Interim Results
December 08 2003 - 7:53AM
UK Regulatory
RNS Number:9870S
Eurolink Managed Services PLC
08 December 2003
For immediate Release
8th December, 2003
Eurolink Managed Services ("Eurolink" or "the Company")
Interim Results for the six months ended
30th September 2003
Chairman's Statement
Introduction and results
I am pleased to report the results for the six months ended 30th September,
2003. Turnover for the period was #3.83 million (2002: #4.51 million) resulting
in a loss before tax of #96,000 (2002: profit #17,000), before the
reorganisation costs of #69,000 referred to below. Loss per share for the period
was 1.13p (2002: earnings per share 0.03p). Your Board is not proposing the
payment of an interim dividend.
The half year has seen a reorganisation of your company's Board of Directors
which resulted in Keith Chapman and myself joining the Board on 11th September,
2003 and Jim Carr retiring at that time. There have been legal and severance
costs incurred by the Group during these changes and these are disclosed as an
exceptional item.
Business review
Trading conditions in the IT market place remain uncertain. The Group has not
been immune to this and has experienced a reduction in turnover which in turn
has produced a poorer trading performance compared to the same period last year.
With all opportunities, both from existing and prospective clients being subject
to significant competition resulting in keener margins, your Group has
concentrated on maintaining good business relationships and its reputation for
delivering projects to a high quality, on time and budget.
A great deal of effort, with associated cost, has been incurred in following up
new prospects but the time required to convert prospects into orders continues
to be extended, particularly in the financial services sector where a
significant proportion of our revenues have traditionally been derived and the
public sector where new business has been achieved.
At the same time a review of our main supplier arrangements is in progress with
a view to reducing our direct costs of supply, although it is not expected that
any resultant benefits will be reflected in this financial year.
Whilst always seeking to balance the need to have a responsive and available
professional team with a minimal level of costs, the directors have been able to
redefine roles and responsibilities of the management team, as a result of
which, further annualised cost savings in the order of #250,000 will be realised
next year.
Outlook
Your new Board is committed to growing the Group both organically and through
acquisition. To this end several interesting companies have been identified and
your Directors will be investigating these and other opportunities. The outlook
for business from existing clients continues to be positive with the usual
fluctuations in overall business levels arising from the nature of project work.
We are currently experiencing a high level of activity and interest largely as a
result of our increased sales effort. Nevertheless the timing of the
commencement of new business remains difficult to predict. Consequently, your
Directors are confident that the business is well placed to take advantage of
improving market conditions. The present infrastructure should enable a
considerable level of growth without corresponding cost increases, but at
present your Directors remain cautious for the current year.
I should like to thank my Board colleagues, all staff and our advisors for their
support and understanding during these changing times.
George Kynoch
Chairman
8th December 2003
Group profit and loss account for the six months ended 30th September 2003
Audited twelve
months to 31st
March
Unaudited six months to 30th September
2003 2002 2003
#'000 #'000 #'000
Turnover 3,827 4,512 9,152
Cost of sales (3,013) (3,610) (7,106)
--------- --------- ---------
Gross Profit 814 902 2,046
Operating expenses
Administrative (891) (869) (1,792)
Exceptional (note 2) (69) - -
--------- --------- ---------
Operating (loss)/ (146) 33 254
profit
Net interest payable (19) (16) (50)
--------- --------- ---------
(Loss)/profit on (165) 17 204
ordinary activities
before taxation
Taxation on profit from 47 (14) (77)
ordinary activities --------- --------- ---------
(Loss)/profit for the (118) 3 127
financial period ========= ========= =========
(Loss)/earnings per
share (note 3)
Basic (1.13)p 0.03p 1.22p
========= ========= =========
Diluted (1.13)p 0.03p 1.22p
========= ========= =========
All disclosures relate only to continuing operations.
There are no recognised gains or losses other than the profit for the period.
