RNS Number:2289N
Planit Holdings PLC
07 July 2003
Chairman's and Chief Executive's Statement
As outlined in my Trading Update, announced in mid May, our results for the year
to end April 2003 are below expectation. The impact of the down turn in both
U.S. and European economies, a 35% reduction in worldwide demand for machine
tools, and the uncertainty created by the lead up to the Iraq war had a major
impact on Planit's worldwide sales. Planit's business however remains inherently
strong and despite what turned out to be the worst trading year ever in our
sector and making a small operating loss, it has remained profitable before
goodwill amortisation, restructuring and provision for onerous lease and, more
importantly continued to be cash generative..
In a relatively short space of time we have transformed our business from one
focused on selling interior design software, operating in a market estimated to
be valued at $60 million per year, to one that can compete aggressively in the
Computer Aided Design & Manufacturing Market where the spend on software is
estimated to be $1.2 billion per year. This repositioning of the Group though,
has not come without cost. However, it has placed us in a strong position to
become, both through organic growth and acquisition, a market leader in this
fragmented but very large expanding market.
As a result of the Group's transformation and our concerns over trading
conditions we decided to take the opportunity to carry out a major restructure
of our UK and US businesses. This involved merging overlapping sales functions
and consolidating back office operational activities to make significant cost
savings. In addition we reviewed our balance sheet and debtors and made prudent
provisions going forward
The key points in respect of the year's trading, together with prior year
comparatives, are as follows:
* Turnover #20,417,000 (2002 #22,347,000)
* Operating loss #432,000 (2002 - Profit #3,874,000)
* Operating profit before goodwill, restructuring and onerous lease
costs #1,931,000 (2002 #4,965,000)
* Basic loss per share (0.6p) (2002 - Earnings per share 2.7p)
* Basic adjusted earnings per share before goodwill, restructuring and
onerous lease costs 1.7p (2002 4.6p)
* Dividend 0.4p per 10p ordinary share (2002 0.4p)
* Cash flow from operating activities #3,288,000 (2002 #3,914,000)
Retail Design (Interior design software)
The retail design division, whilst affected by the slowdown in world economies,
mitigated the impact on sales with the launch during the year of two new
products, Planit Fusion and Autograph Version 6. This, together with the
implementation of a series of joint marketing initiatives with our overseas
subsidiaries and distributors, maintained sales levels in line with the previous
years.
Our key account client list continues to grow, a recent addition being Laura
Ashley who are working with us to implement our technologies to help increase
their in-store and online sales.
The consolidation in the U.S. of our design products and strategy of promoting a
single brand is already starting to show signs of success. Launched at the
National Kitchen and Bath Show the new Autograph Version 6 was well received and
is selling well. Autograph is a strong brand in the U.S. which has been
bolstered by the new product and is, we believe, already taking market share
from our main competitors.
Planit France is at last beginning to perform in line with expectation. The
appointment at the end of last year of a new President followed by a complete
restructure has already had a positive impact on sales and profits. Agreements
with major retailers together with improved sales to the independent sector have
resulted in the business trading profitably by the year end.
Our internet design solution Planit On Line continues to attract interest from
major retailers. The increased use of the internet as a medium for generating
enquiries and selling product is moving internet projects up their priority
list. However, experience has shown that the lead time from receiving the
initial enquiry to making a sale can be anything from 1 to 2 years. Those
retailers such as MFI, who have already embraced our technology, are enjoying
considerable success. We are in discussion with a number of retailers and expect
to announce shortly agreements with at least two well known high street names.
Design to Manufacture
This division has suffered the most as a result of the difficult trading
conditions. Sales are almost exclusively in the USA, the majority of which are
to the 70,000 independent custom cabinet makers spread throughout the country.
We have approximately 29,000 users of our design to manufacturer products and a
major part of our revenue is the selling into this installed base high value
licenses for increasing workshop automation. The economic uncertainty created by
the war and the downturn in consumer spending has meant that these relatively
small businesses have become reluctant to invest in expensive machinery and our
high end software to drive it.
We have taken a number of actions to remedy the situation, which include
rationalising sales territories and reducing the number of sales agents,
ensuring that our top producers receive the majority of the sales enquiries. We
have increased our tele-marketing activities to improve lead flow and set up a
small tele-sales team focused on selling upgrades and services into our
installed user
base.
