RNS Number : 6032E
IS Solutions PLC
30 September 2008
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Tuesday, 30 September 2008
Embargoed: 7.00am
IS Solutions plc
("the Group")
Interim Results for the six months ended 30 June 2008
* Turnover £3.64 million (2007: £3.88 million)
* Pre-tax profit £189,000 (2007: £181,000) +4.4%
* Operating profit £143,000 (2007: £133,000) +7.5%
* Earnings per share 0.71p (2007: 0.71p)
* Interim dividend 0.33p (2007: 0.33p)
* Gross margin 37.2% (2007: 35.6%) +4.5%
* Cash, cash equivalents and investment instruments at the half year stood at £2.11 million (2007: £2.17 million)
* Acquisition of Chapter26 in July 2008, integrating well
"Despite the continued uncertainty in the financial markets and its potential impact on the overall economy, the Group has continued to
see a robust demand for its services from our long standing clients, resulting in an increase in our recurring revenue streams. Although
this demand has been offset to some extent by lower product sales, the Board believes the forecasts for the full year should be
achievable."
Barrie Clark, Chairman
FULL STATEMENT ATTACHED
Enquiries:
John Lythall, Managing Director Keith Gabriel
IS Solutions Plc Citigate Dewe Rogerson Ltd
Tel: 01932 893333 Tel: 0121 455 8370
www.issolutions.co.uk
(AIM: ISL)
Sandy Fraser/Neil McDonald
Brewin Dolphin Limited
Tel: 0845 213 4217
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IS Solutions plc
Interim Results for the six months ended 30 June 2008
Statement by the Chairman, Barrie Clark
Against a background of continuing economic uncertainty, the Board is pleased to announce that the interim results for the six months
ended 30 June 2008 are in line with expectations.
Pre-tax profits for the period increased by 4.4% to £189,000 (2007: £181,000) and earnings per share were unchanged at 0.71p (2007:
0.71p) due to a higher tax charge. Turnover dropped by 6.2% to £3.64 million (2007: £3.88 million restated) though gross margins improved by
1.6 percentage points (up from 35.6% to 37.2%) reflecting a shift in business towards the more profitable projects and support areas of the
Group. Cashflow from operations has again been positive and cash, cash equivalents and investment instruments at the half year stood at
£2.11 million (31 December 2007: £2.50 million, 30 June 2007: £2.17 million), the reduction in cash has resulted from the increased dividend
payment and the purchase of Treasury shares.
The first half of the year has seen a continuing improvement in operating profit to £143,000 (2007: £133,000), an increase of 7.5%. This
has been driven by an increase in our projects and recurring revenue streams of 7.6%.
Product sales are down on last year reflecting the tightening economic situation but this is being offset by the above mentioned
projects growth.
In July 2008 we completed the acquisition of Chapter26 Ltd, a company specialising in Enterprise Content Management built around EMC
Documentum software. This, coupled with our existing Departmental Content Management practice, will allow us to offer clients a complete
service in this arena.
Dividend
Last year the Board reviewed the dividend policy of the Group in the light of its historic cash balances, continuing track record of
strong cash generation from operations and improving markets and prospects. Although the general market conditions have deteriorated
considerably the Board believes that the Group's strong balance sheet, coupled with the first half results being in line with its
expectations, is sufficient to allow it to hold the interim dividend at last year's level of 0.33p (2007 half year: 0.33p) per ordinary
share. The interim dividend will be paid on 7 November 2008 to shareholders on the register at the close of business on 10 October 2008.
Outlook
Despite the continued uncertainty in the financial markets and its potential impact on the overall economy, the Group has continued to
see a robust demand for its services from our long standing clients, resulting in an increase in our recurring revenue streams. Although
this demand has been offset to some extent by lower product sales, the Board believes the forecasts for the full year should be achievable.
