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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bus.Sys.Grp | LSE:BSG | London | Ordinary Share | GB0008222043 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 18.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 6254I
Business Systems Group Hldgs PLC
21 November 2008
21 November 2008
Business Systems Group Holdings plc ('BSG' or the 'Group')
Interim results for the six months ended 30 September 2008
Business Systems Group Holdings plc, which designs, deploys and operates a range of managed services, information technology products
and solutions, today announces interim results for the six months ended 30 September 2008.
Contacts:
Business Systems Group Holdings plc
Nick Gerard, Group Chief Executive Tel: 020 7880 8888
James Wheaton, Group Finance Director
Nominated adviser and broker: KBC Peel Hunt
Oliver Scott Tel: 020 7418 8900
Richard Kauffer
CHAIRMAN'S STATEMENT
I am pleased to present the results for the Group for the six months ended 30 September 2008. It has been an encouraging six months
which has seen increased profitability and continued growth in Managed Services.
Business Systems Group (BSG) has three businesses; Managed Services, Hardware supply and Solutions (application development). While all
three businesses are targeted to increase profitability, it is growth of the Managed Services business that is core to the Group's strategy.
Managed Services typically are sold to medium sized businesses for an initial contract period of three to five years. The service will
usually entail the monitoring and support of customer applications on a system that has been designed and deployed by BSG, and often on a
platform owned by the Group. Hence we aim to have a long-term and strategic partnership with our customers, which should produce predictable
cash flows and lower sales costs.
The key points to note for the period were:
* In the first six months of the year, the Group produced an operating profit of £544k compared with £225k in the corresponding
period of the prior year, a rise of 142%. The profit before tax was £808k, up from £465k in the same period of the prior year, a rise of
74%.
* EBITDA* grew to £975k for the six months, up from £552k in the corresponding period of the prior year, a rise of 77%.
* Revenue rose by 14% from £15.8m to £18.0m. This reflected growth in all divisions. Compared to the same period a year before
Hardware grew by 14%, Managed Services by 12% and Solutions by 18%.
* Contractual revenues grew to an annualised £8.8m in September 2008, from an annualised £8.4m in March 2008, an increase of £400k.
* Gross margins reflected the rise in services sales with an increase from 21% in the previous financial year to 22% in the first
six months of this year. Importantly the gross margin on Managed Services rose from 28% last year to 32%, demonstrating the economies of
scale possible in this business.
* The Group's balance sheet remains strong with £8.1m cash and no debt. This compares with £7.1m of cash a year ago.
* Earnings per share were 1.04p, up from 0.61p in the same period in 2007, a rise of 70%.
*Earnings before interest tax depreciation and amortisation (EBITDA) is operating profit plus depreciation.
Outlook
The Group has performed strongly in the first six months of this year. It is particularly pleasing to report that contractual revenues
have reached a new record for the Group, and that profit margins in this business are improving. The Board expects these trends to continue
in the second half of the year, with the share of gross profit arising from Managed Services likely to reach 50% of the Group's total for
the first time. This will help to protect the Group from any wider slow down in demand for IT as the macro economic environment
deteriorates. While there is likely to be some impact on project driven revenues, we will work hard with our customers to ensure they reap
the benefits from harnessing the latest advances in information technology as they address the challenges in their own markets. At the same
time our investment in Managed Services, and the growth of contractual revenues, will continue.
Vin Murria
Chairman
20 November 2008
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited AuditedYear ended 31
Six months to 30 Six months to 30 March2008
September September
2008 2007
Notes £*000 £*000 £*000
Revenue 2 17,970 15,823 31,427
Cost of sales (14,078) (12,664) (24,891)
Gross profit 2 3,892 3,159 6,536
Administrative expenses (3,348) (2,934) (6,120)
Operating profit 2 544 225 416
Finance income 264 240 509
Profit before taxation 808 465 925
Taxation 3 - - -
Profit for the period 2 808 465 925
Basic earnings per share 5 5 1.04p 1.02p 0.61p 0.60p 1.22p 1.18p
Diluted earnings per share
CONSOLIDATED BALANCE SHEET
Unaudited at Unaudited at Audited at
30 September 30 September 31 March
2008 2007 2008
£'000 £'000 £'000
Non-current Assets
Property, plant and equipment 1,603 1,393 1,534
1,603 1,393 1,534
Current Assets
Inventories 131 78 95
Trade and other receivables 7,084 7,811 5,784
Cash and cash equivalents 8,099 7,140 9,331
15,314 15,029 15,210
Current Liabilities
Trade and other payables (7,874) (8,452) (8,217)
Net Current Assets 7,440 6,577 6,993
Net Assets 9,043 7,970 8,527
Equity
Share capital 4,209 4,209 4,209
Own shares held (749) (872) (749)
Retained earnings 5,609 4,725 5,114
EBT reserve (26) (92) (47)
Total Equity 9,043 7,970 8,527
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Own Retained earnings EBT Total
capital shares reserve
held
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2007 4,209 (872) 4,255 (93) 7,499
Profit for the period - - 465 - 465
Movement in reserves from EBT
redemptions - - - 1 1
Share-based payment - - 5 - 5
Balance at 30 September 2007 4,209 (872) 4,725 (92) 7,970
Share Own Retained earnings EBT Total
capital shares reserve
held
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2008 4,209 (749) 5,114 (47) 8,527
Profit for the period - - 808 - 808
Movement in reserves from EBT
redemptions - - (5) 21 16
Dividends - - (311) - (311)
Share-based payment - - 3 - 3
Balance at 30 September 2008 4,209 (749) 5,609 (26) 9,043
CONSOLIDATED CASH FLOW STATEMENT
Audited
Unaudited Unaudited
Six Six Year ended
months to months to
30 30 31 March
September September
2008 2007 2008
£*000 £*000 £*000
Cash flows from operating
activities
Profit after taxation 808 465 925
