4th Dec 2006 13:23
Knowledge Technology Solutions PLC04 December 2006 KNOWLEDGE TECHNOLOGY SOLUTIONS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2006 Knowledge Technology Solutions PLC (AIM: KTS), provider of market informationservices in the finance sector, reports its unaudited results for the year ended30 June 2006. Financial and business highlights: • Turnover increased to £1.4m (2005: £1.25m) • Group loss before tax of £1.0m (2005: £1.0m) • Currently undertaking share placings to raise up to £1.8m in additional working capital • Launched MarketTerminal ON-SITE, a bespoke service for major investment banks • Adding Plus Markets and Virt-X coverage to standard MarketTerminal subscription • In October 2006, signed first stockbroker client for MarketTerminal Mobile Messenger Dr Marc Pinter-Krainer, Chief Executive of Knowledge Technology Solutions, said: "Following an encouraging initial response from prospective clients for bothMarketTerminal ON-SITE and from our MiFID initiatives we expect to reportfurther revenue progress this trading year. Together with improved financialresults from our existing MarketTerminal subscription business, this shouldstrengthen our trading performance in the future." Enquiries, please contact: Dr Marc Pinter-Krainer Knowledge Technology Solutions PLC 020 7256 2300Barrie Newton Rowan Dartington & Co. Limited 01225 424 666Emily Morgan Corporate Synergy Plc 0117 933 0020Neil Boom/Laura Black Gresham PR Ltd 020 7404 9000 Chief Executive's review During the year, sales increased resulting in a year-end turnover of £1.4million, an increase of 12% compared with the previous year (2005: £1.25m).Pre-tax losses of £1.0 million are similar to the losses for the previous year.Going forward, we expect to strengthen our trading performance by focusingMarketTerminal on domestic markets. Accordingly, we will be discontinuingoverseas exchange coverage from 1 January 2007, from which we expect to generatean estimated net saving in excess of £0.5 million per annum. Last year there was sustained competition among desktop data providers which ledto KTS introducing a new company strategy aimed at building a broader, highermargin revenue base. KTS's new strategy will be focussed more specifically onthe strength and flexibility of our proprietary technology and will capitaliseon the positive reputation gained by KTS's principal business as a provider of aprofessional market data display application. I am pleased to report in the year under review we have made considerableprogress in the delivery of this new strategy, particularly in two new highgrowth markets. The first high growth market is driven by demand from global investment banks tohave a customised viewing application that improves the interface between theirown internally originated and derived information and the external data andprices sourced from a plethora of third party suppliers. To address this need we have introduced a new product branded MarketTerminalON-SITE. This uses the same proprietary technology platform as MarketTerminaland integrates seamlessly with the bank's existing infrastructure. It is beingsold on a licence model and aimed at a new market for KTS - mid-tier userswithin major international investment banks operating in the City of London. Our MarketTerminal ON-SITE highly-tailored solution offers banks far greatercontrol over the presentation and manipulation of their own data, and alsoconsiderable cost savings by reducing their dependence on the large data vendorssupplying this market. To date, the response to MarketTerminal ON-SITE has been very encouraging. Weare now at an advanced stage with several banks, including having successfullycompleted a 'proof of concept' phase with one global investment bank. There is also significant interest from other banks, albeit at an earlier stage.Banks are responding positively to our proposition, and are welcoming a newcompetitor that challenges the dominance of larger established vendors such asReuters. The commercial revenue model for MarketTerminal ON-SITE is based on initiallygranting the bank a technology licence for a one-off fee. We expect to alsogenerate annually recurring maintenance fees, together with a professionalservices revenue stream arising from consultancy, customisation and supportactivities. The second new market where we can report progress is in the creation ofspecific solutions addressing the market requirements arising from the plannedintroduction of MiFID. MiFID is an EU directive aimed at creating transparencythroughout the European Union for market participants dealing in securities andis expected to become law from 1 November 2007. Our response to MiFID has been to design particular solutions that assist marketparticipants in securing the maximum business benefit and comply with itsintroduction next year. We know this new market well, having activelyparticipated in MiFID implementation forums over the last 15 months.Accordingly, our MiFID solutions, all available on MarketTerminal, are designedto help users commercially benefit from its introduction, and also be intuitiveto use. For example, we have added to MarketTeminal the ability to concurrentlydisplay quotes or orders from multiple transaction venues, and easy-to-usefunctionality that analyses post-trade transactions. To further capitalise on MiFID and other opportunities, the Company has recentlyannounced that it has raised £242,571 by way of a placing of new ordinary sharesin order to provide additional working capital. The