TIDMARTA

RNS Number : 7725I

Artilium PLC

30 March 2015

30 March 2015

Artilium plc

("Artilium" or the "Company")

Half yearly results for the six months ended 31 December 2014

Artilium plc (LSE/AIM: ARTA), the AIM quoted provider of innovative telecommunication software and solutions, announces its unaudited half yearly results for the six months ended 31 December 2014.

Financial Highlights

-- Revenue for the six months to 31 December 2014 was EUR 4.1 million (2013: EUR 5.5 million)

-- Adjusted EBITDA of EUR 0.1 million (2013: EUR 0.8 million)

-- Net loss after tax of EUR 0.2 million (2013: net profit of EUR 0.3million)

Commenting on the results, Jan-Paul Menke, Non-Executive Chairman of Artilium said:

"2014 was a challenging year for Artilium as it transitioned from being a project focused to a subscriber focused company whilst at the same time facing fierce pricing pressure from mobile operators. I am pleased to see that the transformation, led by our new CEO Bart Weijermars, is well underway and that we have already seen some rewards with a record amount of requests from clients for our services and products. We significantly increased investment in 2014 in order to improve our software offering and we are now capable of offering it in a flexible cloud solutions format. We believe that these developments put us in a strong position to add value to our customers on an international scale and for the prospect of revenue and cash flow growth over the next twelve months. I would like to thank all the Artilium employees for their efforts the last 6 months. I would also take the opportunity to thank our shareholders for their patience and continuing support. We are more focussed than ever on delivering value to them.

For further information please contact:

 
 Artilium PLC:                          +32 (0)50230300 
 Jan-Paul Menke - Non-Executive 
  Director, Chairman 
  Bart Weijermars - CEO - Executive 
  Director 
  Bote De Vries - Non- Executive 
  Director 
 
 FinnCap Ltd (nominated advisor) 
  Stuart Andrews / Scott Mathieson      +44 20 7220 0500 
 
 
 

Chief Executive's Statement

Introduction

The first half of this financial year has seen the first evidence of the changes and adjustments that the company had to make in order to stay competitive in the Belgian marketplace with its United Telecom business together with the changing business model in the company software development business.

The company's main line of business is delivering our real time software to mobile operators. We have concentrated on expanding and further professionalising the release delivery process in this part of the business. We are transforming the business model from a project based revenue model to a license model based on the number of subscribers. This has been done in light of the increased pressure of mobile operators on project expenses and the upside potential of a subscriber based model. The reduction of revenue that we have seen in the first half of the year is a direct result of a number of larger one-off implementation and hardware projects finished in the last financial year. The core revenues from licenses and maintenance contracts have remained stable. The focus going forward will be on filling the capacity of the platform already in place and at the same time expanding the offering internationally. A number of interesting prospects give us the comfort that we can grow our business in this area.

The lower margin traffic re-sales of mobile, fixed and broadband business has experienced very challenging conditions especially in the mobile domain. Mobile operators in Belgium have lowered their prices significantly and this has had an impact on the United Telecom revenue. As a result United Telecom has lowered its prices to resellers and MVNO's which resulted in a decrease in revenue. This step has been taken in order to secure the future business and to enable the MVNO's of United Telecom to develop a profitable business so that they can start growing again. The economic benefits of the contracts which we have already announced have not been realised in the first half of the financial year as most implementations have only been finalised since the period end. We expect this effect to start showing in the second half of the year.

Having taken these important steps, and accepted their inevitable short term impact on the top-line, we believe that their implementation will help us to develop a healthy business in Belgium and beyond.

Financial results

Reported revenue for the six months to 31 December 2014 of EUR4.1million (2013: EUR5.5 million) was generated primarily from maintenance and professional services rendered to existing customers and by United Telecom fixed calling, broadband and mobile services. The Company generated a gross profit of EUR3.0 million or 74.9% of reported revenue (2013: EUR4.0 million or 71.9% of reported revenue) and generated an adjusted EBITDA of EUR0.1 million (2013: EUR0.8 million).