Adjustments for:
Depreciation 431 327 692
Share-based payment 3 5 13
Interest income (264) (240) (509)
Decrease in provisions - (150) (150)
Operating cash flows before 978 407 971
movement in working capital
(Increase)/decrease in (36) 63 46
inventories
(Increase)/decrease in trade (1,300) (1,593) 434
and other receivables
(Decrease)/increase in trade (345) 263 28
payables
Cash (used)/generated from (703) (860) 1,479
operations
Income taxes paid - - -
Net cash (outflow)/inflow from (703) (860) 1,479
operating activities
Cash flows from investing
activities
Purchase of property, plant (501) (485) (991)
and equipment
Interest received 264 240 509
Net cash used in investing (237) (245) (482)
activities
Cash flows from financing
activities
Proceeds of sale of shares 16 1 6
from EBT
Purchase of shares from 3 - 84
treasury
Dividends paid (311) - -
Net cash (used)/generated from (292) 1 90
financing activities
Net (decrease)/increase in (1,232) (1,104) 1,087
cash and cash equivalents
Cash and cash equivalents at 9,331 8,244 8,244
beginning of period
Cash and cash equivalents at 8,099 7,140 9,331
end of period
NOTES
1. Basis of Preparation
These interim condensed consolidated financial statements are for the six months ended 30 September 2008. They have been prepared on a
basis consistent with anticipated IFRS (International Financial Reporting Standards) accounting policies based on those IFRS which are
expected to be endorsed by the European Commission by the time the Group prepares its consolidated financial statements as at 31 March 2009.
They do not include all the information required for full annual financial statements.
These financial statements have been prepared under the historical cost convention.
The financial information for the six months ended 30 September 2008 and 30 September 2007 have been neither audited nor reviewed and
does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.
The financial statements and statutory accounts for the year ended 31 March 2008 have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985.
The interim results for the six months ended 30 September 2008 were approved by the Board of Directors on 20 November 2008.
The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the
application of accounting policies, the reported amounts of balance sheet items at the period end and the reported amount of revenue and
expense during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily
apparent from other sources. However, the actual results may differ from these estimates. The estimates and underlying assumptions are
reviewed on an on-going basis.
The recognition of revenue and profit on projects which span the period end constitutes the main area of judgement exercised by the
Board in respect of the Group's results. The Board has relied on its experience and that of the teams involved and project management
methodologies used by the business to estimate the final outcome of each project, and to recognise the appropriate portion for the period.
Additionally the Board exercises judgement in assessing the extent to which a deferred tax asset is recognised, based on the probability
that future profit will be available to utilise the asset.
The accounting policies which the Group has adopted under IFRS have been applied consistently to all periods presented.
Basis of Consolidation
The Group accounts incorporate the results of the Company and its subsidiaries, Business Systems Group Limited and Webgenerics Limited.
The principal activities of the Group are the provision of managed IT services to customers, and the design and deployment of IT
infrastructure solutions.
2. Business Segmentation
The Group's turnover and profit on ordinary activities are derived entirely from its principal activity. For management purposes the
Group had three operating units during the period; Hardware, Managed Services and Solutions (application development). These units are the
primary segments of the Group.
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
£'000 £'000 £'000
Revenue
Hardware 10,690 9,392 18,223
Managed Services 5,480 4,910 10,163
Solutions 1,800 1,521 3,041
Total 17,970 15,823 31,427
Gross Profit
Hardware 1,310 1,181 2,410
Managed Services 1,755 1,348 2,892
Solutions 827 630 1,234
Total 3,892 3,159 6,536
Operating profit
Hardware
Managed Services 672 546 1,151
Solutions 879 589 1,297
Central costs 647 522 981
Operating profit (1,654) (1,432) (3,013)
Finance income 544 225 416
Profit for the period 264 240 509
808 465 925
The operations are integrated to such an extent that it is not practical to disaggregate the assets and liabilities of the Group into
segments.
3. Taxation
The Group has not incurred any taxation in the period due to the losses available for relief.
A deferred tax asset has not been recognised in respect of timing differences relating to depreciation in excess of capital allowances
claimed and losses carried forward as there is insufficient evidence that the asset will be recovered.
4. Dividend
No interim dividend will be paid in respect of the six month period ending 30 September 2008 (2007: nil).
5. Earnings per share
Basic earnings per share has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number
of ordinary shares in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of
conversion of all dilutive potential ordinary shares. The Group has only one category of dilutive potential ordinary shares, those share
options granted under the Enterprise Management Incentive Plan.
Unaudited Unaudited Unaudited
Six months to 30 Six months to 30 Year ended
September September 31 March
2008 2007
2008
Profit for the financial
period and basic and diluted
earnings attributable to
ordinary shareholders (£'000) 465
808 925
Weighted average number of
ordinary shares ('000) 77,633 75,946 76,079
Effect of dilutive share 2,204
options ('000) 1,405 1,985
Adjusted weighted average
number of ordinary shares 79,038 78,150 78,064
('000)
Earnings per share 1.04p 0.61p 1.22p
Diluted earnings per share 1.02p 0.60p 1.18p
6. Copies of Interim Report
The interim report will be mailed to shareholders and copies will also be available at the Company's registered office at BSG House,
226-236 City Road, London, EC1V 2TT and at the Company's website at www.bsg.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR URVNRWARAUAA
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