem for their enormous efforts this year. Outlook Calyx operates in a highly competitive market. However with our the acquisitionsbedded in, an expanding customer base, the NOC up and running, our enhancedservice offering and a strengthened management team we look forward to buildingon last year's success and view the coming year with confidence. Maurice HealyChairman5 March 2006 Financial Review Group turnover rose by 12% to €38.4 million (2004: €34.2 million) including acontribution from the acquisitions of QCL (the IT product and services company)ITS (the UK-based IT infrastructure services Company) and Convergent (a leadingsupplier of communication solutions) of €1.78 million. The underlying organicgrowth in turnover excluding acquisitions was 7%. Profit from operations before share option charges and amortisation of acquiredintangibles rose by 35% to €3.82 million (2004: €2.83 million). Profit fromoperations after share option charges and amortisation of acquired intangibleswas €3.12 million (2004: • 2.23million), and profit before tax increased by 9.6%to €1.74 million (2004: €1.59 million). Basic earnings per share was 4.01c with adjusted diluted earnings per shareexcluding share option charges and amortisation of acquired intangibles was6.54c. The Group's cash position changed from net cash of €10.9 million at the start ofthe period to €6.9 million due to the IPO inflow of €9.14 million and additionallong term funding inflow of €4.3 million and the acquisitions outflow of €4.046million including costs, capital investment of €1.68 million and a decrease indebt financing of €2.1 million. The net cash inflow, excluding acquisitions, was€2.3 million. During the period we continued to concentrate our efforts on developing ourservices revenue. Our contracted revenue rose from €5.3 million to €6.12 millionwith deferred income rising from €2.3 million to €3.1 million. Services revenueas a whole rose 75% from €2.4 million to €4.2 million which accounts in largepart for our increase in operating profit. We continue to differentiate ourselves from the competition with our high levelof both voice and data skills. This becomes increasingly important as the VoIPmarket continues to grow and converged solutions are in increasing demand. Ger CoakleyFinancial Director Calyx Group Plc and its subsidiary companies Consolidated profit and loss account for the year ended 31 December, 2005 2005 2004 • • • •TurnoverContinuing operations 36,625,738 33,971,489Acquisitions 1,784,139 264,717 --------- --------- 38,409,877 34,236,206Cost of sales (23,553,730) (21,628,842) --------- ---------Gross profit 14,856,147 12,607,364 Operating expenses (11,040,443) (9,778,912) --------- --------- --------- ---------Operating profit beforeexceptional administrationcosts and goodwill amortisationContinuing operations 3,800,927 2,774,741Acquisitions 14,777 53,711 --------- --------- 3,815,704 2,828,452 Share option charges (31,036) -Goodwill amortisation (667,274) (595,918) --------- --------- Operating profit 3,117,394 2,232,534 Profit on disposal of 7,847 34,213fixed assetsExceptional reorganisation (576,255) -costs --------- --------- --------- ---------Profit on ordinary activitiesbefore 2,548,986 2,266,747interestInterest receivable 73,329 21,829Interest payable and (879,070) (698,392)similar charges --------- --------- --------- ---------Profit on ordinary activitiesbefore 1,743,245 1,590,184taxationTaxation (298,541) (1,138) --------- --------- Retained profit for the financial yearattributable to equity shareholders 1,444,704 1,589,046 ========= ========= Basic earnings per share 4.01c 6.36c The group had no recognised gains or losses other than the profit for the yearas disclosed above. Calyx Group Plc and its subsidiary companies Statement of total recognised gains and losses for the year ended 31 December 2005 2005 2004 • •Profit for the year 1,444,704 1,589,046 Currency translation effects:On foreign currency net investments (1,865) - ----------- ----------Total recognised gains for the year 1,442,839 1,589,046 ----------- ---------- Note of historical cost profit and losses: The difference between the reported profits and those calculated on anunmodified historical cost basis is not material. Reconciliation of movement in equity shareholder's funds for the year ended 31 December 2005 As restated 2005 As restated 2004 • • Total recognised gains and losses for the year 1,442,839 1,589,046 Transactions with shareholdersNominal value of shares issued - Calyx Limited 28 -Nominal value of share issued - Calyx Group plc 1,359,258 - Replacement of shares in Calyx Limited and CalyxComputers Limited (441) -Premium on shares issued 9,837,473 -Redemption premium - - Other