17th Sep 2008 07:00
COMS PLC
("Coms", or "the Company")
Interim accounts for the six months ended 31 July 2008
Period Highlights
Revenue growth of 134% to £1.2m (H1 2007: £0.5m)
Gross profit of £321,000 (H1 2007: £202,000)
Gross margin in excess of 27%
Partnership with the Federation of Small Businesses (FSB) to promote Coms service across its 210,000 membership
Change of Nomad and Broker to Daniel Stewart and Company
Post Period Highlights:
1 for 100 share consolidation
Launch of combined broadband and VoIP (double play) service in conjunction with Tiscali
Jason Drummond, Chairman of Coms, said: "Coms continues to increase its customer base and the resulting revenues prove our business model; we are now focussed on growth.
"I remain very confident that our growth will be sustained through the second half of the year and I am excited about the long term prospects for Coms."
Contact:
|
Coms PLC Jason Drummond Richard Bennett |
020 7148 3000 |
|
Daniel Stewart & Company plc Simon Leathers Tessa Smith |
020 7776 6550 |
|
Threadneedle Communications Graham Herring Alex White |
020 7653 9855 |
Chairman's Statement
I am pleased to report that, as a result of the successful integration of our acquisitions and sustained organic customer growth, Coms' revenue has increased by 134% over the same period last year. In addition, Coms continues to maintain a high gross margin of in excess of 27% across the group and maintains a 40% gross margin across our core hosted telephony product which we take as verification of our business model.
As forecast, an expanded sales team and additional marketing programmes have led to an increase in administrative expenses. This figure is expected to narrow by the end of the year as they ramp up to their full revenue generating potential.
During the period Coms has channelled its efforts to target the business market with our hosted telephony proposition that saves customers money on both the set-up and ongoing call costs of owning their own switchboard, as well as providing advanced functions and flexibility. We concluded a revenue generating partnership with the Federation of Small Businesses (FSB) which markets the Coms products across its 210,000 customer base. This is an enormous validation of our services and continues to deliver significant sales leads.
We are delighted with the performance of wholesale subsidiary, VCOMM, which continues to exceed our expectations. The subsidiary remains the sole distributor of iconic range of IP Phones from Polycom and we have seen significant growth in the corporate sector for these products. VCOMM 's strategic technology relationships also includes companies such as Extricom and Vegastream that generate good revenues for the business but importantly also generate corporate sales leads for our core hosted telephony services. With this being a higher turnover business with lower margins this significant increase in sales has created a minor erosion of the overall group gross profit margin.
During the period, Coms appointed Daniel Stewart & Company as our nomad and broker and their house analyst has since published an Initiation of Coverage research note.
As part of our corporate development, we requested shareholder approval at the August 2008 AGM to consolidate our stock by a factor of 100. This was granted, and the implementation has enabled the market to reduce the "bid-offer" spread which previously represented an additional cost to both existing and potential investors.
This is clearly a difficult point in the economic cycle, but it does focus many companies' minds on their bottom line - telecoms is the lifeblood of many businesses and the Coms proposition of reducing costs whilst increasing flexibility and functionality continues to be well received. I remain very confident that our growth will be sustained through the second half of the year and I am excited about the long term prospects for Coms.
Accordingly, we intend to continue our current strategies of pursuing organic growth from business customers and taking advantage of complementary acquisitions that the current environment will undoubtedly create.
Jason Drummond
Chairman.