The market is slowly improving and the action we have taken is beginning to show
signs of success. We will be launching a range of new products at the national
wood working show in August which we expect will stimulate the market and build
on the improvement in sales that we are starting to experience
CAM
The first full year's trading of Licom, the CAM company we acquired in the
previous year has been an unqualified success. This success has been achieved
against market trends where machine tools, the key driver of Licom sales are
down 35% on last year.
Increased investment in management and marketing together with the
implementation of an improved go to market model has resulted in a significant
increase in sales and profits over the previous year. The upgrading of key
products during the year has now given us access to larger sectors of the Cam
market. Licom is already a world leader in the supply of manufacturing software
to the wood working industry and we are now starting to make inroads into the
significantly larger engineering market.
Lignatec, the stair manufacturing software we acquired in January, has achieved
strong sales. We are currently developing the software so that we can sell it in
the USA. Market research shows that there appears to be very little competition
in the US and given the immediate success we have achieved in the UK we are
optimistic about this opportunity.
The acquisition of Radan Computational is also a very important part of our CAM
strategy. Radan is the market leader in Europe and the USA in providing
manufacturing software for the sheet metal industry. It dovetails perfectly with
Licom by increasing our brand awareness in the engineering sector and by
allowing both companies to offer users and prospects a one stop shop for all
their manufacturing software needs.
The addition of Radan's US operations provides us with the critical mass to
create an independent CAM division and to aggressively attack the engineering
markets. The appointment of a new President for this division supported by a
strong management team should enable us to enjoy strong divisional growth in the
current year.
Current Trading and Prospects
Although painful, the early actions taken in reorganising our operations are
already proving beneficial, with the restructuring and cost savings having
improved profit run rates across the Group.
Clearing our financial decks and making appropriate provisions has cost us one
year off our previous ongoing growth record. However, the effects of our actions
are beginning to show through and we now look forward to returning to the growth
pattern of previous years.
We remain highly cash generative and a market leader in most of the markets in
which we operate. We have a significant installed base in the UK, Europe and in
the USA and we will be seeking to exploit the growth opportunities now open to
the Group. Our target for the current year is to substantially increase sales
and profits.
Michael Jackson Trevor Semadeni
Chairman Chief Executive Officer
7 July 2003
PLANIT HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Audited
FOR THE YEAR ENDED 30 APRIL 2003 Year Ended Year Ended
30 April 03 30 April 02
#000 #000
(as restated)
Turnover
Acquisition-Lignatec 63 -
Continuing operations 20,354 22,347
20,417 22,347
Cost of sales (4,060) (4,323)
Gross profit 16,357 18,024
Administrative expenses(^) (16,789) (14,150)
Less: Goodwill amortisation 1,041 1,091
Restructuring costs 1,052 -
Onerous lease provision 270 -
Administrative expenses before goodwill amortisation, (14,426) (13,059)
restructuring costs and onerous lease provision
Operating profit before goodwill amortisation, 1,931 4,965
restructuring costs and onerous lease provision
Goodwill amortisation (1,041) (1,091)
Restructuring costs (1,052) -
Onerous lease provision (270) -
Operating (loss)/profit (432) 3,874
Acquisition-Lignatec 43 -
USA operations - continuing (615) 2,192
UK and European operations - continuing 140 1,682
Operating (loss)/profit (432) 3,874
Profit on sale of subsidiary undertaking 176 -
Interest receivable 200 256
Interest payable (515) (580)
(Loss)/profit on ordinary activities before taxation (571) 3,550
Taxation credit/(charge) 227 (1,223)
(Loss)/profit on ordinary activities after taxation (344) 2,327
Equity minority interest (162) (88)
(Loss)/profit for the financial year (506) 2,239
Proposed final dividend (354) (333)
(Loss)/profit retained for the year (860) 1,906
Basic and diluted (loss)/earnings per 10p ordinary share (0.6p) 2.7p
Adjusted earnings per 10p ordinary share - basic 1.7p 4.0p
Adjusted earnings per 10p ordinary share - diluted 1.6p 4.0p
There is no material difference between the result as disclosed in the profit and loss account and
the result on an unmodified historical cost basis.
