13 Apr 2010 07:00
13 April 2010
PROACTIS Holdings PLC
Interim results for the six months ended 31 January 2010
PROACTIS Holdings PLC ("PROACTIS" or the "Company") the specialist Spend Control software provider, is today issuing its interim results for the six month period to 31 January 2010.
KEY POINTS
w Operating profit ahead at £384,000 (2009: £362,000)
w Continued strong cash generation from operating activities of £589,000 (2009: £361,000)
w Revenues increased by 10% year on year to £3.47m (2009: £3.15m)
- Good organic growth - 16 new name deals
- Very strong customer loyalty with 42 upgrade deals from existing customers
- Contracted and recurring support and maintenance revenues strong at £1.62m (2009: £1.34m)
w Expenses increased, in line with plan, £2.06m (2009: £1.91m) reflecting our investment in marketing
w The market opportunity remains very attractive for all of our products and territories including overseas which accounted for 15% of revenues
Rod Jones, Chief Executive Officer, commented:
"The first half was a period of good progress for Proactis.
With a healthy spread of business across the Commercial, Public and Not for Profit & Charities sectors we continue to deliver good results despite the general economic and current political environment. Spend control will be a key focus for the foreseeable future and our products are well placed to help our clients drive efficiencies into their organisations and enable their cost saving initiatives. We remain confident that we will deliver results for the year in line with market expectations."
Enquiries:
| PROACTIS Holdings PLC | Tel: 01937 545 070 |
| Rod Jones, Chief Executive Officer |
|
| Weber Shandwick Financial | Tel: 020 7067 0700 |
| Nick Oborne/John Moriarty |
|
| Daniel Stewart & Company plc | Tel: 020 7776 6550 |
| Simon Leathers / Emma Earl |
|
Notes to editors:
PROACTIS creates, sells and maintains specialist software which enables organisations to streamline, control and monitor all internal and external expenditure, other than payroll. PROACTIS is already used in over 350 organisations around the world from the commercial, public and not-for-profit sectors.
PROACTIS is a profitable, high growth business head quartered in Wetherby, West Yorkshire. It develops its own software using an in-house team of developers and sells through both direct and indirect channels via a number of Accredited Channel Partners.
PROACTIS floated on the AIM market of the London Stock Exchange in June 2006.
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REPORT
We are pleased to report our interim results for the six month period to 31 January 2010, a period of continued progress for the Group despite the difficult economic environment.
We continue to deliver our products through both our direct sales team and Channel Partners. Both routes to markets have held up well. Following the successful growth of our US sales last year, we have further developed our geographic coverage with new partnerships and business plans in Spain, Portugal and Latin America.
Our consultancy and contracted maintenance revenues have grown again and our visibility of forward revenues in these areas is stronger than ever.
We have increased our marketing expenditure to continue the work and initiatives started last financial year following the independent Gartner rating, which validated our product as best in class. We are looking for this investment to result in a more consistent pattern of lead generation.
The core elements of our strategy remain. These are:
- Revenue growth
§ Our new Licence sales have held up well with a further 16 new name deals and 42 upgrade deals from existing customers. Our consultancy business is growing well and our maintenance and hosted solutions continue to make strong progress.
§ We are introducing an additional "go to market strategy" that will promote a value based proposition, to increase our software as a service ("SaaS") business and give us a new contracted multi-year revenue stream.
- Low cost model
§ Our Commercial Off the Shelf ("COTS") software model is well proven. It minimises engineering, QA, support and implementation costs and allows us to educate our Accredited Channel Partners to make them self-sufficient, whilst ensuring that our clients use up to date software releases and get value for their maintenance fees.
Financial overview
Revenues increased by 10% to £3.47m from £3.15m for the same period last year, with solid performances from both direct and indirect licences, consultancy and recurring maintenance revenues. Gross margin delivered was £2.45m (2009: £2.27m).
During the period we invested in sales and marketing headcount to grow the business in the longer term. Given our strong visibility on forward order book in the consultancy business we also took the opportunity to take on additional headcount to further improve profitability in that part of our business; this improvement has been evident in the period since 31 January 2010, following the initial training and induction period. With this additional investment, our overhead base increased by £150,000 to £2.06m (2009: £1.91m).
The operating profit was £384,000 (2009: £362,000).
The quality of the earnings was, again, excellent and followed the trend of the previous 18 months. Cash generated from operating activities improved to £589,000 (2009: £361,000) and funded the payment of our maiden dividend (£311,000), bank debt repayment (£83,000) and our continued software development programme (£260,000).