Barrie Clark, Chairman
30 September 2008
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IS Solutions plc
Consolidated income statement for the six months ended 30th June 2008
6 months ended Year ended
30th June 31st December
2008 2007 2007
Restated
£'000 £'000 £'000
Continuing operations
Revenue 3,644 3,884 7,894
Cost of sales (2,259) (2,501) (5,078)
Gross profit 1,385 1,383 2,816
Distribution costs (812) (743) (1,670)
Administration (430) (507) (844)
expenses
Profit from operations 143 133 302
Investment income 46 48 108
Profit before tax 189 181 410
Tax (24) (8) 50
Profit attributable to equity holders of the 165 173 460
parent
Earnings per share
Basic 0.71 p 0.71 p 1.89 p
Diluted 0.70 p 0.70 p 1.86 p
Consolidated statement of changes in shareholders' equity for the period
6 months ended Year ended
30th June 31st December
2008 2007 2007
£'000 £'000 £'000
Total recognised income and expense for the 165 173 460
period
Purchase of own (331) - (70)
shares
Sale of own shares 16 2 21
Share-based payments 7 - 2
Dividends paid (160) (80) (161)
Change in shareholders' equity for the period (303) 95 252
Shareholders equity 3,071 2,819 2,819
at start of period
Shareholders' equity at end of period 2,768 2,914 3,071
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IS Solutions plc
Consolidated balance sheet as at 30th June 2008
At 30th June At 31st December
2008 2007 2007
£'000 £'000 £'000
Non-current assets
Goodwill 254 254 254
Other intangible assets - 22 7
Property, plant and equipment 144 176 127
Deferred tax assets 61 11 86
459 463 474
Current assets
Trading investments carried at fair 250 - -
value
Trade and other receivables 1,244 1,584 1,224
Cash and cash equivalents 1,860 2,171 2,504
3,354 3,755 3,728
Total assets 3,813 4,218 4,202
Current liabilities
Trade and other payables (1,025) (1,300) (1,110)
Tax liabilities (20) - (20)
(1,045) (1,300) (1,130)
Non-current liabilities
Deferred tax liabilities - (4) (1)
Total liabilities (1,045) (1,304) (1,131)
Net assets 2,768 2,914 3,071
Equity
Share capital 496 496 496
Share premium account 1,786 1,786 1,786
Own shares (368) (64) (97)
Retained earnings 854 696 886
Total equity 2,768 2,914 3,071
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IS Solutions plc
Consolidated cash flow statement for the six months ended 30th June 2008
6 months ended Year ended
30th June 31st December
2008 2007 2007
£'000 £'000 £'000
Operating activities
Profit from 143 133 302
operations
Adjustments for:
Depreciation of 52 55 114
property, plant and
equipment
Gain on disposal of (2) (2) (2)
property, plant and
equipment
Amortisation of 7 15 30
intangible assets
Share-based payments 7 - 2
Operating cash flows before movements in working capital 207 201 446
(Increase)/decrease (20) 170 530
in debtors
(Decrease)/increase (85) 311 121
in creditors
Cash generated by operations 102 682 1,097
Net cash from operating activities 102 682 1,097
Investing activities
Interest received 46 48 108
Purchase of trading (250) - -
investments
Purchase of (74) (50) (60)
property, plant and
equipment
Proceeds on disposal 7 6 6
of property, plant
and equipment
Net cash (used in)/from investing activities (271) 4 54
Financing activities
Dividends paid (160) (80) (161)
(Purchase)/sale of own shares (315) 2 (49)
Net cash used in financing activities (475) (78) (210)
Net (decrease)/increase in cash and cash equivalents (644) 608 941
Cash and cash equivalents at start of 2,504 1,563 1,563
year
Cash and cash equivalents at end of period 1,860 2,171 2,504
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IS Solutions plc
Notes to the interim financial statements
1. Basis of preparation
The interim financial information for the six months ended 30th June 2008 and 30th June 2007 does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985 and has not been audited by the Group's auditors. The financial information for
the year ended 31st December 2007 has been extracted from the statutory accounts for that year which have been filed with the Registrar of
Companies and which contain an unqualified audit report and did not contain a statement under s237(2) or (3) of the Companies Act 1985.
The interim financial information has been prepared on the basis of the accounting policies and presentation required by International
Financial Reporting Standards, incorporating International Accounting Standards (IAS's) and Interpretations (collectively IFRS), and on a
consistent basis with the latest published annual accounts. The comparative amounts for revenue, cost of sales and distribution costs to
June 2007 have been restated to comply with the change in accounting policies adopted in those annual accounts, as has the segmental
analysis.
2. Business and geographical segments
The Group reports its revenue and gross profit by direct sales (to its own customers) and distribution sales (vendor generated third
party sales). Analysis of other income and operating costs to these segments would be entirely arbitrary and is not provided.
Business segments 2008 Direct Distribution Unallocated Total
Revenue 3,198 446 - 3,644
Gross profit 1,357 28 - 1,385
Other income and expense - - (1,220) (1,220)
Segment result 1,357 28 (1,220) 165
Assets 1,148 - 2,665 3,813
Liabilities (708) - (337) (1,045)
Business segments 2007 Direct Distribution Unallocated Total
Revenue 3,284 600 - 3,884
Gross profit 1,323 60 - 1,383
Other income and expense - - (1,210) (1,210)
Segment result 1,323 60 (1,210) 173
Assets 980 - 3,238 4,218
Liabilities (740) - (564) (1,304)
Geographical segments
The group operates entirely within the UK.
continued*
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3. Earnings per ordinary share
6 months ended Year ended
30/06/2008 30/06/2007 31/12/2007
Earnings attributable to equity holders £165,000 £173,000 £460,000
of the parent
Weighted average of ordinary shares in 24,793,190 24,793,190 24,793,190
issue
Weighted average of own shares (1,403,998) (565,618) (482,285)
Weighted average for calculating basic 23,389,192 24,227,572 24,310,905
EPS
Effective dilutive share options 201,000 419,870 361,977
Weighted average for calculating diluted 23,590,192 24,647,442 24,672,882
EPS
4. Dividends
During the period a dividend of £160,000 (0.67p per share) was paid in relation to the year ended 31st December 2007 (2007: £80,000
(0.33p per share) in relation to the year ended 31st December 2006).
An interim dividend of 0.33p per share (2007: 0.33p) is proposed, and will be paid on 7th November 2008 to shareholders on the register
at the close of business on 10th October 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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