20 Mar 2009 07:00
20 March 2009
STILO INTERNATIONAL PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR TWELVE MONTHS ENDED 31 DECEMBER 2008
Stilo International plc ("Stilo" or the "Company") (LSE:STL), the AIM quoted software and services company, today announces its results for the twelve month period ended 31 December 2008.
Highlights
Profit before taxation of £333,000 (2007: Loss of £62,000)
Sales revenues increased by 27% to £3,086,000 (2007: £2,436,000)
New release of JETView digital publishing solution for airline maintenance
Release of OmniMark version 9, for XML content processing
Test release of Stilo Migrate, the world's first online XML content conversion service
New professional service contract wins include Agusta Westland, BAe, Autozone and Schlumberger
Improved cash position of £546,000 as at 31 December 2008 (2007: £236,000)
Barry Welck, Chairman, commenting on the Company's performance, stated:
'We have continued to make excellent progress during the 12 months ended 31st December 2008, reporting record sales and profits, two new product releases, one major software upgrade, several significant professional services contract wins and a steadily improving cash position.
In 2009 our revenues will be derived from software licence sales, software maintenance contracts, professional services and Stilo Migrate, our recently released Software as a Service (SaaS) offer for conversion of digital content to XML. Our customers are drawn from a broad range of markets, including Aerospace & Defence, Manufacturing, High Tech, Publishing and Government. With more than half of our sales revenues originating from North America and Continental Europe, we are reasonably well protected from the adverse effects of the weak sterling. These various factors combine to give the Board confidence that the Company has the resilience required to face the global economic challenges that lie ahead in 2009.'
Enquiries:
| Les Burnham, Chief Executive Stilo International plc | 01793 441444 |
| Russell Cook / Carl Holmes Charles Stanley Securities (Nominated Adviser and Broker) | 020 7149 6000 |
Chairman's Statement
I am pleased to announce Stilo's results for the twelve months ended 31 December 2008 and to report upon the continued progress made by the Group during the year.
We have continued to make excellent progress during the 12 months ended 31 December 2008, reporting record sales revenues and profits, two new product releases, one major software upgrade, several significant professional services contract wins and a steadily improving cash position.
Strategy
Stilo provides software and professional services to large organisations across a broad range of industry sectors, including Aerospace and Defence, Engineering, High Tech, Publishing and Government.
We operate in two key market sectors: the XML content processing market supporting enterprise publishing solutions, and the SAP systems market for product lifecycle management and document management solutions.
The XML content processing market is driven by the growing requirement for large organisations to aggregate content from disparate sources and publish complex information, technical and non-technical, to the web. Our customers publish aircraft and military equipment technical manuals, automotive repair data, product data sheets, online news and regulatory reports. Our customers include Boeing, Airbus, Autozone, Volvo, British Library, Wolters Kluwer, Japan Patent Office and the European Parliament.
The SAP market for product lifecycle management and document management solutions is driven by a requirement for organisations to better manage and integrate their business processes and workflow, tracking product information from initial design through to manufacture, delivery and invoice. Our customers are predominantly engineering companies operating in the Aerospace and Defence sector, and include Agusta Westland, BAe Systems and EADS.
Operations
As at 31 December 2008, the group employed 22 full-time employees, with 12 located in North America and 10 in Europe. In addition, extensive use is made of contractors in our professional services and product development activities.
The XML content processing business is centred in Canada, with the professional services team serving particularly the requirements of North American customers.
The SAP business division is based in the UK, focussed primarily upon sales to UK and European customers.
Results
The Company has continued to make progress for the eighth successive year since its incorporation in 2000.
In 2008 the results show an operating profit of £331,000 (2007: Operating loss £62,000). There was a profit from continuing operations after taxation of £388,000 (2007: £94,000). This is a substantial improvement over the previous year, and a record for the Company.
Total sales revenues for the period increased by 27% to £3,086,000 (2007: £2,436,000). Administrative expenses increased by 5% in the year to £2,244,000 (2007: £2,128,000).
Sales growth was primarily driven by increases in professional services revenues across the Company, and in particular within the SAP division, which had a strong performance in the second half of the year resulting from highly competitive contract wins at Agusta Westland, BAe Systems and EADS. Our success in professional services engagements reflects the very high level of technical expertise of our employees in all target business areas.
The Company had a cash balance of £546,000 as at 31 December 2008 (31 December 2007: £236,000).
In June 2008 two directors of the Company, Les Burnham and David Ashman collectively subscribed for 5,000,000 new ordinary shares of 1p each in Stilo at subscription price of 1.8p per share.