Group balance sheet at 30th September 2003
Unaudited Audited
30th September 31st March
2003 2002 2003
#'000 #'000 #'000
Fixed assets
Tangible assets 233 276 256
Current assets
Debtors 1,851 1,685 2,368
Cash at bank and in hand 3 375 3
-------- --------- ---------
1,854 2,060 2,371
-------- --------- ---------
Creditors: amounts falling due within one (1,170) (1,416) (1,585)
year -------- --------- ---------
Net current assets 684 644 786
-------- --------- ---------
Total assets less current liabilities 917 920 1,042
Provisions for liabilities and charges
Deferred tax (19) (28) (26)
-------- --------- ---------
898 892 1,016
======== ========= =========
Capital and reserves
Called up share capital 208 208 208
Share premium account 103 103 103
Profit and loss account 587 581 705
-------- --------- ---------
Equity shareholders' funds 898 892 1,016
======== ========= =========
Group cash flow statement for the six months ended 30th September 2003
Audited twelve
months to
31st March
Unaudited six months to 30th September
2003 2002 2003
#'000 #'000 #'000
Net cash inflow/ 418 286 (213)
(outflow) from
operating activities
Returns on investments
and servicing of
finance
Interest paid (19) (16) (50)
Net capital expenditure (24) (11) (23)
and financial
investment
Taxation
UK corporation tax (63) (43) (60)
-------- -------- ----------
Net cash inflow/ 312 216 (346)
(outflow) before -------- -------- ----------
financing
Financing
Capital element of
finance leases and hire
purchase contracts
(12) (26) (43)
Amount advanced against 9 (233) (362)
trade debtors -------- -------- ----------
Net cash (outflow)/ (3) (259) (405)
inflow from financing -------- -------- ----------
Increase/(decrease) in 309 (43) (751)
cash in the period ======== ======== ==========
Reconciliation of
operating profit to net
cash flow from
operating activities
Operating (loss)/ (146) 33 254
profit
Depreciation charges 32 31 64
Loss on sale of 15 - -
tangible fixed assets
Decrease/(increase) in 553 245 (438)
debtors
(Decrease)/increase in (36) (23) (93)
creditors -------- -------- ----------
Net cash inflow/ 418 286 (213)
(outflow) from -------- -------- ----------
operating activities
Reconciliation of net
cash flow to movement
in net debt
Opening net (debt) (575) (229) (229)
Increase/(decrease) in 309 (43) (751)
cash in period
Cash outflow from 3 259 405
changes in debt -------- -------- ----------
Closing net debt (263) (13) (575)
-------- -------- ----------
Analysis of net debt
At 30th
September
At 1st April Cash flow
2003 2003
#'000 #'000 #'000
Cash at bank and in hand 3 - 3
Overdrafts (336) 309 (27)
-------- -------- ---------
(333) 309 (24)
Amounts advanced against trade (229) (9) (238)
debtors
Finance leases (13) 12 (1)
-------- -------- ---------
Total (575) 312 (263)
======== ======== =========
Notes to the interim results
1. Preparation of interim results
The financial information for the six month period ended 30th September 2003 is
unaudited and does not constitute statutory accounts within the meaning of the
Companies Act 1985.
The financial information for the period ended 31st March 2003 has been
extracted from the statutory accounts of Eurolink Managed Services plc which
contained an unqualified audit report and which did not contain a statement
under section 237(2) or 237(3) of the Companies Act 1985 and which have been
filed with the Registrar of Companies.
2. Exceptional expenses
The exceptional expenses consist of legal fees and severance costs relating to
the Group reorganisation.
3. Earnings per share
The calculation of basic (loss)/earnings per share is based on the (loss)/profit
on ordinary activities after taxation of (#118,000) (September 2002: #3,000:
March 2003: #127,000). The weighted average number of shares in issue during the
period and throughout the previous year was 10,400,000. There is no difference
between the basic and fully diluted (loss)/earnings per share.
4. Copies of report
The Interim Report will be sent to all shareholders shortly and will be
available on request from the Company Secretary, Queen Square House, 15 Queen
Square, Brighton, BN1 3FD.
Enquiries:
Eurolink Managed Services Plc
Keith Molineux/David Wood Tel: 01273 200100
John East & Partners Limited
Jeffrey Coburn/Simon Clements Tel: 020 7628 2200
This information is provided by RNS
The company news service from the London Stock Exchange
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