The Group anticipates that it will start to pay corporation tax within the current financial period and this has impacted on earnings per share which reduced to 1.1p (2009: 1.3p).
Net cash at 31 January 2010 was £2.35m (31 July 2009: £2.38m).
Outlook
The first half was a period of good progress for Proactis.
With a healthy spread of business across the Commercial, Public and Not for Profit & Charities sectors we continue to deliver good results despite the general economic and current political environment. Spend control will be a key focus for the foreseeable future and our products are well placed to help our clients drive efficiencies into their organisations and enable their cost saving initiatives. We remain confident that we will deliver results for the year in line with market expectations.
Alan Aubrey Rod Jones
Chairman Chief Executive Officer
13 April 2010
Condensed consolidated income statement
for the six months ended 31 January 2010
|
|
| Unaudited | Unaudited | Audited |
|
|
| 6 months to 31 Jan 2010 | 6 months to 31 Jan 2009 | Year ended 31 July 2009 |
|
|
| £000 | £000 | £000 |
| Revenue |
|
|
|
|
| Continuing |
| 3,469 | 3,150 | 7,001 |
|
|
|
|
|
|
| Cost of sales |
| (1,024) | (881) | (2,006) |
|
|
| ------------- | ------------- | ------------- |
| Gross profit |
| 2,445 | 2,269 | 4,995 |
|
|
|
|
|
|
| Administrative costs |
| (2,061) | (1,907) | (4,064) |
|
|
| ------------- | ------------- | ------------- |
| Operating profit before non-recurring items, amortisation of customer related intangibles and share based payment charges |
| 458 | 431 | 1,093 |
| Amortisation of customer related intangibles |
| (60) | (60) | (120) |
| Share based payment charges |
| (14) | (9) | (42) |
|
|
|
|
|
|
|
|
| ------------- | ------------- | ------------- |
| Operating profit |
| 384 | 362 | 931 |
|
|
|
|
|
|
| Finance income |
| 2 | 27 | 33 |
| Finance expenses |
| (2) | (12) | (14) |
|
|
| ------------- | ------------- | ------------- |
| Profit before taxation |
| 384 | 377 | 950 |
|
|
|
|
|
|
| Taxation |
| (52) | 29 | 46 |
|
|
| ------------- | ------------- | ------------- |
| Profit for the period |
| 332 | 406 | 996 |
|
|
| ------------- | ------------- | ------------- |
| Earnings per ordinary share : |
|
|
|
|
| - Basic |
| 1.1p | 1.3p | 3.2p |
|
|
| ------------- | ------------- | ------------- |
| - Diluted |
| 1.1p | 1.2p | 3.2p |
|
|
| ------------- | ------------- | ------------- |
The profit for the period is wholly attributable to equity holders of the parent Company.
All results arise from continuing operations. Condensed consolidated statement of comprehensive income
for the six months ended 31 January 2010
|
|
| Unaudited | Unaudited | Audited |
|
|
| 6 months to 31 Jan 2010 | 6 months to 31 Jan 2009 | Year ended 31 July 2009 |
|
|
| £000 | £000 | £000 |
|
|
|
|
|
|
| Amounts attributable to equity holders of the parent company |
|
| ||
|
|
|
|
|
|
| Profit for the period |
| 332 | 407 | 996 |
|
|
|
|
|
|
| Foreign exchange differences on retranslation of net assets of subsidiary undertakings |
| - | (16) | (28) |
|
|
| ------------- | ------------- | ------------- |
| Total comprehensive income for the period |
| 332 | 391 | 968 |
|
|
| ------------- | ------------- | ------------- |
Condensed consolidated statement of changes in equity
as at 31 January 2010
|
| Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited |
|
| Share capital | Share premium | Merger reserve | Capital reserve | Foreign exchange reserve | Retained earnings |
|
| £000 | £000 | £000 | £000 | £000 | £000 |
|
|
|
|
|
|
|
|
