30th May 2008 07:00
30 May 2008
Electronic Data Processing PLC (EDP)
Interim results - 6 months to 31 March 2008
EDP is a leading IT solution provider to the UK wholesale distribution industry.
Financial Highlights
• Turnover up 5% at £3.47 million (2007: £3.30 million). • Adjusted operating profit £505,000 (2007: £90,000) giving an operating margin of 14.5%. • Profit before tax £1.23 million including £668,000 profit on disposal of property (2007: £226,000). • Hosting revenues represent 19% of total revenues (2007: 16%). • Contracted recurring revenues represent 67% of total revenues. • Continued R&D investment of £620,000 in first half (£1.3 million in the full year to 30 September 2007). • Cash balances £8.0 million reflecting strong operating cash flows and property disposal.
• Interim dividend maintained at 0.713p per share. • Special dividend of 5p per share returns additional £1.23 million to shareholders.
Michael Heller, Chairman of EDP, said:
"We continue to see significant competition in the marketplace we address. However, with current levels of demand, in particular for our hosting services and sales intelligence product, I can look forward to the rest of the year with confidence."
For further information please contact:
|
Julian Wassell |
Toby Mountford |
|
Acting Chief Executive |
Citigate Dewe Rogerson |
|
0114 262 2007 |
020 7638 9571 07710 356 611 |
www.edp.co.uk
Chairman's Statement
I am pleased to report that Group sales for the 6 months to 31 March 2008 were up 5% at £3.47 million (2007: £3.30 million). Contracted recurring revenues, relating principally to annual software licences and hosting fees, represented 67% of turnover.
Pre-tax profit for the period was £1.23 million (2007: £226,000). This includes a profit on disposal of surplus property of £668,000.
Adjusted operating profit, before non-cash IFRS charges and one-off redundancy costs, was £505,000 (2007: £90,000) representing an operating margin of 14.5% (2007: 2.7%).
These results reflect increased sales of our Vecta sales intelligence product, partially offset by a planned reduction in hardware maintenance revenue of £58,000, together with careful management of the Group's cost base.
We continue to see robust competition in the marketplace for our core distribution software applications and integrated Quantum VS products. However, the number of customer demonstrations in which we are involved remains encouraging.
The Vecta business, which was acquired in October 2006, has continued to perform well. In line with our expectations at the time of the acquisition, Vecta has been earnings enhancing in the current financial year and 95 customers of the Vecta product have now signed licences and support contracts.
The Group's hosting operation in Milton Keynes has continued to develop as more customers switch from standard licensed software arrangements to fully outsourcing the delivery of the Group's software products. We now have 64 customers hosted including those who have taken the Vecta OnDemand service which was released last year. Hosted customers now account for 19% of the Group's revenue (2007: 16%).
Research & Development expenditure amounted to £620,000 during the period (£1.3 million in the full year to 30 September 2007) all of which has been charged in the Income Statement. Our R&D effort continues to focus on the continued development and enhancement of our distribution software applications and sales intelligence product.
The Group's balance sheet is strong with net assets of £14.8 million as at 31 March 2008. Cash balances amounted to £8.0 million compared to £6.0 million at 30 September 2007. This reflects strong operating cash flows together with £1.35 million from the disposal of a surplus property. We remain interested in using our cash resources to make further acquisitions of compatible software businesses. The Board continues to review the other freehold properties owned by the Group.
Your Directors have resolved to pay an interim dividend of 0.713p per ordinary share, the same as last year. In addition your Directors have resolved to pay a special dividend of 5p per share, returning to shareholders a further £1.23 million of cash. The interim and special dividends will be paid on 1 August 2008 to those shareholders on the register on 11 July 2008. The shares will be ex-dividend on 9 July 2008.
We continue to see significant competition in the marketplace we address. However, with current levels of demand, in particular for our hosting services and sales intelligence product, I can look forward to the rest of the year with confidence.