COMS PLC
Income Statement
For the Six months ended 31 July 2008
|
Six months to 31 July 2008 Unaudited |
Six months 31 July 2007 Unaudited |
Year ended 31 January 2008 Audited |
||||||
|
£'000s |
£'000s |
£'000s |
||||||
|
Continuing operations |
||||||||
|
Revenue |
1,170 |
501 |
1,297 |
|||||
|
Cost of Sales |
(849) |
(299) |
(854) |
|||||
|
Gross Profit |
321 |
202 |
443 |
|||||
|
Administrative expenses |
(834) |
(485) |
(1,300) |
|||||
|
Operating Loss |
(513) |
(283) |
(857) |
|||||
|
Finance income |
1 |
3 |
4 |
|||||
|
Finance costs |
(4) |
(3) |
(7) |
|||||
|
Loss before tax |
(516) |
(283) |
(860) |
|||||
|
Income tax charges |
- |
- |
30 |
|||||
|
Loss for the period from continuing operations attributable to shareholders |
(516) |
(283) |
(830) |
|||||
|
Loss per share |
||||||||
|
From continuing operations: |
||||||||
|
Basic and diluted |
(0.04p) |
(0.03p) |
(0.09p) |
|||||
|
Proforma loss per share after consolidation on 22 August 2008 |
(4p) |
(3p) |
(9p) |
|||||
The Company's turnover and operating loss arose from continuing operations.
There were no recognised gains or losses other than those recognised in the income statement above.
COMS PLC
Balance Sheet as at 31 July 2008
|
As at 31 July 2008 Unaudited |
As at 31 July 2007 Unaudited |
As at 31 January 2008 Audited |
||||||
|
£'000s |
£'000s |
£'000s |
||||||
|
Assets |
||||||||
|
Non-current assets |
||||||||
|
Goodwill |
2,308 |
2,330 |
2,308 |
|||||
|
Other intangibles |
55 |
14 |
46 |
|||||
|
Property, plant and equipment |
52 |
49 |
37 |
|||||
|
2,415 |
2,393 |
2,391 |
||||||
|
Current assets |
||||||||
|
Inventories |
212 |
56 |
187 |
|||||
|
Trade and other receivables |
547 |
296 |
758 |
|||||
|
Cash and cash equivalents |
63 |
186 |
22 |
|||||
|
822 |
538 |
967 |
||||||
|
Total assets |
3,237 |
2,931 |
3,358 |
|||||
|
Equity and liabilities |
||||||||
|
Capital and reserves |
||||||||
|
Share capital |
4,642 |
3,446 |
4,168 |
|||||
|
Accumulated deficit |
(2,060) |
(1,027) |
(1,544) |
|||||
|
Total equity |
2,582 |
2,419 |
2,624 |
|||||
|
Current liabilities |
||||||||
|
Trade and other payables |
589 |
414 |
652 |
|||||
|
Bank overdrafts |
5 |
- |
2 |
|||||
|
Bank loans |
37 |
37 |
37 |
|||||
|
631 |
451 |
691 |
||||||
|
Non current liabilities |
||||||||
|
Bank loans |
24 |
61 |
43 |
|||||
|
24 |
61 |
43 |
||||||
|
Total equity and liabilities |
3,237 |
2,931 |
3,358 |
|||||
COMS PLC
Cash Flow Statement
For the Six months ended 31 July 2008
|
Six months to 31 July 2008 Unaudited |
Six months to 31 July 2007 Unaudited |
Year ended 31 January 2008 Audited |
||||
|
Note |
£'000 |
£'000 |
£'000 |
|||
| Operating activities |
3 |
(376) |
(565) |
(1,417) |
||
|
Investing activities |
||||||
|
Purchases of plant and equipment |
(23) |
(39) |
(40) |
|||
|
Purchase of other intangibles |
(15) |
(1) |
(39) |
|||
|
Purchase of subsidiary undertakings (net of cash acquired) |
- |
(39) |
(44) |
|||
|
Financing activities |
||||||
|
Proceeds on issue of shares |
474 |
660 |
1412 |
|||
|
Repayment of bank loans |
(19) |
(9) |
(28) |
|||
|
Finance income |
1 |
3 |
4 |
|||
|
Finance expense |
(4) |
(3) |
(7) |
|||
|
Net cash inflow/(outflow) |
38 |
7 |
(159) |
|||
|
Cash and cash equivalents at the beginning of the period |
20 |
179 |
179 |
|||
|
Bank balances and cash |
58 |
186 |
20 |
|||
Consolidated statement of changes in equity
|
As at 31 July 2008 |
As at 31 July 2007 |
As at 31 January 2008 |
||||
|
£'000s |
£'000s |
£'000s |
||||
|
As at beginning of period |
2,624 |
1,942 |
1,942 |
|||
|
Deficit for the period |
(516) |
(283) |
(830) |
|||
|
Issue of share capital net of expenses |
474 |
760 |
1,512 |
|||
|
As at end of period |
2,582 |
2,419 |
2,624 |
|||
COMS PLC
Notes to the Interim Report
1. Significant Accounting Policies
Whilst unaudited these accounts have been prepared in accordance with International Financial Reporting Standards and on the historical cost basis, using generally recognised accounting principles consistent with those used in the annual report and accounts for the year ended 31 January 2008 and expected to be used for the year ended 31 January 2009
This interim report for the six months to 31 July 2008 which complies with IAS 34 was approved by the Board on 16 September 2008.
