RNS Number:6743K
Charteris PLC
06 April 2005
Charteris plc Interim Results
Charteris plc, the business and IT consultancy, announces its interim results
for the six months to 31st January 2005.
HIGHLIGHTS
* Total revenue grew by 50% to #8.9m (1H04 #5.9m)
* Revenue from continuing operations grew by 41% to #8.3m.
* Strong repeat business supplemented by significant new clients
* Revenue well balanced across the three practices
* Profit before taxation was #438k (1H04: #34k)
* Profit before tax and the amortisation of goodwill was #560k (1H04:
#122k)
* Cash generated by operating activities grew to #604k (1H04: #425k)
* Integration of Cedalion Ltd completed according to plan to give a fourth
practice
Commenting on the results, David Mann, Chairman, said:
"Charteris has made a good start to the year. Overall growth rates in our
industry remain modest, but there are significant opportunities in specialised
areas and we are well placed to benefit from these. The directors believe that
Charteris should be able to continue making good progress in the second half."
Press enquiries:
David Pickering/Marsali Harwood, Charteris plc Tel: 020 7600 9199
Zoe Biddick, Biddicks Tel: 020 7448 1000
CHAIRMAN'S STATEMENT
RESULTS
Charteris continued to make good progress in the six months ended 31 January
2005 (1H05). Total revenue in the period grew by 50% to #8.9 million, compared
with #5.9 million in the six months ended 31 January 2004 (1H04). Revenue from
continuing operations grew by 41% to #8.3 million. The additional revenue of
#0.6 million was contributed by Cedalion, the Edinburgh based technical
consultancy, which was acquired on 29 October 2004.
Profit before taxation was #438,000 (compared with #34,000 in 1H04, when the
company was recovering from the earlier market downturn). Profit before tax and
the amortisation of goodwill was #560,000 (compared with #122,000 in 1H04) and
on this basis operating margin was 6%. This is consistent with the emphasis
placed by the directors this year on continuing investment in business
development, e.g. by additional key recruitment and appointments.
Gross cash balances at 31 January 2005 were #1.8 million (compared with #4.2
million at 31 July 2004). The net cash outflow related to the acquisition of
Cedalion was #2.7 million. Cash generated by operating activities was #604,000
(compared with #425,000 in 1H04).
With the acquisition of Cedalion, the number of people employed by the company
increased to 135 (compared with 99 at 31 July 2004). In addition the company
continues to use associates on client assignments.
BUSINESS OVERVIEW
The benefits of the actions taken to broaden the base of the company in recent
years continue to show through in the results. Revenue from the continuing
operations in the period was again well balanced across the three practices:
Retail, Manufacturing & Services 31%; Financial Services and Media 34%; and
Government, Legal, Utilities and Energy 35%.
Revenue from the Government, Legal, Utilities and Energy sectors increased by
86% (compared to 1H04) as a result of project work in key accounts such as the
Cabinet Office and good demand for services offering commercial advice to help
clients manage complex, IT-related contracts.
Revenue from Financial Services and Media increased by 43% with market
conditions improving in the Financial Services sector and the winning of new
clients such as Macquarie European Infrastructure Fund and ITV.
Revenue from Retail, Manufacturing & Services grew by 10% with the lower growth
rate in this sector reflecting the conclusion of the ERP project for KCI but a
continuing strong relationship with Microsoft on several key projects.
The acquisition of Cedalion has effectively now added a fourth practice to the
structure (with remits defined on a geographic basis and also according to
business delivered for the Group from centres of excellence within that
practice).
BUSINESS HIGHLIGHTS - CONTINUING OPERATIONS
As usual, much of our revenue has come from the further development of strong
relationships with long-standing clients; 75% of revenue in 1H05 came from
organisations who were also clients in the previous financial year. This is a
clear endorsement of the quality of our work. We were also successful in
supplementing this with revenue from new clients and I am delighted to be able
to take this opportunity to announce some exciting new assignments.
We can now say that a team of Charteris consultants is providing independent
commercial and technical advice to the senior management of the National
Programme for Information Technology (NPfIT) in the National Health Service.
Charteris has been engaged since October 2004 and has advised on a variety of
business and technical issues affecting the Programme.
We have been selected by ITV Broadcast as their Microsoft Technology partner. We
will be using our project development methodology and technology expertise to
help ITV implement new business systems based on Microsoft's technologies.
We have signed a contract with the London Borough of Harrow worth #600K over 18
months to supply a social care information management system based upon
Corelogic's Framework-i product. Working with the Council, Charteris will
project manage the implementation.
A team of Charteris consultants has been helping Macquarie European
Infrastructure Fund to implement new back office systems and processes to manage
the Wales and West Gas Distribution Network upon transfer from Transco. This
team has now expanded to provide support in establishing the front office
systems.
INTEGRATION OF CEDALION
The integration of Cedalion completed according to plan and the business was
hived up into Charteris on 1 February 2005. We have already seen synergistic
benefits; Cedalion's project methodologies have helped generate opportunities
and new sales in England, and Cedalion has begun to achieve business consulting
revenues in Scotland.