Michael Heller 29 May 2008
Chairman
Responsibility Statement of the Directors in respect of the half-yearly Financial Report
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
• the Chairman's Statement includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board
J H Wassell
Acting Chief Executive
29 May 2008
The Directors who all served throughout the period are:
M.A.Heller Chairman
J. H. Wassell Acting Chief Executive and Finance Director
P. A. Davey Sales Director
P. J. Davies Application Software Products Director
C. R. Spicer Network Services Director
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Consolidated Income Statement |
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For the 6 months ended 31 March 2008 |
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Unaudited |
|
Unaudited |
|
Audited |
|
|
6 months |
|
6 months |
|
Full year |
|
|
to |
|
to |
|
to |
|
|
31.3.08 |
|
31.3.07 |
|
30.9.07 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
Revenue |
3,466 |
|
3,297 |
|
6,618 |
|
|
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|
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|
|
|
|
|
|
|
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|
Gross profit |
3,213 |
|
3,009 |
|
6,089 |
|
|
|
|
|
|
|
|
Administrative expenses |
(2,829) |
|
(2,919) |
|
(5,678) |
|
|
|
|
|
|
|
|
Operating profit |
384 |
|
90 |
|
411 |
|
|
|
|
|
|
|
|
Profit on disposal of property |
668 |
|
- |
|
- |
|
Finance revenue |
182 |
|
136 |
|
289 |
|
|
|
|
|
|
|
|
Profit before tax |
1,234 |
|
226 |
|
700 |
|
|
|
|
|
|
|
|
Income tax expense |
(192) |
|
(66) |
|
(222) |
|
|
|
|
|
|
|
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Profit for the period attributable |
|
|
|
|
|
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to equity holders of the parent |
1,042 |
|
160 |
|
478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Earnings per share - basic and diluted |
4.25p |
|
0.65p |
|
1.95p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Dividends per share |
5.713p |
|
0.713p |
|
2.713p |
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|
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Net assets per share |
60.2p |
|
52.9p |
|
56.7p |
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Consolidated Balance Sheet |
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at 31 March 2008 |
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|
|
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|
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Unaudited |
|
Unaudited |
|
Audited |
|
|
at |
|
at |
|
at |
|
|
31.3.08 |
|
31.3.07 |
|
30.9.07 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
6,457 |
|
6,570 |
|
6,480 |
|
Investment property |
- |
|
665 |
|
660 |
|
Deferred tax asset |
15 |
|
136 |
|
15 |
|
Employee benefits |
1,221 |
|
- |
|
823 |
|
Intangible assets |
859 |
|
963 |
|
924 |
|
|
8,552 |
|
8,334 |
|
8,902 |
|
Current assets |
|
|
|
|
|
|
Assets held for sale |
1,082 |
|
1,082 |
|
1,082 |
|
Inventories |
135 |
|
186 |
|
162 |
|
Trade and other receivables |
2,203 |
|
2,452 |
|
2,436 |
|
Cash and cash equivalents |
8,016 |
|
5,477 |
|
5,963 |
|
|
11,436 |
|
9,197 |
|
9,643 |
|
Current liabilities |
|
|
|
|
|
|
Deferred income |
(2,403) |
|
(2,251) |
|
(2,528) |
|
Income tax payable |
(367) |
|
(78) |
|
(154) |
|
Trade and other payables |
(1,743) |
|
(1,744) |
|
(1,333) |
|
|
(4,513) |
|
(4,073) |
|
(4,015) |
|
|
|
|
|
|
|
|
Net current assets |
6,923 |
|
5,124 |
|
5,628 |
|
|
|
|
|
|
|
|
Total assets less current liabilities |
15,475 |
|
13,458 |
|
14,530 |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Deferred income |
(246) |
|
(78) |
|
(242) |
|
Employee benefits |
- |
|
(343) |
|
- |
|
Deferred tax liability |
(469) |
|
(106) |
|
(375) |
|
|
(715) |
|
(527) |
|
(617) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
14,760 |
|
12,931 |
|
13,913 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Issued capital |
1,226 |
|
1,223 |
|
1,226 |
|
Share premium |
119 |
|
98 |
|
119 |
|
Capital redemption reserve |
88 |
|
88 |
|
88 |
|
Translation reserve |
(2) |
|
- |
|
(3) |
|
Retained earnings |
13,329 |
|
11,522 |
|
12,483 |
|
|
|
|
|
|
|
|
Total equity attributable to equity holders of the parent |
14,760 |
|
12,931 |
|
13,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Cash Flow Statement |
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for the 6 months ended 31 March 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
6 months |
|
6 months |
|
Full year |
|
|
to |
|
to |
|
to |
|
|
31.3.08 |
|
31.3.07 |
|
30.9.07 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
Profit for the period |
1,042 |
|
160 |
|
478 |
|
Adjustments for: |
|
|
|
|
|
|
Depreciation and amortisation |
207 |
|
190 |
|
380 |
|
Net (profit)/loss on disposal of property, plant and equipment |
(673) |
|
- |
|
9 |
|
Pension charge |
11 |
|
114 |
|
140 |
|
Pension payments |
- |
|
(144) |
|
(190) |
|
Finance revenue |
(182) |
|
(136) |
|
(289) |
|
Income tax expense |
192 |
|
66 |
|
222 |
|
Changes in working capital |
65 |
|
(548) |
|
(37) |
|
|
|
|
|
|
|
|
Cash received from/(used in) operations |
662 |
|
(298) |
|
713 |
|
Interest received |
176 |
|
139 |
|
285 |
|
Income taxes paid |
- |
|
- |
|
(19) |
|
Net cash from operating activities |
838 |
|
(159) |
|
979 |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Acquisition of business |
- |
|
(919) |
|
(919) |
|
Purchase of property, plant and equipment |
(132) |
|
(72) |
|
(115) |
|
Purchase of intangible assets |
(19) |
|
(22) |
|
(23) |
|
Proceeds from sale of property, plant and equipment |
1,365 |
|
200 |
|
210 |
|
Net cash generated from /(used in) investing activities |
1,214 |
|
(813) |
|
(847) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Sale of own shares |
- |
|
12 |
|
36 |
|
Dividends paid |
- |
|
- |
|
(639) |
|
Net cash generated from/(used in) financing activities |
- |
|
12 |
|
(603) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
2,052 |
|
(960) |
|
(471) |
|
Cash and cash equivalents at beginning of period |
5,963 |
|
6,439 |
|
6,439 |
|
Effect of exchange rate fluctuations on cash held |
1 |
|
(2) |
|
(5) |
|
Cash and cash equivalents at end of period |
8,016 |
|
5,477 |
|
5,963 |
|
|
|
|
|
|