2. Loss per Share
|
Six months to 31 July 2008 |
Six months 31 July 2007 |
Year ended 31 January 2008 |
|||
|
Earnings per ordinary shares |
|||||
|
Basic and diluted |
(0.04p) |
(0.03p) |
(0.09p) |
The loss per ordinary share is based on the Company's loss for the period of £516,333 (31 July 2007 - £283,024; 31 January 2008 - £830,210) and a basic weighted average number of shares of 1,152,291,661 (31 July 2007 - 908,450,023; 31 January 2008 - 953,887,789) .
In order to calculate diluted earnings per share, the weighted average number of ordinary shares in issue would be adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. In each of the periods ended 31 July 2008, 2007 and 31 January 2008 the Group has made a loss after taxation and the effect of the potential ordinary shares is anti-dilutive and therefore the diluted earnings per share is the same as basic earnings per share.
3. Reconciliation of operating loss to net cash outflow from operating activities.
|
Six months to 31 July 2008 |
Six months 31 July 2007 |
Year ended 31 January 2008 |
||||
|
£'000s |
£'000s |
£'000s |
||||
|
Loss for the period |
(516) |
(283) |
(860) |
|||
|
Adjustments for : |
||||||
|
Finance income |
(1) |
(3) |
(4) |
|||
|
Finance expense |
4 |
3 |
7 |
|||
|
Depreciation and amortisation |
14 |
14 |
34 |
|||
|
(Increase) in inventories |
(25) |
(17) |
(130) |
|||
|
(Increase)/Decrease in receivables |
211 |
(54) |
(475) |
|||
|
(Decrease)/Increase in payables |
(63) |
(225) |
11 |
|||
|
Net cash from operating activities |
(376) |
(565) |
(1,417) |
COMS PLC
Notes to the Interim Report
4. Called up Share Capital
The issued share capital as at 31 July 2008 was 1,221,961,533 Ordinary Shares of 0.1 p each (31 July 2007 - 921,378,200; 31 January 2008 - 1,056,378,200).
On 23 March 2008 the company issued 3,500,000 ordinary shares of 0.1p each for cash at 0.1p per share as a result of the exercise of 'A' Warrants.
On 17 April 2008 the company issued 162,083,333 ordinary shares of 0.1p each for cash at 0.3p per share. The net amount raised after costs amounted to £471,659.
On 20 May 2008 the company granted options over 36 million ordinary shares of 0.1p each at an option price of 0.5p per share. The Black Scholes value of these options at the date of grant was insignificant.
5. The unaudited results for period ended 31 July 2008 do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The comparative figures for the year ended 31 January 2008 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain statements under Section 237(2) or (3) of the Companies Act 1985.
6. Copies of this interim statement are available from the Company at its registered office at 5-7 Cranwood Street, London, EC1V 9EE. The interim statement will also be available on the company website www.coms.com/governance_policy.html
7. Events subsequent to 31 July 2008
On 22 August 2008 the Company enacted a share consolidation on a 1 for 100 basis, converting its ordinary shares of 0.1p to ordinary shares of 10p. At that date, the Company's total number of issued ordinary shares of 0.1p amounting to 1,221,961,533 were, after the issue of a further 67 shares, converted to 1,221,962 ordinary shares of 10p each.
Related Shares:
SMRT.L