24th Nov 2005 07:02
Clarity Commerce Solutions PLC24 November 2005 Clarity Commerce Solutions plc Interim Results Clarity Commerce Solutions plc, a leading supplier of software managementsolutions for the entertainment, ticketing, hospitality and leisure sectors,announces its Interim Results for the six months to 30 September 2005. • Turnover maintained at £8,415,000 (2004 H1: £8,236,000) • Operating profit up 24% to £395,000 (2004 H1: £318,000) • Research and Development investment £680,000 (2004 H1:£650,000) • Adjusted earnings per share 1.48p (2001 H1: 1.44p) • Finalisation of £2.3 million, three year contract with Sodexho - Implementation of software solutions to over 100 major UK locations marks entry into new market sectors including business and industry, defence, healthcare and leisure • New contracts signed include Greenhalgh's Craft Bakery, Warrington Borough Council, Travelodge and Crown Theatres (USA) Graham York, Clarity Commerce Solutions, Chief Executive, said: "We remain confident that the second half of the year will demonstrate furthergrowth in underlying profits when compared to our first half. The significant investment in the first half with the recently signed contractwith Sodexho has demonstrated the Group's capability to deploy software acrossmultiple sectors." 24 November 2005 Enquiries: Clarity Commerce Solutions Graham York, Chief Executive Officer 01722 744 946 College Hill Adrian Duffield/Clare Warren 020 7457 2020 Financial Review The Board is pleased to report that the Group's operating profits for the halfyear ended 30 September 2005 increased by 24% to £395,000 (2004: £318,000). Last year we reported significant increases in revenue which have beenmaintained at £8,415,000 (2004: £8,236,000). Earnings per share have increased to 1.48p (2004: 1.44p). Net assets have increased to £9,728,000 (2004: £9,250,000). The Group has continued its strategy of investment in both new product andproduct integration and remains focused on Research and Development, with anexpenditure this half year of £680,000 (2004: £650,000). Operating Review Software Division The first part of this financial year involved substantial work leading towardsthe finalisation of the recently announced contract with Sodexho, one of theworld's largest providers of catering and business support services. This agreement is expected to be worth in excess of £2.3 million over threeyears, and will contribute to revenues and profits in the second half of thisyear. Clarity will be implementing software solutions to over 100 major UK locationsserviced by Sodexho, initially focused around four of its key market streams:business and industry, defence, healthcare, and leisure. The contract is strategically significant for the Group, as it marks Clarity'sentry into several new market sectors. In this period, we also announced a contract with Greenhalgh's Craft Bakery, awholesale and retail bakery business based in the northwest of England. TheClarity solution will support Greenhalgh's moves to automate order processing,increase efficiency and improve speed of service across its retail estate.Implementation of this is expected to be completed by year end. Our Leisure division has had another period of strong trading. The recentlyawarded Peepul Centre project, located in Leicester, integrates a broad range ofservices including community support services, eating and meeting places, healthand fitness facilities, leisure and learning facilities, and more - backed byour Leisure and Hospitality software to help them manage and operate the EPOS,membership, course bookings, box office and bar and catering requirements. In the leisure market there has also been strong growth in e-bookings ordersfrom local authority customers. Clarity has been selected by Warrington BoroughCouncil, a leading player in local authorities' e-government modernisationagenda, to provide an online bookings and payment solution to enhance its onlineservices for their customers. Clarity's LeisureFlex product has provided asecure, browser-based solution with the flexibility to book and/or pay forvarious resources the council offers. Virgin Active has recently added another 7 sites to their expanding portfolio of25 clubs which operate using leisure software provided and supported by Clarity. In the Golf and Spa market, UK sales continue with installations at a number ofprestigious sites. In other markets, we have provided further installations forOrient Express Hotels, Jumeirah International have