The accompanying results for the year ended 31 December 2008 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and now required for AIM companies.
Development
We continue to regard the development of intellectual property as essential for driving the long-term growth and profitability of the Company. The ongoing development of our flagship product, OmniMark, is undertaken from Canada, while the development of Migrate, a new, ground-breaking, online content conversion service, is directed from Europe. Research and development expenditure for the year was £310,000 (2007: £245,000).
A professional services engagement undertaken with ABX Air Inc., resulted in the release in April 2008 of JETView, a digital publishing solution for airline maintenance.
In the SAP business division, we have now released the first three of a planned range of 'solutions accelerators', all of which have arisen as a result of professional services engagements undertaken with our customers.
Products and Solutions
OmniMark
OmniMark provides an application development and high performance run-time environment for XML content processing applications. Users of OmniMark are able to reduce significantly the time and costs of developing and maintaining new content processing applications, whilst ensuring high-performance levels of execution which is especially critical to major web applications. OmniMark has been deployed by customers around the world over a fifteen year period, and is a robust, well-proven technology. OmniMark v9 was released in December 2008.
Stilo interactive Technical Information Publisher (iTIP)
Originally developed for the Canadian Military, Stilo's iTIP has evolved over a ten year period as a proven approach to distributing complex technical information to widely distributed user communities, using simple web browsers.
iTIP provides a complete solution for organisations that create, manage and deliver technical information across the full product lifecycle, including mission-critical equipment systems in the aerospace, defence, automotive, transportation, manufacturing and engineering sectors.
In April 2008 Stilo released JETView, a digital publishing solution for airline maintenance documentation, developed in association with ABX Air Inc., and based upon the iTIP publishing framework.
Stilo Migrate
Stilo Migrate, the world's first on-demand content migration service, is the embodiment of Stilo's extensive content engineering expertise and advanced content processing technology. It is set to revolutionise the growing market for content migration services. The initial beta test version was released in December 2008, to very good customer acclaim, Accessible 24x7 from anywhere in the world, users are able to upload source documents over the internet and migrate content to target XML formats, on a pay-as-you-use basis.
Outlook
In 2009 our revenues will be derived from software licence sales, software maintenance contracts, professional services and Stilo Migrate, our recently released Software as a Service (SaaS) for conversion of digital content to XML. Our customers are drawn from a broad range of markets, including Aerospace & Defence, Manufacturing, High Tech, Publishing and Government. With more than half of our sales revenues originating from North America and Continental Europe, invoiced in US dollars and euros respectively, we are reasonably well protected from the adverse effects of weak sterling. These various factors combine to give the Board confidence that the Company has the resilience required to face the global economic challenges that lie ahead in 2009.
Barry Welck
Chairman
Group Income Statement
Year ended 31 December
| 2008 £'000 | 2007 £'000 | ||||
| Revenue - continuing operations | 3,086 | 2,436 | |||
| Cost of sales | (481) | (240) | |||
| ________ | ________ | ||||
| Gross profit | 2,605 | 2,196 | |||
| Administrative expenses | (2,244) | (2,128) | |||
| Exceptional expenses | - | (105) | |||
| Amortisation of intangible assets | (30) | (30) | |||
| ________ | ________ | ||||
| Operating profit / (loss) | 331 | (67) | |||
| Finance Income | 2 | 5 | |||
| ________ | ________ | ||||
| Profit / (loss) before tax | 333 | (62) | |||
| Income tax | 55 | 156 | |||
| ________ | ________ | ||||
| Profit for the year attributable to the equity shareholders of the parent company | 388 | 94 | |||
| ________ | ________ | ||||
| Earnings per share - basic | 0.36p | 0.09p | |||
| Earnings per share - diluted | 0.34p | 0.09p | |||
Group Statement of Recognised Income and Expense
for the year ended 31 December
| 2008 £'000 | 2007 £'000 | |
| Foreign currency translation differences | 64 | 26 |
| _________ | _________ | |
| Net income recognised directly in equity | 64 | 26 |
| Profit for the year | 388 | 94 |
| _________ | _________ | |
| Total recognised income and expense for the year attributable to the equity shareholders of the parent company | 452 | 120 |
| _________ | _________ |
Group Balance Sheet
As at 31 December
| 2008 £'000 | 2007 £'000 | ||
| Non-current assets | |||
| Goodwill | 1,683 | 1,671 | |
| Other intangible assets | 287 | 224 | |
| Plant and equipment | 28 | 32 | |