The recognised gains and losses for the periods concerned are represented by the results shown
above, together with a net loss of
#1,278,000 (2002 #121,000) in respect of foreign currency retranslation of the net assets of
overseas subsidiaries.
(^) The 2002 comparative figures reported for administrative expenses have been restated to include
expenditure relating to internet
development, previously separately analysed, following completion of the investment project.
There is no net effect on operating profit.
PLANIT HOLDINGS PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2003
1. Nature of financial information
The preliminary financial information has been prepared on the basis of the accounting policies set out in the
Group's
2002 published accounts.
The financial information set out above, which is presently unaudited, does not constitute the Group's statutory
accounts for the year ended 30 April 2003 but is derived from those accounts. Statutory accounts for 2002 have
been filed with the Registrar of Companies, whereas those for 2003 will be delivered following the company's
Annual General Meeting. The Company's auditors, PricewaterhouseCoopers, have given an unqualified opinion
on the 2002 accounts in accordance with section 235 of the Companies Act 1985.
2. Segmental information
Unaudited Audited
By origin Half year ended Year Ended
30 April 03 30 April 02
#000 #000
Turnover
Acquisition Lignatec 63 -
USA operations - continuing 10,318 12,647
UK & European operations - continuing 10,036 9,700
20,417 22,347
Operating (loss)/profit
Acquisition-Lignatec 43 -
USA operations - continuing (615) 2,192
UK and European operations - continuing 140 1,682
(432) 3,874
3. Taxation
The taxation position comprises a current year corporation tax charge of #235,000 (2002 #1,415,000) and a prior year
corporation tax credit of #67,000 (2002 #221,000). Also included is a deferred tax credit of #395,000 (2002 charge
of #29,000).
4. (Loss)/earnings per share
Basic (loss)/earnings per 10p ordinary share have been calculated on the loss after taxation and minority interests
of #506,000 (2002 profit #2,239,000) and the weighted average number of ordinary shares in issue during the year of
83,473,933 (2002 82,690,389).
Basic adjusted earnings per 10p ordinary share is calculated on the adjusted profit after taxation and minority
interests of #1,387,000 (2002 #3,330,000) after having excluded goodwill amortisation of #1,041,000 (2002 #1,091,000),
restructuring costs of #1,052,000 (2002 Nil) and onerous lease provisions of #270,000 (2002 Nil) and the weighted
average number of ordinary shares in issue during the year. The adjustments for restructuring costs and onerous
lease provisions are made net of tax relief at 37% and 30% respectively totalling #470,000.
The diluted (loss)/earnings per share calculations are calculated based on the respective (loss)/earnings and
adjusted earnings stated above. The weighted average number of ordinary shares in issue during the year, together
with dilutive potential ordinary shares amounted to 84,410,784 (2002 84,006,949).
5. Proposed final dividend
The Board proposes that a final dividend of 0.40p per 10p ordinary share (2002 0.40p) be paid on 3 October 2003
in respect of the year ended 30 April 2003 to members on the share register at the close of business on
5 September 2003.
6. Report and Accounts
A copy of the Report and Accounts, containing the notice of the AGM, will be posted to shareholders in August and be
available from the Company's Registered Office at Inca House, Eureka Science & Business Park, Ashford, Kent, TN25
4AB.
