Interim Results
September 03 2003 - 3:01AM
UK Regulatory
RNS Number:3067P
Wealth Management Software PLC
03 September 2003
FOR IMMEDIATE RELEASE 3 September 2003
WEALTH MANAGEMENT SOFTWARE PLC
INTERIM RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2003
Wealth Management Software plc, the West Midlands based software developer and
supplier of integrated software products to the financial services, health and
property markets, announces interim results for the half year ended 30 June
2003.
KEY POINTS
* Operating profit before goodwill amortisation increased 43% to
#0.35m (2002: #0.25m) reflecting benefits of cost reductions
implemented in 2002 as well as strategic withdrawal from low margin
and loss making activities;
* Turnover #3.97m (2002: #6.07m); profit before tax #0.21m (2002:
#0.015m);
* Cash increased to #1.92m (December 2002: #1.44m);
* Earnings per share excluding exceptional items and goodwill of 0.90p
(2002: 0.62p);
* Continued enhancement of LISA(R) with two contracts announced in
first half at BWD Rensburg and Bankhaus Baur;
* Customer enhancements at a variety of sites which have recently gone
live are producing steady stream of professional services and
maintenance revenues;
* Other projects, including #3m NHS development contract on track for
delivery this year with further professional services revenues
expected;
On outlook, Paul Newton, Chairman said:
"There are now signs that the long decline in most software markets,
particularly in Financial Services has "bottomed out". We are pleased with the
achievements made in the first half of 2003 and are confident of further
profitable growth ahead."
For further information:
Paul Newton, Chairman
Giles Trigg, Chief Financial Officer
Wealth Management Software 0121 550 9222
Richard Darby
Suzanne Brocks
Buchanan Communications 020 7466 5000
Chairman's Statement
Results
I am pleased to report that the Company has achieved an operating profit (before
goodwill amortisation) for the six months ended 30 June 2003, of #0.35 million,
43 percent up on the same period last year.
The Company is now seeing the benefits of the cost reductions implemented during
2002 and of the strategic withdrawal from low margin and loss making activities.
Whilst the revenue has been reduced as a result of the strategic withdrawal,
overall profit levels have increased. In the six months ended 30 June 2003 the
Company generated an operating profit (before goodwill amortisation) of #0.35
million (2002: #0.25 million) on turnover of #3.97 million (2002: #6.074
million). Operating profit amounted to #0.186 million (2002: #0.008 million)
and profit before tax amounted to #0.21 million (2002: #0.015 million).
Earnings per share (excluding exceptional items and goodwill) for the six month
period amounted to 0.90p (2002: 0.62p). Basic and diluted earnings per share
were 0.51p (2002: 0.04p). No interim dividend is declared.
Cash reserves have increased from #1.44 million at 31 December 2002 to #1.92
million at 30 June 2003.
Operations
The Company continues to enhance its LISA(R) product and has been awarded two
further LISA(R) orders in the first half as announced at the AGM on 10 July
2003.
BWD Rensburg has placed an order for LISA(R) Document Broker and LISA(R)
Document Warehouse. The value of this contract is #350,000 of which #180,000
represents the licence fee. The project will be implemented between July 2003
and June 2004, with licence revenues recognised equally between the two years.
We have also received our second order in Germany, from Bankhaus Bauer AG in
Stuttgart, for LISA(R) Fund Manager. This will provide the bank with
comprehensive European private client portfolio management. The contract is
valued at #145,000 and the revenue will be recognised in the second half of this
year. As part of the contract we will develop a European business model
solution that should enhance the Company's abilities to win further orders in
Germany.
We continue to work on customer enhancements at a variety of sites which have
recently gone live producing a steady stream of professional services and
maintenance revenues. Other projects, including the #3 million NHS development
contract, are on track for delivery this year and a good stream of professional
services revenues is expected from these projects. Our new LISA(R) Property
Asset Management System is now live at BAA, where it supports a portfolio of
over 50,000 properties.
The Company's performance depends upon its employees and it is through their
efforts that the challenges of the last year have been successfully met. I would
like to thank them for their dedication during this period.
Finance
Cash at 30 June 2003 amounted to #1.92 million and finance lease commitments
amounted to #0.01 million giving net funds of #1.91 million compared to #1.44
million at 31 December 2002.
Net Assets at 30 June 2003 were #4.9 million, compared to #4.7 million at 31
December 2002.
Strategy & Outlook
There has been a long decline in most software markets, particularly in
Financial Services. During this period, the Company has aligned its cost base
with the lower level of activity in its markets thereby remaining profitable.
However there are now signs that the decline has "bottomed out" and, because our
software proposition gives our customers rapid business benefits through cost
reductions and a greater competitive edge, we have been able to identify a
pipeline of potential contracts, which contain both professional services and
licence revenues, which will come to fruition through the remainder of 2003 and
beyond.
Our base in Europe is growing steadily and a number of further prospective
customers have been identified. In particular we are hopeful that our project to
provide a new German client with a full European Private Client management
system will generate additional European opportunities.
We are pleased with the achievements made in the first half of 2003 and are
confident of further profitable growth ahead.