| At 1 August 2008 | 3,077 | 3,051 | 556 | 449 | - | (1,706) |
| Result for the period | - | - | - | - | - | 406 |
| Arising on translation of US assets | - | - | - | - | (16) | - |
| Issue of shares | 5 | - | - | - | - | (2) |
| Share based payment charges | - | - | - | - | - | 9 |
|
| ------------- | ------------- | ------------- | ------------- | ------------- | ------------- |
| At 31 January 2009 | 3,082 | 3,051 | 556 | 449 | (16) | (1,293) |
| Result for the period | - | - | - | - | - | 590 |
| Arising on translation of US assets | - | - | - | - | (12) | - |
| Share based payment charges | - | - | - | - | - | 33 |
|
| ------------- | ------------- | ------------- | ------------- | ------------- | ------------- |
| At 1 August 2009 | 3,082 | 3,051 | 556 | 449 | (28) | (670) |
| Result for the period | - | - | - | - | - | 332 |
| Dividend | - | - | - | - | - | (311) |
| Purchase of own shares | - | - | - | - | - | (25) |
| Issue of shares | 25 | - | - | - | - | (18) |
| Share based payment charges | - | - | - | - | - | 14 |
|
| ------------- | ------------- | ------------- | ------------- | ------------- | ------------- |
| At 31 January 2010 | 3,107 | 3,051 | 556 | 449 | (28) | (678) |
|
| ------------- | ------------- | ------------- | ------------- | ------------- | ------------- |
Condensed consolidated balance sheet
as at 31 January 2010
|
|
| Unaudited | Unaudited | Audited |
|
|
| As at 31 Jan 2010 | As at 31 Jan 2009 | As at 31 July 2009 |
|
|
| £000 | £000 | £000 |
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
| Property, plant & equipment |
| 105 | 119 | 108 |
| Intangible assets |
| 6,339 | 6,360 | 6,338 |
|
|
| ------------- | ------------- | ------------- |
|
|
| 6,444 | 6,479 | 6,446 |
|
|
| ------------- | ------------- | ------------- |
| Current assets |
|
|
|
|
| Trade and other receivables |
| 1,474 | 1,664 | 1,506 |
| Cash and cash equivalents |
| 2,520 | 1,612 | 2,626 |
|
|
| ------------- | ------------- | ------------- |
|
|
| 3,994 | 3,276 | 4,132 |
|
|
| ------------- | ------------- | ------------- |
| Total assets |
| 10,438 | 9,755 | 10,578 |
|
|
| ------------- | ------------- | ------------- |
| Current liabilities |
|
|
|
|
| Bank loans |
| (167) | (167) | (167) |
| Trade and other payables |
| (552) | (554) | (938) |
| Deferred income |
| (1,870) | (1,701) | (1,611) |
| Income taxes |
| (88) | - | (18) |
|
|
| ------------- | ------------- | ------------- |
|
|
| (2,677) | (2,422) | (2,734) |
|
|
| ------------- | ------------- | ------------- |
| Non-current liabilities |
|
|
|
|
| Bank loans |
| - | (166) | (83) |
| Deferred tax liabilities |
| (1,304) | (1,338) | (1,321) |
|
|
| ------------- | ------------- | ------------- |
|
|
| (1,304) | (1,504) | (1,404) |
|
|
| ------------- | ------------- | ------------- |
| Total liabilities |
| (3,981) | (3,926) | (4,138) |
|
|
| ------------- | ------------- | ------------- |
| Net assets |
| 6,457 | 5,829 | 6,440 |
|
|
| ------------- | ------------- | ------------- |
| Equity attributable to equity holders of the Company |
|
|
|
|
| Called up share capital |
| 3,107 | 3,082 | 3,082 |
| Share premium account |
| 3,051 | 3,051 | 3,051 |
| Merger reserve |
| 556 | 556 | 556 |
| Capital reserve |
| 449 | 449 | 449 |
| Foreign exchange reserve |
| (28) | (16) | (28) |
| Retained earnings |
| (678) | (1,293) | (670) |
|
|
| ------------- | ------------- | ------------- |
| Total equity |
| 6,457 | 5,829 | 6,440 |
|
|
| ------------- | ------------- | ------------- |
Total equity is wholly attributable to equity holders of the parent Company.