The company generated a net loss after tax of EUR0.2 million (2013: net profit after tax of EUR 0.3 million).

Outlook

Management is focused on enlarging the customer base for managed services that we can deliver with the ARTA software. As mobile operators become more focussed on cost savings, we believe that the ARTA platform, with its high performance and low cost IT engine, is a unique asset and management anticipate that current discussions with prospects should lead to further revenue growth going forward.

With respect to United Telecom we are looking to expand its position with selected additions and new distribution channels in order to restore revenue levels.

Forward Looking Statements

This report contains certain "forward looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate", "believe", "estimate", "expect", and "intend" and words or phrases of similar import, as they relate to the Company or its subsidiaries or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, customer relations, relationships with vendors, borrowing arrangements, interest rates, foreign exchange rates, litigation, governmental regulation and supervision, seasonality, product introductions and acceptance, technological change, changes in industry practices, one-time events and other factors described herein and in other announcements made by the Company. Based upon changing conditions, should any one or more of these risks or uncertainties materialise, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward-looking statements.

* * * * *

CONDENSED CONSOLIDATED INCOME STATEMENT

 
                                                     6 months      6 months      Year 
                                                        ended         ended     ended 
                                                  31 December   31 December   30 June 
                                                         2014          2013      2014 
                                                    Unaudited     Unaudited   Audited 
                                          Notes       EUR'000       EUR'000   EUR'000 
---------------------------------------  ------  ------------  ------------  -------- 
 Continuing Operations 
 Revenue                                                4.065         5.502    10.150 
 Cost of sales                                         (1019)       (1.542)   (2.292) 
---------------------------------------  ------  ------------  ------------  -------- 
 Gross profit                                           3.046         3.960     7.858 
 Other operating income                                    76           191       183 
 Administrative expenses                              (3.311)       (3.631)   (7.319) 
 Restructuring costs                                    (118)         (324)     (644) 
 Operating (loss)/Profit                                (307)           196        78 
 Financial result                                          15            59      (60) 
---------------------------------------  ------  ------------  ------------  -------- 
 (Loss)/Profit before tax                               (292)           255        18 
 Tax credit                                                70            80       152 
                                         ------  ------------  ------------  -------- 
 (Loss)/Profit for the period 
  from continuing operations                            (222)           335       170 
---------------------------------------  ------  ------------  ------------  -------- 
 Basic and diluted (loss)/ earnings 
  per share from continuing operations 
  (pence)                                   4          (0,10)          0,16      0,08 
---------------------------------------  ------  ------------  ------------  -------- 
 

A Key performance indicator for the company is adjusted EBITDA. This was EUR 0.1 million for the 6 months to December 2014 (2013:EUR 0.8 million). The reconciliation of adjusted EBITDA to the income statement in disclosed below.

Reconciling table operating result-adjusted EBITDA

 
                                                  Unaudited 
                                                    EUR'000 
 ----------------------------------------------  ---------- 
 Operating (Loss)/Profit                              (307) 
 Restructuring costs                                    118 
 Depreciations, amortizations and impairments           309 
-----------------------------------------------  ---------- 
 Adjusted EBITDA                                        120 
 