continued their roll out withthe installation of our software at Emirates Towers, and the Taj Hotel Grouphave installed Clarity in the luxury Mumbai Spa Resort. The UK Ticketing marketplace has been marked by consolidation between the majorcinema players, and these customers have been awaiting the delivery of our new.NET based ticketing solution. Following the amalgamation of two of our key customers, Cineworld and UGC, intothe new Cineworld group, a program of hardware and software upgrades commencedin the early summer, and was successfully completed by the end of September. Our European office has commenced the planned installation of automatedticketing machines with Europalaces, and work on this project is expected tocontinue throughout 2005 and 2006. This development provides Europalaces withsignificant advantages in terms of speed of service in their Pathe and Gaumontcinemas. Ongoing sales and marketing efforts continue in Europe, aimed at broadening bothour geographical reach and the number of market sectors we operate in. In the USA, Crown Theatres have signed contracts with Clarity for provision ofsite and head office solutions for the 18 Theatre circuit, based aroundClarity's new .NET ticketing product. Business Intelligence Division Our Business Intelligence division has been developing expertise andaccreditation in the Cognos 8 and Cognos Enterprise Planning products. We expectthese new products to have a positive impact on revenues going forwards. Our project with Robert Wiseman Dairies plc to implement Cognos EnterprisePlanning project was successfully completed. The Wiseman EP Forecasting Modelhas been developed to assist the company in establishing future requirements forraw milk, and calculate the company's external supply requirements. During this period, we also signed an OEM contract with Cognos, enabling us toembed their BI solution into the group's software products. This is alreadydelivering revenues within our Leisure marketplace. Services Division Clarity's services division has seen significant growth, especially in itstraining revenues. Travelodge has awarded a major six month contract fortraining in 150 sites, and staying in the hotel sector, a new system was alsotrained in DeVere Village hotels. Clarity's expanding helpdesk operation won a long term contract from BTExpedite,for providing 24/7 support for one of their clients, a 550 site high streetretail chain. Outlook The board remain confident that the second half of the year will demonstrategrowth in underlying profits when compared to the first half, delivering astrongly improved result over last year. Integration within our acquired divisions is continuing, supported by a new UKbased R&D centre for our software. The significant medium term investment inMicrosoft's .NET platform will put the company in an increasingly strongcompetitive position with new products across several market sectors. We retain confidence that we have the product set, the people and the marketopportunities to continue to grow both the bottom line and the underlying valueof the business. Consolidated Profit and Loss Accountfor the period ended 30 September 2005 1 April 2005 to 1 April 2004 to 1 April 2004 to 30 September 2005 30 September 2004 31 March 2005 Unaudited Unaudited Audited £'000 £'000 £'000Turnover 8,415 8,236 16,310Cost of sales (2,928) (3,556) (6,155)Gross Profit 5,487 4,680 10,155Operating costs (5,092) (4,362) (9,486)Operating profit 395 318 669 Operating profit before impairment of 395 318 919goodwillImpairment of goodwill - - (250)Operating profit after impairment of 395 318 669goodwill Interest receivable 331 312 596Interest payable (403) (324) (752) (72) (12) (156)Profit on ordinary activities before 323 306 513taxationTaxation on profit on ordinary activities (82) (77) (120)Retained profit for the year 241 229 393 Profit per ordinary share- basic 1.48p 1.44p 2.46p- diluted 1.47p 1.41p 2.36p- adjusted basic 1.48p 1.44p 4.03pDividends per share - - - Consolidated Balance Sheetas at 30 September 2005 At At At 30 September 2005 30 September 2004 31 March 2005 Unaudited Unaudited Audited £'000 £'000 £'000Fixed assetsIntangible assets 11,277 10,300 11,305Tangible assets 560 501 530 11,837 10,801 11,835Current assetsStock and work in progress 1,027 463 628Debtors 4,093 4,229 4,767Cash at bank and in hand 990 1,360 1,334 6,110 6,052 6,729 Creditors: amounts falling due within one (5,996) (5,227) (6,745)yearNet current assets / (liabilities) 114 825 (16)Total assets