PLANIT HOLDINGS PLC
---------------------
CONSOLIDATED BALANCE SHEET
----------------------------
AS AT 30 APRIL 2003
---------------------
Unaudited Audited
30 April 03 30 April 02
#000 #000
Fixed assets
Intangible assets 20,368 18,287
Tangible assets 1,486 1,352
-------- -------
21,854 19,639
-------- -------
Current assets
Stocks 176 323
Debtors 6,215 5,947
Cash at bank and in hand 4,235 8,652
-------- -------
10,626 14,922
Creditors- amounts falling due within one year (8,308) (12,117)
-------- -------
Net current assets 2,318 2,805
-------- -------
Total assets less current liabilities 24,172 22,444
Creditors- amounts falling due after more than one year (8,546) (6,369)
Provisions for liabilities and charges (364) (37)
-------- -------
Net assets 15,262 16,038
-------- -------
Capital and reserves
Called up share capital 8,862 8,331
Share premium account 13,923 13,463
Other reserve 209 -
Profit and Loss account (8,213) (6,075)
-------- -------
Equity shareholders' funds 14,781 15,719
Equity minority interests 481 319
-------- -------
15,262 16,038
-------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2003 Unaudited Audited
Year ended Year ended
30 April 03 30 April 02
Notes #'000 #'000
Net cash inflow from operating (A) 3,288 3,914
activities ------- ----------- ----------
-------------------------
Returns on investment and servicing of
finance
Net interest paid (309) (320)
Interest element of finance lease rental (6) (4)
payments ------- ----------- ----------
(315) (324)
------------------------- ------- ----------- ----------
Taxation
Corporation tax payments (958) (1,218)
------------------------- ------- ----------- ----------
(958) (1,218)
------------------------- ------- ----------- ----------
Capital expenditure
Purchase of tangible fixed assets (666) (619)
Sale of tangible fixed assets 102 59
------------------------- ------- ----------- ----------
(564) (560)
------------------------- ------- ----------- ----------
Acquisitions and disposals
Licom acquisition payment and related (368) (1,654)
costs
Radan acquisition payment and related (2,463) -
costs
Lignatec acquisition payment and related (78) -
costs
Cash acquired in acquisitions 310 1,169
Disposal of subsidiary undertaking 176 -
Deferred consideration paid - (383)
------------------------- ------- ----------- ----------
(2,423) (868)
------------------------- ------- ----------- ----------
Equity dividend paid (333) (286)
------------------------- ------- ----------- ----------
Net cash (outflow)/inflow before use of (1,305) 658
liquid resources and financing ------- ----------- ----------
-------------------------
Management of liquid resources
------------------------- ------- ----------- ----------
Decrease/(increase) in short term 5,000 (1,000)
deposits
Financing
Proceeds from issue of shares for cash - 55
Loan notes repaid (4,844) -
Capital element of finance lease (77) (25)
payments
New bank loans received 3,598 5,054
Bank loan repaid (1,314) (5,199)
------------------------- ------- ----------- ----------
(2,637) (115)
------------------------- ------- ----------- ----------
Increase/(decrease) in cash (B) 1,058 (457)
------------------------- ------- ----------- ----------
(A) Reconciliation of operating (loss)/profit
to net
cash inflow from operating activities:
Unaudited Audited
Year ended Year ended
30 April 03 30 April 02
Continuing operations #'000 #'000
Operating (loss)/profit (432) 3,874
Goodwill amortisation 1,041 1,091
Depreciation 554 469
Decrease/(increase) in stocks 165 (16)
Decrease/(increase) in debtors 2,026 (473)
Decrease in creditors (126) (1,047)
Loss on fixed asset disposal 60 16
-------------------------- ----------- -----------
Net cash inflow from operating activities 3,288 3,914
-------------------------- ----------- -----------
(B) Reconciliation of net (debt)/funds
Increase/(decrease) in cash 1,058 (457)
Decrease in debt and finance leases 2,637 170
(Decrease)/increase in liquid resources (5,000) 1,000
-------------------------- ----------- -----------
Change in net (debt)/funds resulting from (1,305) 713
cash flow
Non-cash debt movements 282 (78)
Loan notes - (4,844)
-------------------------- ----------- -----------
Increase in net debt in the year (1,023) (4,209)
Net debt at start of year (5,634) (1,425)
-------------------------- ----------- -----------
Net debt at close of year (6,657) (5,634)
-------------------------- ----------- -----------
(C) Analysis of net (debt)/
funds movement
Position Non Position
30 April Cash cash 30 April
2002 flow items 2003
#'000 #'000 #'000 #'000
Cash at bank 1,152 583 - 1,735
Overdraft (1,921) 475 - (1,446)
---------------------- --- --------- --------- --------- ---------
(769) 1,058 - 289
Debt due within 1 year
Bank loans (1,441) 1,314 (1,250) (1,377)
HP and lease (23) 77 (150) (96)
liability
Loan notes (4,844) 4,844 - -
Debt due over 1 year
Loan notes (2,400) - - (2,400)
Bank loans (3,613) (3,598) 1,705 (5,506)
HP and lease (44) - (23) (67)
liability
Bank deposits included in 7,500 (5,000) - 2,500
cash ---
--------- --------- --------- ---------
(5,634) (1,305) 282 (6,657)
---- -------------------- --- --------- --------- --------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR NKOKNKBKDCOK