CONDENSED CONSOLIDATED INCOME STATEMENT OF COMPREHENSIVE INCOME

 
                                            6 months      6 months      Year 
                                               ended         ended     ended 
                                         31 December   31 December   30 June 
                                                2014          2013      2014 
                                           Unaudited     Unaudited   Audited 
                                             EUR'000       EUR'000   EUR'000 
 -------------------------------------  ------------  ------------  -------- 
 (Loss)/ Profit for the period                 (222)           335       170 
 Other comprehensive (loss)/income: 
 Exchange differences on translation 
  of foreign operations                         (66)         (103)     (261) 
 Total comprehensive (loss)/income 
  for the period                               (288)           232      (91) 
--------------------------------------  ------------  ------------  -------- 
 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
                                              6 months      6 months                  Year 
                                                 ended         ended                 ended 
                                           31 December   31 December               30 June 
                                                  2014          2013                  2013 
                                             Unaudited     Unaudited               Audited 
                  Notes                        EUR'000       EUR'000               EUR'000 
 ---------------------------------------  ------------  ------------  -------------------- 
 Non-current assets 
 Goodwill                                       13.726        13.726                13.726 
 Intangible assets                               1.596         2.076                 1.823 
 Property, plant and equipment                     528           282                   240 
 Deferred tax asset                                270           270                   270 
                                                16.120        16.354                16.059 
 ---------------------------------------  ------------  ------------  -------------------- 
 Current assets 
 Inventories                                        46            27                    43 
 Trade and other receivables                     8.246         2.551                 2.348 
 Other deposit                                       -           420                     - 
 Cash and cash equivalents                         207           923                   564 
                                                 8.499         3.921                 2.955 
 ---------------------------------------  ------------  ------------  -------------------- 
 Total assets                                   24.619        20.275                19.014 
----------------------------------------  ------------  ------------  -------------------- 
 
 Non-current liabilities 
 Deferred tax liabilities                          415           579                   497 
                                                   415           579                   497 
 ---------------------------------------  ------------  ------------  -------------------- 
 Current liabilities 
 Trade and other payables                        9.161         4.526                 7.428 
 Bank loans                                        215           150                   150 
 Borrowings                                          -           420                     - 
 Total liabilities                               9.791         5.675                 4.737 
----------------------------------------  ------------  ------------  -------------------- 
 
 
 
 Equity 
 Share capital                   5     14.924     14.181     14.181 
 Share premium account                 46.682     46.586     46.586 
 Merger relief reserve                  1.488      1.488      1.488 
 Capital redemption reserve      5      6.503      6.503      6.503 
 Share based payment reserve            3.246      3.246      3.246 
 Translation reserve                  (2.146)    (1.922)    (2.080) 
 Own shares                           (2.336)    (2.336)    (2.336) 
 Retained deficit                    (53.533)   (53.146)   (53.311) 
 Total equity                          14.828     14.600     14.277 
------------------------------      ---------  ---------  --------- 
 Total liabilities and equity          24.619     20.275     19.014 
------------------------------      ---------  ---------  --------- 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                                                                 Merger                 Capital             Share based 
                                                  Share premium                  relief              redemption                 payment             Translation                                        Retained 
                          Share capital                 account                 reserve                 reserve                 reserve                 reserve              Own shares                 deficit                 Total 
                                Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000               Eur'000 
                 ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 Balance at 1 
  July 2014                      14.181                  46.586                   1.488                   6.503                   3.246                 (2.080)                 (2.336)                (53.311)                14.277 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 
 Unaudited: 
 Nominal value 
  of shares 
  issued                            743                       -                       -                       -                       -                       -                       -                       -                   743 
 Premium 
  arising on 
  issue 
  of placement 
  shares                              -                      96                       -                       -                       -                       -                       -                       -                    96 
 Transaction 
  with owners                    14.924                  46.682                   1.488                   6.503                   3.246                 (2.080)                 (2.336)                (53.311)                15.116 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 Profit for the 
  period                              -                       -                       -                       -                       -                       -                       -                   (222)                 (222) 
 Exchange 
  differences 
  on 
  translation 
  of foreign 
  exchange                            -                       -                       -                       -                       -                    (66)                       -                       -                  (66) 
 
 Total 
  comprehensive 
  income 
  for the 
  period                              -                       -                                               -                       -                    (66)                       -                   (222)                 (288) 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 
 