Paul Newton
Chairman 3 September 2003
Consolidated Profit & Loss Account
Six Months Ended 30 June 2003
6 months 6 months 12 months
to 30 June to 30 June to 31 December
2003 2002 2002
Total Total Total
#000 #000 #000
Turnover 3,969 6,074 10,997
Operating Charges (3,783) (6,066) (12,081)
Operating profit before goodwill 351 246 238
amortisation
Goodwill amortisation (165) (238) (1,322)
Operating profit/(loss) on ordinary
activities before interest and taxation 186 8 (1,084)
Loss on sale of operations - (7) (7)
Profit/(loss) on ordinary activities before
interest and taxation 186 1 (1,091)
Net Interest Receivable 22 14 30
Profit/(loss) on ordinary activities before
taxation 208 15 (1,061)
Taxation (Note 4) 6 - (87)
Profit/(loss) for the period 214 15 (1,148)
Earnings per share (Note 3)
Basic earnings/(loss) and diluted
earnings/(loss) per share 0.51p 0.04p (2.74)p
Earnings per share excluding exceptional
items and goodwill 0.90p 0.62p 1.12p
Consolidated Balance Sheet
As at 30 June 2003
(Restated note 5)
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Fixed Assets
Goodwill 1,875 3,124 2,040
Tangible Assets 372 854 597
Investments 501 502 502
2,748 4,480 3,139
Current Assets
Debtors 2,172 3,032 2,319
Cash at bank and in hand 1,916 1,424 1,446
4,088 4,456 3,765
Creditors: Amounts falling due within one year (1,923) (3,062) (2,205)
Net Current Assets 2,165 1,394 1,560
Total assets less current liabilities 4,913 5,874 4,699
Creditors amounts falling due after one year - (12) -
Net Assets 4,913 5,862 4,699
Capital and Reserves
Share Capital 336 336 336
Share Premium 12,584 12,584 12,584
Profit & Loss account (8,007) (7,058) (8,221)
Shareholders' funds 4,913 5,862 4,699
Reconciliation of Movements in Consolidated Shareholders' Funds
Six Months Ended 30 June 2003
(Restated note 5)
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Profit/(loss) for the period 214 15 (1,148)
Net increase/(reduction) in Shareholders' Funds 214 15 (1,148)
Opening Shareholders' Funds 4,699 5,847 5,847
Closing Shareholders' Funds 4,913 5,862 4,699
Consolidated Cashflow Statement
Six months ended 30 June 2003
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Net cash inflow from operating activities 446 461 487
Returns on investment and servicing of finance 22 14 30
Taxation 6 (50) (50)
Capital expenditure and financial investment 1 (36) (33)
Acquisitions and disposals - 430 430
Cash inflow before financing 475 819 864
Financing (5) (22) (45)
Net increase in cash for the period 470 797 819
Reconciliation of net cash to movement in net funds
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Net increase in cash in the period 470 797 819
Cash inflow from change in debt and lease financing 5 22 45
Movement in net funds resulting from cash flows 475 819 864
Net cash at the start of the period 1,437 573 573
Net cash at the end of the period 1,912 1,392 1,437
Reconciliation of operating profit/(loss) to net cash inflow from operating
activities
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Operating profit/(loss) 186 8 (1,084)
Reorganisation provision - - 55
Depreciation and amortisation charges 388 515 980
Impairment of goodwill - - 846
(Profit)/loss on disposal of tangible fixed assets (6) 14 23
Increase in working capital (122) (76) (333)
Net cash inflow from operating activities 446 461 487
Analysis of net funds
1 January 30 June
2003 Cash flow 2003
#000 #000 #000
Cash at bank and in hand 1,446 470 1,916
Finance leases (9) 5 (4)
Total 1,437 475 1,912
Notes to the Accounts
1. The interim results for the six months ended 30 June 2003 have
neither been reviewed nor audited and have been prepared on the basis of
accounting policies consistent with those adopted for the year ended 31 December
2002 as set out in the financial statements of the group. The financial
information contained herein does not constitute statutory accounts within the
meaning of section 240 of the Companies' Act 1985. Statutory accounts for the
year ended 31 December 2002, incorporating an unqualified audit report, have
been filed with the Registrar of Companies.
2. In the year to 31 December 2002, exceptional charges of #1,141,000
were charged to the profit and loss account which principally comprised a
provision for impairment in goodwill of #846,000 together with costs associated
with reorganising the group.
3. Earnings per share
30 June 30 June 31 December
2003 2002 2002
#000 #000 #000
Earnings/(loss) per share has been calculated on the
following profit/(losses) and number of shares
Profit/(loss) for the period 214 15 (1,148)
Attributable to exceptional items - 7 1,141
Attributable to goodwill 165 238 476
Underlying profit for the period excluding goodwill and
exceptional items 379 260 469
Weighted average number of shares 41,967,049 41,967,049 41,967,049
Basic earnings/(loss) and diluted earnings/(loss) per share 0.51p 0.04p (2.74)p
Earnings per share excluding exceptional items
and goodwill 0.90p 0.62p 1.12p
4. Taxation
Taxation in the six months to 30 June 2003 includes a research and development
tax credit.
5. The 31 December 2001 comparatives were restated in the financial
statements for the year ended 31 December 2002 to recognise a deferred tax asset
of #237,000, following the adoption of FRS19 "Deferred Tax". The 30 June 2002
comparatives have been restated to recognise an equivalent amount at that date.
There is no impact on the profit and loss account for the six months ended 30
June 2002.
6. A copy of this announcement is being sent to all shareholders and
further copies are available from the Company Secretary, Fountain House, Great
Cornbow, Halesowen, West Midlands B63 3BL.
This information is provided by RNS
The company news service from the London Stock Exchange
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