Final Results
August 05 2003 - 3:01AM
UK Regulatory
RNS Number:3182O
Eurolink Managed Services PLC
05 August 2003
Release: 5 August 2003
Embargoed: 7.00am
EUROLINK MANAGED SERVICES PLC
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2003
Introduction and Results
I am happy to report an increase in profit before tax of 32% to #204,000 (2002:
#155,000) on turnover similar to last year at #9.15 million (2002: #9.23
million). Earnings per share were 1.22p (2002: 0.47p). As in previous years a
dividend is not being recommended as the directors are seeking to develop the
Group through organic growth and acquisitions and accordingly are retaining
resources for this purpose.
Business Review
With the IT sector in the UK continuing to be a very difficult market we are
encouraged to be able to report a level of business similar to last year. We
believe this reflects the quality of our relationships with our major clients
and the robustness of our business model, which has proven to be effective in
these testing market conditions.
Our strategy has been to focus on maintaining and improving, where possible, the
quality of our software development solutions to our existing key clients. Using
our core set of processes and skills and ability to build teams of people around
the core team, we are able to enhance our competitiveness. This business model
means we can focus on people skills and it enables us to remain software
platform independent. Throughout the year there has been and continues to be a
demand for presentations and proposals from existing and new clients, although
often final decisions are continuing to be deferred. This is frustrating for all
concerned but it does demonstrate an increasing awareness amongst potential
clients of our presence.
Through the control of costs there has been an improvement in gross margin in
the second half of the year, when compared to the first half. The supporting
infrastructure of the Group is of course continually under review. Our current
available capacity does allow for significant expansion and we have increased
our sales activity to pick up the slack in capacity.
In respect of the balance sheet the Group has now increased net asset value to
just over #1 million. This compares with a net asset value of #235,000 as at 31
March 1999 shortly before the company obtained its listing on AIM.
Outlook
Maintaining the strengths of the business for the future and keeping short-term
profitability is the balance the directors seek to achieve in the current
conditions. In addition, the directors now believe the market place for
acquisitions has settled at more realistic valuation levels and will continue to
search for attractive, sensibly priced acquisitions that can enhance the total
return to shareholders.
The outlook on business levels from existing clients remains positive and
encouraging for the year ahead and provides a sound basis for the Group going
forwards. With the timing of the more substantial known project work anticipated
to benefit the second half of the year the directors do not expect the first
half of this year to see an improvement over last year's first half.
There are few signs of any improvement in market conditions and as a result the
current year is likely to prove challenging. With continuing opportunities to
present proposals to potential new clients, the higher level of sales activity
and new projects anticipated from existing clients the directors remain
cautiously optimistic.
Jim Carr
Chairman
4 August 2003
Consolidated profit and loss account for the year ended 31 March 2003
Note 2003 2002
#'000 #'000
Turnover 9,152 9,226
Cost of sales (7,106) (7,293)
--------- ---------
Gross profit 2,046 1,933
Administrative expenses (1,792) (1,734)
--------- ---------
Operating profit 254 199
Net interest payable (50) (44)
--------- ---------
Profit on ordinary activities
before taxation 204 155
--------- ---------
Tax (77) (106)
--------- ---------
Profit for the financial year 127 49
--------- ---------
Earnings per share
Basic 2 1.22p 0.47p
Diluted 2 1.22p 0.47p
--------- ---------
Consolidated balance sheet at 31 March 2003
2003 2002
#'000 #'000
Fixed assets
Tangible assets 256 297
Current assets
Debtors 2,368 1,930
Cash at bank 3 418
--------- ---------
2,371 2,348
--------- ---------
Creditors: amounts falling due
within one year (1,585) (1,713)
--------- ---------
Net current assets 786 635
--------- ---------
Total assets less current liabilities 1,042 932
--------- ---------
Creditors: amounts falling due after more than one
year (26) (43)
--------- ---------
1,016 889
--------- ---------
Capital and reserves
Called up share capital 208 208
Share premium account 103 103
Profit and loss account 705 578
--------- ---------
Equity shareholders' funds 1,016 889
--------- ---------
Consolidated cash flow statement for the year ended 31 March 2003
2003 2002
#'000 #'000
Net cash inflow/(outflow) from operating activities (213) (98)
Returns on investments and servicing of finance
Net interest paid (50) (44)
Taxation
UK corporation tax (60) (143)
Capital expenditure and financial investment
Purchase of tangible fixed assets (23) (24)
Sale of tangible fixed assets - 33
--------- ---------
Cash (outflow) before financing (346) (276)
--------- ---------
Financing
Capital element of finance lease contracts
- Repayments (43) (108)
Amounts advanced against trade debtors (362) 591
--------- ---------
Cash (outflow)/inflow from financing (405) 483
--------- ---------
(Decrease)/increase in cash in the year (751) 207
--------- ---------
Reconciliation of operating profit to net cash inflow/(outflow) from operating
activities
2003 2002
#'000 #'000
Operating profit 254 199
Depreciation 64 67
Loss on sale of tangible assets - 9
Increase in debtors (438) (538)
(Decrease)/increase in creditors (93) 165
--------- ---------
Net cash inflow/(outflow) from operating activities (213) (98)
--------- ---------
Reconciliation of net cash inflow to movement in net debt
2003 2002
#'000 #'000
(Decrease)/increase in cash at bank (751) 207
Cash outflow/(inflow) from changes in debt
405 (483)
--------- ---------
Movement in net funds (346) (276)
Net (debt)/funds at start of year (229) 47
--------- ---------
Net debt at end of year (575) (229)
--------- ---------
Notes to the Preliminary Announcement
1. Preparation of preliminary announcement
The preliminary results have been extracted from the company's audited accounts
which have been approved and signed by the directors and auditors. They have not
yet been delivered to the Registrar of Companies. The financial information set
out in this preliminary announcement does not comprise Statutory Accounts within
the meaning of section 254 of the Companies Act 1985.
2. Earnings per share
The calculation of earnings per share is based on the profit on ordinary
activities after tax for each period and the weighted average number of shares
in issue during the period, being 10,400,000 (2002: 10,400,000).
The diluted earnings per share is based on the profit after tax for each period
and the fully diluted weighted average number of shares in issue during the
period being 10,400,000 (2002: 10,400,000).
3. Copies of report
The Annual Report will be posted to all shareholders and will be available on
request from the Company Secretary, Queen Square House, 15 Queen Square,
Brighton, East Sussex, BN1 3FD.
4. Copy of this announcement
A copy of this announcement will be available for one month from the Company
Secretary, Queen Square House, 15 Queen Square, Brighton, East Sussex, BN1 3FD.
4 August 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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