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Consolidated Statement of Recognised Income and Expense |
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for the 6 months ended 31 March 2008 |
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|
|
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
Audited |
|
|
|
6 months |
|
6 months |
|
Full year |
|
|
|
to |
|
to |
|
to |
|
|
|
31.3.08 |
|
31.3.07 |
|
30.9.07 |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gains on defined benefit pension scheme |
409 |
|
206 |
|
1,352 |
|
|
Tax on items recognised directly in equity |
(115) |
|
(62) |
|
(391) |
|
|
Foreign exchange translation difference |
1 |
|
(2) |
|
(5) |
|
|
|
|
|
|
|
|
|
|
Net income recognised directly in equity |
295 |
|
142 |
|
956 |
|
|
|
|
|
|
|
|
|
|
Profit for the period |
1,042 |
|
160 |
|
478 |
|
|
|
|
|
|
|
|
|
|
Total recognised income and expense attributable |
|
|
|
|
|
|
|
to equity holders of the parent |
1,337 |
|
302 |
|
1,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Notes |
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1 |
Basis of Preparation |
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The unaudited interim financial information for the six months ended 31 March 2008 has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. The accounting policies applied are consistent with those to be adopted in the Group's next annual accounts, which are the same as those policies used in the preparation of the accounts for the year ended 30 September 2007. |
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2 |
Interim Financial Information |
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The interim financial information for the six months ended 31 March 2008 has not been audited. The comparative figures for the financial year ended 30 September 2007 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The independent auditor's report was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985 |
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3 |
Significant Judgements, Assumptions and Risks |
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In preparing these interim results the significant judgements and estimates made by management in applying the Group's accounting policies are the same as those that applied to the accounts for the year ended 30 September 2007. These estimates and associated assumptions are based on historical experience and other reasonable factors which form the basis of determining the reported values of assets and liabilities. |
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4 |
Segment Information
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The following table presents revenue and results by geographical segment: |
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Unaudited |
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Unaudited |
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Audited |
||
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6 months |
|
6 months |
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Full year |
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to |
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to |
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to |
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|
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|
31.3.08 |
|
31.3.07 |
|
30.9.07 |
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£'000 |
|
£'000 |
|
£'000 |
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Revenue - UK |
3,415 |
|
3,244 |
|
6,506 |
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- USA |
51 |
|
53 |
|
112 |
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3,466 |
|
3,297 |
|
6,618 |
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Operating profit/(loss) - UK |
371 |
|
124 |
|
475 |
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- USA |
13 |
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(34) |
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(64) |
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|
384 |
|
90 |
|
411 |
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5 |
Adjusted Operating Profit |
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Adjusted operating profit for the six months ended 31 March 2008 is calculated as follows: |
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£'000 |
||
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Operating profit |
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|
384 |
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Adjustments for non-cash items: |
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Amortisation of intangible assets under IFRS |
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|
65 |
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Pension charge |
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|
11 |
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Redundancy costs |
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|
45 |
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Adjusted operating profit |
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|
505 |
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6 |
Property Disposal |
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During the six month period ended 31 March 2008 the Company disposed of its former head office in Sheffield. The consideration for the freehold was £1.35 million which generated a profit of £668,000 after disposal costs. |
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7 |
Taxation |
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The taxation charge is derived from the Directors' best estimate of the annual tax rate applied to the result for the period. |
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8 |
Earnings per Share |
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Earnings per share is calculated by dividing the profit after tax of £1,042,000 (2007: £160,000) by 24,522,362 (2007: 24,436,648) being the average number of shares in issue during the period. Basic and diluted earnings per share are both 4.25p (2007: 0.65p). |
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Related Shares:
Electronic Data Processing