 Balance at 31 
  December 2014                  14.924                  46.682                   1.488                   6.503                   3.246                 (2.146)                 (2.336)                (53.533)                14.828 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 
                                                                                 Merger                 Capital             Share based 
                                                  Share premium                  relief              redemption                 payment             Translation                                        Retained 
                          Share capital                 account                 reserve                 reserve                 reserve                 reserve              Own shares                 deficit                 Total 
                                Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000                 Eur'000               Eur'000 
                 ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 Balance at 1 
  July 2013                      14.060                  46.501                   1.488                   6.503                   3.246                 (1.819)                 (2.336)                (53.481)                14.162 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 
 Unaudited: 
 Nominal value 
  of shares 
  issued                            121                       -                       -                       -                       -                       -                       -                       -                   121 
 Premium 
  arising on 
  issue 
  of placement 
  shares                              -                      85                       -                       -                       -                       -                       -                       -                    85 
 Transaction 
  with owners                    14.181                  46.586                   1.488                   6.503                   3.246                 (1.819)                 (2.336)                (53.481)                14.368 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 Profit for the 
  period                              -                       -                       -                       -                       -                       -                       -                     335                   335 
 Exchange 
  differences 
  on 
  translation 
  of foreign 
  exchange                            -                       -                       -                       -                       -                   (103)                       -                       -                 (103) 
 
 Total 
  comprehensive 
  income 
  for the 
  period                              -                       -                       -                       -                       -                   (103)                       -                     335                   232 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 
 
 Balance at 31 
  December 2013                  14.181                  46.586                   1.488                   6.503                   3.246                 (1.922)                 (2.336)                (53.146)                14.600 
---------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  ----------------------  -------------------- 
 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 
                                              6 months      6 months      Year 
                                                 ended         ended     ended 
                                           31 December   31 December   30 June 
                                                  2014          2013      2013 
                                             Unaudited     Unaudited   Audited 
                                               EUR'000       EUR'000   EUR'000 
----------------------------------------  ------------  ------------  -------- 
 Net cash used in operating activities           (679)       (1.287)   (1.665) 
 Investing activities 
 Purchases of intangible fixed assets             (34)             -         - 
 Purchases of property, plant and 
  equipment                                      (329)         (216)     (207) 
 Proceeds from disposal of property, 
  plant and equipment                                -             -         9 
 Net cash used in investing activities           (363)         (216)     (198) 
----------------------------------------  ------------  ------------  -------- 
 Financing activities 
 Proceeds on issue of shares                       641             -         - 
 New borrowings received                           165           200       150 
 Interest paid                                    (21)          (44)      (43) 
 Borrowings/loans repayment/inflows              (100)         (192)     (142) 
 Net cash from financing activities                685          (36)      (35) 
----------------------------------------  ------------  ------------  -------- 
 Net (decrease)/increase in cash and 
  cash equivalents                               (357)       (1.539)   (1.898) 
 Cash and cash equivalents at beginning 
  of the period                                    564         2.462     2.462 
 Cash and cash equivalents at the 
  end of the period                                207           923     2.462 
----------------------------------------  ------------  ------------  -------- 
 

NOTES TO THE CONDENSED CONSOLIDATED HALF YEARLY FINANCIAL STATEMENTS

   1.      Nature of operations and general information 

Artilium plc and its subsidiaries (together 'the group') operates in the business to business communications sector delivering innovative software solutions which layer seamlessly over disparate fixed, mobile and IP networks to enable the deployment of converged services and applications. Artilium plc is incorporated and domiciled in the United Kingdom. The address of its registered office is 9-13 St. Andrew Street, London EC4A3AF, The Group's principal place of business is Belgium.

The Group's condensed consolidated half yearly financial statements are presented in round thousand Euro's because that is the principal currency the Group operates in. These condensed consolidated half yearly financial statements have been approved for issue by the directors on 30 March 2015. The financial information for the year ended 30 June 2014 set out in this half yearly report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 June 2014 have been filed with the Registrar of Companies.

   2.      Basis of preparation 

These unaudited condensed consolidated half yearly financial statements have been prepared in accordance with IAS 34 - Half yearly Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the 30 June 2014 annual consolidated financial statements. These condensed consolidated half yearly financial statements have been prepared in accordance with the accounting policies adopted in the last financial statements for the year ended 30 June 2014.

Basis of consolidation

The unaudited consolidated financial statements incorporate the financial statements of Artilium plc ('the Group') and the entities controlled by the Company (together 'the Group'). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these condensed consolidated half yearly financial statements.