Cedalion has a leading position in the application of Microsoft infrastructure
platforms to meet strategic business needs. Performance in this area has been
good and there has been strong interest from clients in taking the offering to
market south of the border.
Cedalion also has a risk and compliance proposition to help clients in the
Financial Services sector address increasing regulatory demands. We are building
a proposition that combines the strengths of Charteris business consultancy and
Cedalion technology skills. Whilst there have been some delays in client
decisions to proceed, the pipeline of prospects remains healthy.
OUTLOOK
Charteris has made a good start to the year. Overall growth rates in our
industry remain modest, but there are significant opportunities in specialised
areas and we are well placed to benefit from these. They include both consulting
and technology services in: business intelligence, information and knowledge
management, enterprise integration and service management.
As long as current market conditions obtain, the directors believe that
Charteris should be able to continue making good progress in the second half.
The strength of underlying trading should support continuing investment in
business development at current margins. The objective is to position the
business to deliver further earnings growth in the next financial year.
Consolidated profit
and loss account -------- -------- -------- -------- --------
-------------------
Acquisitions 6 Continuing Total Total Total
mths ended operations 6 6 mths ended 31 6 mths ended 31 12 mths ended
31 Jan 2005 mths ended 31 Jan 2005 Jan 2004 31 Jul 2004
Jan 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
#000 #000 #000 #000 #000
------------------- -------- -------- -------- -------- --------
Turnover 577 8,289 8,866 5,893 13,822
------------------- -------- -------- -------- -------- --------
Other external
charges 27 1,389 1,416 1,005 2,790
Staff costs 433 5,632 6,065 4,163 9,085
Depreciation 12 67 79 57 120
Goodwill
amortisation - 122 122 88 176
Administrative
expenses 121 652 773 571 1,169
------------------- -------- -------- -------- -------- -------
593 7,862 8,455 5,884 13,340
------------------- -------- -------- -------- -------- -------
------------------- -------- -------- -------- -------- -------
Operating (loss)/profit
before goodwill
amortisation (16) 549 533 97 658
Goodwill
amortisation - (122) (122) (88) (176)
------------------- -------- -------- -------- -------- -------
Operating (loss)/profit (16) 427 411 9 482
======== ========
Interest receivable 61 59 123
Interest payable and
similar charges (34) (34) (64)
------------------- -------- -------- -------- -------- -------
Profit on ordinary
activities before
taxation and goodwill
amortisation 560 122 717
Goodwill amortisation (122) (88) (176)
------------------- -------- -------- -------- -------- -------
Profit on ordinary
activities before taxation 438 34 541
Taxation (182) (33) (220)
Profit on ordinary
activities after taxation
and for the financial
period 256 1 321
Dividends proposed - - (158)
Retained profit for the
period 256 1 163
Earnings per share
Basic 0.64p 0.00p 0.81p
Diluted 0.63p 0.00p 0.81p
Basic before goodwill
amortisation 0.94p 0.23p 1.26p
Diluted before goodwill
amortisation 0.93p 0.22p 1.25p
No separate Statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the Profit and Loss Account.
Consolidated balance sheet
31 Jan 2005 31 Jan 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Fixed assets
Intangible assets 5,586 3,042 2,954
Tangible assets 2,613 2,554 2,557
Investments 1 1 1
--------- -------- ---------
8,200 5,597 5,512
Current assets
Debtors 3,429 1,876 2,950
Cash at bank and in hand 1,805 3,494 4,155
--------- -------- ---------
5,234 5,370 7,105
Creditors :
amounts falling due
within one year (4,347) (2,452) (4,020)
--------- -------- ---------
Net current a 887 2,918 3,085
Total assets less current
liabilities 9,087 8,515 8,597
Creditors :
amounts falling due
after more than one year (861) (1,020) (947)
Provisions for
liabilities and charges (38) (32) (25)
--------- -------- ---------
Net assets 8,188 7,463 7,625
========= ======== =========
Capital and reserves
Called up share capital 430 419 419
Share premium account 2,544 2,544 2,544
Merger reserve 3,573 3,284 3,284
Other reserves 22 19 19
ESOP reserve (197) (201) (201)
Profit and loss account 1,816 1,398 1,560
--------- -------- ---------
Equity
shareholders' funds 8,188 7,463 7,625
========= ======== =========
Consolidated cash flow
6 mths ended 31 6 mths ended 31 12 mths ended
Jan 2005 Jan 2004 31 Jul 2004
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Net cash flow
from operating activities 604 425 1,201
Returns on investment and
servicing of finance
Interest paid (34) (34) (63)
Interest received 61 59 123
-------- -------- -------
Net cash inflow from
returns on investment and
servicing of finance 27 25 60
Taxation - 144 142
Capital expenditure
Purchase of
tangible fixed assets (42) (27) (94)
