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
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