less current liabilities 11,951 11,626 11,819Creditors: amounts falling due after more (2,223) (2,376) (2,332)than one yearNet assets 9,728 9,250 9,487 Capital and reservesCalled up share capital 4,084 3,985 4,084Share premium account 5,974 5,833 5,974Shares to be issued - 125 -Profit and loss account (330) (693) (571)Equity shareholders' funds 9,728 9,250 9,487 Consolidated Cashflow Statementfor the period ended 30 September 2005 1 April 2005 to 1 April 2004 to 1 April 2004 to 30 September 2005 30 September 2004 31 March 2005 Unaudited Unaudited Audited £'000 £'000 £'000Net cash (outflow) / inflow from operating (1) (192) 490activities Returns on investments and servicing offinanceInterest received 331 312 596Interest paid (402) (324) (683)Interest element of hire purchase and (1) - (5)finance leasesNet cash outflow from returns on (72) (12) (92)investments and servicing of finance Taxation - - -Capital expenditure and financial investmentPurchase of tangible fixed assets (115) (45) (105)Sale of tangible fixed assets 4 - 12Net cash outflow from capital expenditure (111) (45) (93)and financial investment AcquisitionsPurchase of subsidiary undertakings - - (112)Cash at bank acquired with subsidiary - - (24)Net cash outflow from acquisitions - - (136)Net cash (outflow) / inflow before (184) (249) 169management of liquid resources andfinancing Management of liquid resourcesMovement in blocked cash collateral account (331) 282 248 FinancingRepayment of loan notes - (352) (622)Capital element of finance leases (8) (9) (32)Bank loan repayments (152) (152) (303)Net cash outflow from financing (160) (513) (957)Decrease in cash (675) (480) (540) NOTE: Analysis of cash movementsMovement in total Group cash (344) (762) (788)Movement in blocked cash collateral account (331) 282 248Movement in total cash availability (675) (480) (540) Notes to the Financial Statements 1. Nature of the financial information The Company prepares statutory accounts annually to 31 March. These are theinterim accounts covering the six months ended 30 September 2005. The results for the period from 1 April 2004 to 30 September 2004 and year to 31March 2005 are extracted from the previous year's interim and final accountsrespectively. The results for the six months ended 30 September 2005 and the period from 1April 2004 to 30 September 2004 are unaudited, and have been prepared inaccordance with the accounting policies set out in the Company's annual report. The financial information set out above does not constitute statutory accountswithin the meaning of section 240 of the Companies Act 1985. The results for theyear ended 31 March 2005 are an abridged version of the full statutory accountsthat have an unqualified audit report and have been delivered to the Registrarof Companies. 2. Taxation The taxation charge for the six months ended 30 September 2005 and 2004 is basedon the anticipated tax position for the full year. 3. Earnings per share Basic earnings per share for the period ended 30 September 2005 is calculated bydividing the profit for the period of £241,000 (period ended 30 September 2004profit of £229,000, year ended 31 March 2005 profit of £393,000) by 16,338,086(period ended 30 September 2004: 15,944,642, year ended 31 March 2005:15,956,500) being the weighted average number of shares in issue during theperiod. The adjusted basic earnings per share for the period ended 30 September 2005 iscalculated by dividing the profit for the period before impairment of goodwillof £241,000 (period ended 30 September 2004: profit of £229,000, year ended 31March 2005: profit of £643,000) by 16,338,086 (period ended 30 September 2004:15,944,642, year ended 31 March 2005: 15,956,500) being the weighted averagenumber of shares during the period. The diluted earnings per share has been calculated by dividing the profit forthe period to 30 September 2005 of £241,000 (period ended 30 September 2004:£229,000, year ended 31 March 2005: £393,000) by the weighted diluted averagenumber of shares being 16,398,791 (period ended 30 September 2004: 16,233,239,year ended 31 March 2005: 16,666,937). 4. Dividend The Company does not propose the payment of a dividend. The Interim Report will be posted to Shareholders shortly. Copies will beavailable free of charge from the Company's registered office: Clarity CommerceSolutions plc. 1 Netherhampton Business Centre, Salisbury, Wiltshire SP2 8PU. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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