Acquisition
Purchase of subsidiary
undertaking (2,814) - -
Cash acquired
with subsidiary undertaking 101 - -
-------- -------- -------
(2,713) - -
Equity
dividends paid (158) (158) (158)
-------- -------- -------
Cash (outflow)/inflow before use
of liquid resources and financing (2,282) 409 1,151
Management of liquid resources
Decrease/(increase) in term
bank deposit 2,485 (29) (474)
Financing
Proceeds of share option
exercise 7 - -
Purchase of own shares - (149) (149)
Repayment of mortgage loan (75) (75) (156)
-------- -------- -------
Net cash outflow from
financing (68) (224) (305)
-------- -------- -------
Increase in cash in period 135 156 372
======== ======== =======
Reconciliation of net cash flow
to movement in net funds
Increase in cash in period 135 156 372
Cash outflow from change in
mortgage debt 75 75 156
Cash (inflow)/outflow from change
in liquid resources (2,485) 29 474
-------- -------- -------
Change in net funds
resulting from cash flows (2,275) 260 1,002
Amortisation of loan
arrangement fees - - (1)
-------- -------- -------
Movement in net funds in
period (2,275) 260 1,001
Opening net funds 3,059 2,058 2,058
-------- -------- -------
Closing net funds 784 2,318 3,059
======== ======== =======
Notes
1. ACCOUNTING POLICIES
The financial information contained in this interim report does not constitute
statutory accounts. The interim results, which have not been audited, have been
prepared using accounting policies consistent with those used in the preparation
of the Annual Report and Accounts for the Year ended 31 July 2004. Those
accounts have been filed with the Registrar of Companies and received an
unqualified audit report which did not contain a statement under section 237 (2)
or (3) of the Companies Act 1985.
2. TAXATION
Taxation for the 6 months to 31 January 2005 is based on the effective rate of
taxation which is estimated to apply to the year ending 31 July 2005.
3. SHARE CAPITAL
On 29 October 2004, the company issued 1,140,684 1p ordinary shares at 26.3p
each to the vendors of the entire issued share capital of Cedalion Limited.
4. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES
6 mths ended 31 6 mths ended 31 12 mths ended
Jan 2005 Jan 2004 31 Jul 2004
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Operating profit 411 9 482
Depreciation and
amortisation charges 201 145 296
Decrease in provisions (10) - -
Decrease/(increase) in
debtors 199 (294) (1,323)
(Decrease)/increase in
creditors (197) 565 1,746
--------------------- ---------- --------- ---------
Net cash flow
from operating activities 604 425 1,201
--------------------- ---------- --------- ---------
5. RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
6 mths ended 31 6 mths ended 31 12 mths ended
Jan 2005 Jan 2004 31 Jul 2004
(Unaudited) (Unaudited) (Audited)
#000 #000 #000
Opening equity
shareholders'funds 7,625 7,462 7,462
Retained profit for the
period 256 1 163
New sharecapital issued 300 - -
Exercise of share options
to acquire shares held by
ESOP 7 - -
------------------------ --------- --------- ---------
Closing equity
shareholders'funds 8,188 7,463 7,625
------------------------ --------- --------- ---------
6. EARNINGS PER SHARE
Basic earnings per share have been calculated by dividing the profit on ordinary
activities after taxation in the period by 40,076,275 shares (31 January 2004:
39,479,933 shares) being the weighted average number of shares in issue after
excluding those shares owned by the employee benefit trust. The diluted earnings
per share calculation has been based on a fair value of 31.3p per share (31
January 2004: 24.0p per share). The weighted average number of dilutive shares
is 40,476,353 (31 January 2004: 39,693,413).
7. PURCHASE OF SUBSIDIARY UNDERTAKING
On 29 October 2004, the group acquired the entire issued share capital of
Cedalion Limited.
#000
Net assets acquired:
Tangible fixed assets 94
Debtors 678
Cash at bank and in hand 101
Creditors (490)
Provisions for liabilities and charges (23)
---------
360
Goodwill 2,754
---------
3,114
---------
Discharged by:
Shares allotted 300
Cash paid 2,814
---------
3,114
---------
The results of Cedalion Limited for the period from 1 November 2004 to 31
January 2005 are incorporated into the consolidated profit and loss account and
are disclosed as acquisitions. The goodwill arising on acquisition is being
written off over its estimated useful economic life of 20 years.
8. INTERIM FINANCIAL STATEMENTS
The interim financial statements were approved by the directors on 5 April 2005.
The Interim Report will be sent to shareholders by the end of April and will be
available free of charge from the Company's registered office from the day of
despatch.
9. FULL YEAR FINANCIAL STATEMENTS
We expect to announce our full year results in October 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UUUCUCUPAPGA
Charteris (LSE:CAE)
Historical Stock Chart
From Feb 2024 to Mar 2024
Charteris (LSE:CAE)
Historical Stock Chart
From Mar 2023 to Mar 2024