Going concern

The directors have adopted the going concern basis in preparing the condensed consolidated half yearly financial statements, having carried out a going concern review. In carrying out the review the Directors have made assumptions about the revenue that will be generated to April 2016 based on its pipeline. These forecasts are considered in conjunction for the directors to satisfy themselves that the going concern assumption is appropriate

Intangibles

IAS 36 requires the Directors to consider intangible assets and goodwill for impairment on an annual basis, the last review was performed at 30 June 2014. This has not been updated at the interim date. The review of the carrying value of the Group's intangible assets and goodwill at 30 June 2014 was carried out and the assets were found to be unimpaired. The directors do not consider that any indicators of impairment exist at 31 December 2014.

   4.      Earnings per share 

The share options in issue do not have a dilutive effect due to the result for the period being a loss, and as a result diluted loss per share is the same as basic earnings per share.

 
 
                                            6 months      6 months          Year 
                                               ended         ended         ended 
                                         31 December   31 December       30 June 
                                                2014          2013          2014 
                                           Unaudited     Unaudited       Audited 
                                             EUR'000       EUR'000       EUR'000 
--------------------------------------  ------------  ------------  ------------ 
 Profits/(Losses) 
 Profits/(Losses) from continuing 
  operations for the purposes 
  of basic and diluted profit/(loss) 
  per share being net profits/(losses 
  )attributable to owners of 
  the parents                                  (222)           335           170 
                                                 No.           No.           No. 
--------------------------------------  ------------  ------------  ------------ 
 Number of shares 
 Weighted average number of              223.638.295   218.498.704   218.608.630 
  ordinary shares for the purposes 
  of basic and diluted earnings 
  /loss per share 
--------------------------------------  ------------  ------------  ------------ 
 
 Earnings/(Loss) per share                    (0,10)          0,15          0,08 
--------------------------------------  ------------  ------------  ------------ 
 
   5.      Share capital 
 
                                          6 months      6 months       Year 
                                             ended         ended      ended 
                                       31 December   31 December    30 June 
                                              2014          2013       2014 
                                         Unaudited     Unaudited    Audited 
                                           EUR'000       EUR'000    EUR'000 
 -----------------------------------  ------------  ------------  --------- 
 Fully paid ordinary shares: 
 Authorised: 
 300,000,002 (31 December 2013: 
  300,000,002) ordinary shares 
  of 5p each                                18.523        18.523     18.523 
------------------------------------  ------------  ------------  --------- 
 Issued and fully paid: 
 230,510,239 (31 December 2013: 
  218,615,041) ordinary shares 
  of 5p each                                14.924        14.181     14.181 
------------------------------------  ------------  ------------  --------- 
 Deferred ordinary shares: 
 Authorised: 
 900,447 (31 December 2013: 
  900,447) deferred ordinary 
  shares of GBP4.99 each                     6.503         6.503      6.503 
------------------------------------  ------------  ------------  --------- 
 
                                          6 months      6 months       Year 
                                             ended         ended      ended 
                                       31 December   31 December    30 June 
 
                                          No. '000      No. '000   No. '000 
-----------------------------------   ------------  ------------  --------- 
 Fully paid ordinary shares: 
 Balance at beginning of financial 
  year                                     218.925       216.474    216.474 
 Issued during the year                     11.585         2.141      2.451 
 Issued and fully paid:                    230.510       218.615    218.925 
------------------------------------  ------------  ------------  --------- 
 
   6.      Status of half yearly financial statements 

The condensed set of half yearly financial statements for the six months ended 31 December 2014 is unaudited and does not constitute statutory accounts as defined by The Companies Act 2006. The comparative figures for the period to 31 December 2013 are also unaudited. The comparative figures for the year to 30 June 2014 are extracted from the statutory accounts to that date. A copy of those statutory accounts has been filed with the Registrar of Companies.

   7.      Further Copies 

Copies of the half-yearly financial report are available from the Company's registered office at 9-13 St. Andrew Street, London EC4A3AF and on the Company's website www.artilium.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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