Company is currently in theprocess of undertaking a further placing of new ordinary shares for cash toraise up to £1.6 million, details of which are expected to be announced shortly. The new MiFID solutions are not the only additions to MarketTerminal. In July,in collaboration with Microsoft, Hewlett-Packard and T-Mobile we launchedMarketTerminal Mobile Messenger, a new real-time financial information serviceaccessed from a mobile-connected Personal Digital Assistant. We believe this product will be increasingly important in helping retainexisting MarketTerminal users, many of whom now require live market data, news,analytics and email access while out of the office. A new stockbroker client wassigned up in October 2006 as a direct result of MarketTerminal MobileMessenger's introduction. As part of our focus on the UK, from early next year we will be adding real-timeequity prices, news and other company data from two exchanges (Virt-x and PlusMarkets) that are becoming increasingly established within the UK tradingcommunity. Virt-x and Plus Markets will be added to MarketTerminal at noadditional subscription costs to users. Outlook Following an encouraging initial response from prospective clients for bothMarketTerminal ON-SITE and from our MiFID initiatives, we expect to reportfurther revenue progress this trading year. Together with improved financialresults from our existing MarketTerminal subscription business, this shouldstrengthen our trading performance in the future. Marc Pinter-Krainer Chief Executive 4 December 2006 Consolidated Profit and Loss Account For the year ended 30 June 2006 Note Year ended Year ended 30 June 2006 30 June 2005 £ £ Turnover 1 1,417,063 1,250,474Distribution costs (1,316,988) (1,192,594)Administrative costs (1,170,498) (1,119,527)Operating loss (1,070,423) (1,061,647)Interest receivable 54,257 95,111Loss on ordinary activities before taxation (1,016,166) (966,536)Taxation 2 - -Loss on ordinary activities after taxation (1,016,166) (966,536)Dividends 3 - -Retained loss for the year (1,016,166) (966,536)Loss per share 4 (0.69)p (0.65)pDiluted loss per share 4 (0.69)p (0.65)p All of the results relate to continuing operations. There are no recognised gains or losses other than the loss for the year. Consolidated Balance Sheet As at 30 June 2006 30 June 30 June 2006 2005 £ £ Fixed assetsTangible assets 158,527 180,027Investments - - 158,527 180,027Current assetsDebtors 229,059 162,926Cash at bank and in hand 961,878 1,716,053 1,190,937 1,878,979Creditors: amounts falling due within one year (562,723) (256,099)Net current assets 628,214 1,622,880Net assets 786,741 1,802,907Capital and reservesCalled up share capital 148,275 148,275Share premium account 4,777,574 4,777,574Profit and loss account (4,139,108) (3,122,942)Equity shareholders' funds 786,741 1,802,907 Approved on behalf of the board on 4 December 2006 by: Marc Pinter-Krainer Michael LevyChief Executive Officer Group Finance Director Consolidated Cash Flow Statement For the year ended 30 June 2006 Year ended Year ended 30 June 2006 30 June 2005 £ £ Net cash outflow from operating activities (778,952) (1,027,646)Returns on investments and servicing of financeInterest received 54,257 95,111Net cash inflow from returns on investments and servicing of finance 54,257 95,111TaxationCorporation tax refund - -Net cash inflow from taxation - -Purchase of tangible fixed assets (29,480) (65,645)Net cash outflow from capital expenditure and financial investment (29,480) (65,645)Net cash outflow before financing (754,175) (998,180)FinancingIssue of share capital - 11,700Expenses paid in connection with share issues - -Net cash inflow from financing - 11,700Decrease in cash in the year (754,175) (986,480) All cash flows relate to continuing operations. Notes to the Preliminary Statement 1 Turnover Turnover is attributable to the principal activities of the Group being the saleof real-time data and analysis services, together with advertising andsponsorship revenue. All turnover arises within the UK. Income is recognised over the contract period. 2 Taxation on loss on ordinary activities As a result of the losses available, no liability to UK corporation tax arose onthe ordinary activities for the year ended 30 June 2006. 3 Dividends The Directors do not recommend the payment of a dividend. 4 Loss per ordinary share The loss per Ordinary Share has been calculated by dividing the loss onordinary activities after tax attributable to shareholders by 148,274,732 (2005:148,256,472), being the weighted average number of Ordinary Shares in issueduring the year, which carry the right to receive a dividend. 5 Post balance sheet events There were no events since the balance sheet date, which materially affectthe position of the Group. 6 Annual report and accounts The foregoing financial information does not amount to full accountswithin the meaning of Section 240 of the Companies Act 1985 and has not beenreported on but has been agreed with the Company's auditors. The Annual Reportand Accounts will be filed at Companies House following the Annual GeneralMeeting and will be posted to shareholders shortly. Copies will be availablefrom the Company Secretary at 8th Floor, Finsbury Tower, 103-105 Bunhill Row,London, EC1Y 8LZ. 7 Annual General Meeting The AGM will be held at the offices of Corporate Synergy Plc, 30 Old BroadStreet, London EC2N 1HT, on 29 December 2006 at 12.30 pm. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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