Condensed consolidated cash flow statement
for the six months ended 31 January 2010
|
|
| Unaudited | Unaudited | Audited |
|
|
| 6 months to 31 Jan 2010 | 6 months to 31 Jan 2009 | Year ended 31 July 2009 |
|
|
| £000 | £000 | £000 |
|
|
|
|
|
|
| Operating activities |
|
|
|
|
| Profit for the period |
| 332 | 406 | 996 |
| Amortisation of intangible assets |
| 259 | 225 | 449 |
| Depreciation |
| 26 | 31 | 60 |
| Net finance income |
| - | (15) | (19) |
| Income tax charge/(credit) |
| 52 | (29) | (46) |
| Share based payment charges |
| 14 | 9 | 42 |
|
|
| ------------- | ------------- | ------------- |
| Operating cash flow before changes in working capital |
| 683 | 627 | 1,482 |
| Movement in trade and other receivables |
| 32 | 202 | 320 |
| Movement in trade and other payables |
| (126) | (468) | (184) |
|
|
| ------------- | ------------- | ------------- |
| Operating cash flow from operations |
| 589 | 361 | 1,618 |
| Interest received |
| 2 | 27 | 33 |
| Interest paid |
| (2) | (12) | (14) |
| Income tax received/(paid) |
| 1 | (46) | 12 |
|
|
| ------------- | ------------- | ------------- |
| Net cash flow from operating activities |
| 590 | 330 | 1,649 |
|
|
| ------------- | ------------- | ------------- |
| Investing activities |
|
|
|
|
| Purchase of plant and equipment |
| (23) | (18) | (35) |
| Development expenditure capitalised |
| (260) | (207) | (410) |
|
|
| ------------- | ------------- | ------------- |
| Net cash flow from investing activities |
| (283) | (225) | (445) |
|
|
| ------------- | ------------- | ------------- |
| Financing activities |
|
|
|
|
| Proceeds from issue of new shares |
| 6 | 3 | 3 |
| Repayment of bank borrowing |
| (83) | (83) | (168) |
| Dividend payment |
| (311) | - | - |
| Purchase of own shares |
| (25) | - | - |
|
|
| ------------- | ------------- | ------------- |
| Net cash flow from financing activities |
| (413) | (80) | (165) |
|
|
| ------------- | ------------- | ------------- |
| Net (decrease)/increase in cash and cash equivalents |
| (106) | 25 | 1,039 |
| Cash and cash equivalents at the beginning of the period |
| 2,626 | 1,587 | 1,587 |
|
|
| ------------- | ------------- | ------------- |
| Cash and cash equivalents at the end of the period |
| 2,520 | 1,612 | 2,626 |
|
|
| ------------- | ------------- | ------------- |
Unaudited notes
Basis of preparation and accounting policies
PROACTIS Holdings PLC is a company incorporated in England and Wales under the Companies Act 2006.
The condensed financial statements are unaudited and were approved by the Board of Directors on 13 April 2010.
The interim financial information for the six months ended 31 January 2010, including comparative financial information, has been prepared on the basis of the accounting policies set out in the last annual report and accounts, with the exception of the amendment to IAS 1 (Presentation of Financial Statements) referred to below, and in accordance with International Financial Reporting Standards ("IFRS"), including IAS 34 (Interim Financial Reporting), as issued by the International Accounting Standards Board and adopted by the European Union.
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may subsequently differ from those estimates.
In preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same, in all material respects, as those applied to the consolidated financial statements for the year ended 31 July 2009, with the exception of the change in accounting policy in respect of Amendments to IAS 1 (Presentation of Financial Statements)where the Group is now required to produce a statement of comprehensive income setting out all items of income and expense relating to non‐owner changes in equity. This replaces the statement of recognised income and expense.
There is a choice between presenting comprehensive income in one statement or in two statements comprising an income statement and a separate statement of comprehensive income. The Group has elected to present comprehensive income in two statements.
Going concern assumption
The Group manages its cash requirements through a combination of operating cash flows and long term borrowings.
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current lending facilities.
Consequently, after making enquires, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis of accounting in preparing the interim financial statements.
Information extracted from 2009 Annual Report
The financial figures for the year ended 31 July 2009, as set out in this report, do not constitute statutory accounts but are derived from the statutory accounts for that financial year.
The statutory accounts for the year ended 31 July 2009 were prepared under IFRS and have been delivered to the Registrar of Companies. The auditors reported on those accounts. Their report was unqualified, did not draw attention to any matters by way of emphasis and did not include a statement under Section 498(2) or 498(3) of the Companies Act 2006.
The Board confirms that to the best of its knowledge:
w The condensed set of financial statements has been prepared in accordance with IAS34 'Interim Financial Reporting' as adopted by the EU;
w The interim management report includes a fair review of the information required by :
- 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
- DTR4.2.8R 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
Rod Jones Tim Sykes
Chief Executive Officer Chief Financial Officer
13 April 2010