| Deferred tax asset | 131 | 100 | |
| _________ | _________ | ||
| 2,129 | 2,027 | ||
| Current assets | |||
| Trade and other receivables | 958 | 725 | |
| Income tax receivable | 51 | 56 | |
| Cash and cash equivalents | 546 | 236 | |
| _________ | _________ | ||
| 1,555 | 1,017 | ||
| Total Assets | 3,684 | 3,044 | |
| _________ | _________ | ||
| Current Liabilities | |||
| Trade and other payables | 860 | 765 | |
| Long Term Liabilities | |||
| Other payables | 33 | 51 | |
| _________ | _________ | ||
| Total Liabilities | 893 | 816 | |
| _________ | _________ | ||
| Equity attributable to equity holders of the parent company | |||
| Called up share capital | 5,618 | 5,568 | |
| Share premium account | 5,524 | 5,485 | |
| Merger reserve | 658 | 658 | |
| Profit and loss account | (9,009) | (9,483) | |
| _________ | _________ | ||
| Total equity | 2,791 | 2,228 | |
| _________ | _________ | ||
| Total equity and liabilities | 3,684 | 3,044 | |
| _________ | _________ | ||
Group Cash Flow
Year ended 31 December
| 2008 | 2007 | ||||
| £'000 | £000 | £'000 | £'000 | ||
| Cash flows from operating activities | |||||
| Profit / (loss) before taxation | 333 | (62) | |||
| Adjustment for depreciation and amortisation | 50 | 61 | |||
| Adjustment for investment income | (2) | (5) | |||
| Adjustment for foreign exchange differences | 45 | 11 | |||
| Adjustment for share based payments | 22 | - | |||
| _________ | _________ | ||||
| Operating cash flows before movements in working capital | 448 | 5 | |||
| (Increase) in trade and other receivables | (233) | (168) | |||
| Increase in payables | 95 | 89 | |||
| _________ | _________ | ||||
| Cash generated / utilised) from operations | 310 | (74) | |||
| Tax credit received | 26 | 17 | |||
| _________ | _________ | ||||
| Net cash utilised in operating activities | 336 | (57) | |||
| Cash flows from investing activities | |||||
| Finance income | 2 | 5 | |||
| Acquisition of intangible assets | (93) | (106) | |||
| Purchase of plant and equipment | (24) | (26) | |||
| Goodwill purchased | - | (90) | |||
| _________ | _________ | ||||
| Net cash used in investing activities | (115) | (217) | |||
| Financing activities | |||||
| Issue of ordinary share capital | 90 | 90 | |||
| Share issue costs | (1) | - | |||
| _________ | _________ | ||||
| Net cash in from financing activities | 89 | 90 | |||
| Net increase / (decrease) in cash and cash equivalents | 310 | (184) | |||
| Cash and cash equivalents at beginning of year | 236 | 420 | |||
| _________ | _________ | ||||
| Cash and cash equivalents at end of year | 546 | 236 | |||
| _________ | _________ | ||||
Notes to the preliminary financial results
1. The figures for the year ended 31 December 2008 and 2007 do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1985. The figures for the year ended 31 December 2008 have been extracted from the statutory accounts for that year on which the auditor has issued an unqualified audit report which have yet to be delivered to the Registrar of Companies. The figures for the year ended 31 December 2007 have been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and on which the auditor has issued an unqualified audit report, having been restated under International Financial Reporting Standards. No statement has been made by the auditor under Section 237(2) or (3) of the Companies Act 1985 in respect of either of these sets of accounts. This announcement was approved by the board of directors on 19 March 2009.
2. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the International Accounting Standards Board ('IASB') and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB (together 'IFRS') as endorsed by the European Union. The information in this preliminary statement has been extracted from the audited financial statements for the year ended 31 December 2008 and as such, does not contain all the information required to be disclosed in the financial statements prepared in accordance with the International Financial Reporting Standards ('IFRS').
3. Earnings per Share. The basic earnings per share is calculated on the profit for the financial year of £388,000 (2007: £94,000), and on the weighted average number of shares in issue during the year of 107,228,470 (2007: 102,103,470). The fully diluted earnings per share takes account of outstanding options which results in a weighted average number of shares in issue during the year of 114,417,855 (2007: 109,651,090).
4. The directors do not recommend the payment of a final dividend (2007: £nil).
5. These financial statements are presented in sterling as that is the currency of the primary economic environment in which the Group operates.
6. Copies of the 2008 Annual Report and Accounts will be posted to shareholders in April. Further copies may be obtained by contacting the Company Secretary at the registered office. Alternatively the 2008 Annual Report and Accounts will be available to download from the investor relations section on the Company's website www.stilo.com. The annual general meeting is due to be held at 2 Bloomsbury Street, London at 11.30am on 19 May 2009.