movements - -Share issue costs (1,353,267) -Share option reserve 31,036 - Net increase in shareholders' funds/(deficit) 11,316,926 1,589,046 Opening equity shareholders' funds/(deficit) 745,158 (843,888) Closing shareholders' funds/(deficit) 12,062,084 745,158 Calyx Group Plc and its subsidiary companies Consolidated balance sheet for the year ended 31 December 2005 2005 Restated 2004 • •Fixed assetsTangible assets 3,076,228 2,061,464Intangible assets 16,402,233 10,832,414 ----------- ---------- 19,478,461 12,893,878 ----------- ----------Current assetsStocks 2,133,855 1,568,799Debtors 9,751,468 6,719,902Cash at bank and in hand 6,461,613 1,115,505 ----------- ---------- 18,346,936 9,404,206 Creditors: amounts falling due within one year (15,819,423) (14,154,711) ----------- ---------- Net current assets/(liabilities) 2,527,513 (4,750,505) ----------- ---------- Total assets less current liabilities 22,005,974 8,143,373 Creditors: amounts falling due after more than oneyear (9,943,890) (7,398,215) ----------- ---------- Net assets 12,062,084 745,158 =========== ==========Capital and reservesCalled up share capital 3,857,817 2,539,091Share premium 8,484,207 -Profit and loss account 2,187,583 704,626Merger reserve (2,498,559) (2,498,559)Share option reserve 31,036 - ----------- ---------- Equity shareholders' funds 12,062,084 745,158 =========== ========== Calyx Group Plc and its subsidiary companies Consolidated cash flow statement for the year ended 31 December 2005 2005 2004 • • Net cash inflow/(outflow) from operating activities 2,312,985 2,632,991Servicing of finance and returns on investments (633,741) (676,563)Taxation 27,896 -Capital expenditure and financial investment (1,677,045) (797,629)Acquisitions and disposals (4,046,915) (51,629) ----------- ---------- Net cash inflow/(outflow) before financing (4,016,821) 1,107,170 Financing 10,935,557 (2,255,845) ----------- ---------- Increase/(Decrease) in cash 6,918,736 (1,148,675) =========== ========== Reconciliation of net cash flow to movement in net debt for the year ended 31 December 2005 2005 2004 • • Increase/(decrease) in cash 6,918,736 (1,148,675)Cash inflow from increase in lease financing (75,392) (281,754)Cash outflow from decrease in debt financing (2,040,026) 2,275,229Cash outflow from decrease in lease financing 329,670 262,370 ----------- ---------- Movement in net debt 5,132,987 1,107,170 Non cash movementDeferred consideration (1,185,295) -Foreign exchange gain on UK loan notes - 13,019Net debt at beginning of year (10,876,388) (11,996,577) ----------- ---------- Net debt at end of year (6,928,696) (10,876,388) =========== ========== Calyx Group plc Notes to the preliminary statement for the year ended 31 December 2005 1. Analysis of turnover The group's principal activities are the sale and maintenance of computer andtelecommunications equipment and the supply of training modules for applicationsoftware. An analysis by geographical market is detailed below: Geographical analysis by market 2005 2004 • • United Kingdom 970,000 0Ireland 37,439,877 34,236,206 ---------- -------- 38,409,877 34,236,206 ========== ======== 2. Earnings per ordinary share Basic earnings per share is based on profit after taxation of €1,444,704 (2004:€1,589,046) and on a weighted average number of ordinary shares in issue of36,017,082 (2004: 24,999,995). 3. Exceptional items During the financial year 2005, the company incurred significant reorganisationcosts amounting to €576,255. The expenditure was incurred on the implementationof a infrastructure to integrate the 2005 acquisitions but more importantly tofacilitate the ease of integration of any future acquisitions. The costscomprised of design and consultancy services, systems integration services andhardware and software implementation. Included in the above figure is an amountof €78,616 in respect of group re-branding costs associated with the IPO. Calyx Group plc Notes to the preliminary statement for the year ended 31 December 2005 -continued 4. Analysis of net debt At beginning Other Closing of year Cash flow non cash Balance • • • • Cash at bank and inhand 1,115,505 4,785,708 - 5,901,213Bank overdrafts (3,171,228) 2,133,027 - (1,038,201) ---------- ---------- ---------- ---------- (2,055,723) 6,918,735 - 4,863,012 Bank loans (5,706,461) (4,300,000) - (10,006,461)Finance leases (610,896) 254,277 - (356,619)Loan notes (1,772,974) 1,772,974 - -Deferred consideration (730,334) 487,001 (1,185,295) (1,428,628) ---------- ---------- ---------- ---------- (10,876,388) 5,132,987 (1,185,295) (6,928,696) ========== ========== ========== ========== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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