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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Dillistone Group Plc | LSE:DSG | London | Ordinary Share | GB00B13QQB40 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.00 | 8.00 | 10.00 | 9.00 | 9.00 | 9.00 | 0.00 | 08:00:08 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Related Svcs, Nec | 5.7M | -183k | -0.0093 | -9.68 | 1.77M |
From Apr 2019 to Apr 2024
TIDMDSG
RNS Number : 3311D
Dillistone Group PLC
26 April 2017
26 April 2017
Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Final Results
Dillistone Group Plc, the AIM quoted supplier of recruitment software for the international recruitment industry through its Dillistone Systems and Voyager Software divisions, is pleased to announce its audited final results for the 12 months ended 31 December 2016.
Highlights for the year:
-- Revenues up 6% from 2015 to GBP9.963m -- Record level of recurring revenues of GBP7.027m, up 6% from 2015
-- Recurring revenues, representing 71% of Group revenue, cover approximately all of administrative expenses before acquisition related and one-off costs
-- Adjusted operating profit for the year up 3% to GBP1.463m
-- Profit after tax for the year is GBP0.526m after a pre-tax one-off amortisation adjustment of GBP0.720m.
-- Adjusted basic EPS fell slightly to 7.10p (2015: 7.26p) -- Basic EPS fell to 2.68p (2015: 6.20p) reflecting the amortisation adjustment -- Final dividend of 2.8p per share recommended (2015: 2.75p) -- Net cash funds of GBP1.379m (2015: GBP1.270m)
-- Dillistone Systems division reports strong turnaround in new business wins with over 100 new client firms signing up in period with a total contract value of over GBP1.000m. Revenue up 5% to GBP4.858m
-- Voyager Software division saw an 18% increase in new business wins in 2016; launched ISV Online, and the first of a suite of mobile apps. Revenues grew 6% to GBP5.105m
Commenting on the results and prospects, Mike Love, Non-Executive Chairman, said:
"Product development continues to be a priority with a number of upgrades and new product launches successfully achieved in 2016. The year delivered a record level of revenues, and equally importantly, recurring revenues.
"Overall, despite what we consider to be short term economic turbulence, the Group believes that it is in a strong position in its core markets and is confident of future progress. As a result, we are delighted to propose an increase in our final dividend of 1.8% to 2.8p."
Definitions:
(1) Adjusted operating profit is statutory operating profit before acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs. See note 4
(2) Adjusted EBITDA is adjusted operating profit with depreciation and amortisation added back.
(3) Net cash funds are cash and cash equivalents held less bank borrowings
(4.) Adjusted basic EPS is computed from statutory profits after tax adjusted to exclude the post-tax effect of acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs
Results Webinar - Jason Starr, Chief Executive, and Julie Pomeroy, Finance Director, will be hosting a webinar to review the results at 3.00pm today. To register please visit https://attendee.gotowebinar.com/register/1261206189971767042 or contact Tom Cooper on tom.cooper@walbrookpr.com or 0797 122 1972.
Annual Report and Accounts - The final results announcement can be downloaded from the Company's website (www.dillistonegroup.com). Copies of the Annual Report and Accounts (in addition to the notice of the Annual General Meeting) will be sent to shareholders by 16 May 2017 for approval at the Annual General Meeting to be held on 7 June 2017.
Enquiries:
Hot Features
Premium
Dillistone Group
Plc
Mike Love Chairman 020 7749 6100
Jason Starr Chief Executive 020 7749 6100
Julie Pomeroy Finance Director 020 7749 6100
WH Ireland Limited (Nominated
adviser)
Head of Corporate
Chris Fielding Finance 020 7220 1650
Walbrook PR
Tom Cooper /
Paul Vann 020 7933 8780
0797 122 1972
tom.cooper@walbrookpr.com
Notes to Editors:
Dillistone Group Plc (www.dillistonegroup.com) is a leader in the supply and support of software and services to the recruitment industry. It has four trading businesses operating through two divisions: Dillistone Systems, which targets the executive search industry (www.dillistone.com); and Voyager Software, which targets other recruitment markets (www.voyagersoftware.com).
Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014. The Group operates under the FileFinder, Infinity, Evolve and ISV brands.
Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006. The Group employs over 100 people globally with offices in London (head office) Basingstoke and Southampton, Frankfurt, New Jersey and Sydney.
Chairman's statement
Product development continues to be a priority with a number of upgrades and new product launches successfully achieved in 2016. The Group delivered its best ever revenue performance with revenue up 6% to GBP9.963m. This performance was impacted by the Brexit vote in the UK, which reduced demand in our home markets while weakening Sterling and, therefore, increasing the value of our overseas sales.
Underlying profit before tax, acquisition costs and one-off adjustments rose 3% to GBP1.458m. As mentioned in our pre close statement, the Group has undertaken a review of its accounting judgements in respect of the amortisation of platform development costs and subsequently decided to write these costs off over a period of five years, rather than a period of five to ten years, resulting in a one-off adjustment of GBP0.720m. Accordingly, operating profit fell to GBP0.412m with reported profit after tax falling to GBP0.526m. This is a non-cash accounting adjustment and brings our accounting treatment into line with industry practice. The resulting basic EPS for the period was 2.68p.
Dividends
The Board was pleased to increase the interim dividend payment in September 2016 to 1.375p per share (2015: 1.35p) and has recommended an increased final dividend of 2.8p per share (2015: 2.75p), subject to shareholder approval, payable on 27 June 2017 to holders on the register on 2 June 2017. Shares will trade ex dividend from 1 June 2017. This takes the total dividend based on the 2016 results to 4.175p (2015: 4.10p), and gives a yield of 4.9% on a share price of 84.5p.
This represents our fifth successive year on year increase in the dividend, in line with our policy of progressing dividend payments, subject to the cash needs of the business. The business is committed to maintaining its policy of investing in its products and services whilst rewarding its shareholders.
Staff
Our staff are fundamental to our success. It is through their efforts, commitment and determination that we continue to be a leading technology provider in the sectors we serve. On behalf of the Board I would like to take this opportunity to thank all of our staff.
Outlook
We are pleased to note that total revenue in Q1 2017 is ahead of the same period in 2016 despite turbulent markets for many of our recruitment clients.
Although the Group derives revenue from clients around the Globe, 72% of our revenues in 2016 were derived from the UK recruitment market and the decision of the UK to "Brexit", taken in June 2016, has had an impact on this sector. In turn, this has impacted our new business sales: while incoming orders in the first quarter of 2016 benefited from a confident UK economy, this has not been the case in the second half of 2016 and the first quarter of 2017.
While new business orders may have been impacted by economic turbulence, our recurring revenue base has reached record levels. This is true for both of our divisions and these long term recurring revenues are expected to cover the majority of our administrative costs and thereby giving us confidence in the future of the Group.
Furthermore, we are anticipating an improvement in orders in the latter months of 2017 and the early part of 2018 as the incoming General Data Protection Regulation ("GDPR") rules, which come into effect on 25 May 2018 and which will require recruitment firms to take steps in the run up, are likely to have a significant impact on the recruitment technology space. We believe that this impact will be positive for the Group.
Technological innovation is key to our long term success. In addition to the ongoing development of our existing product range, the Group is investing in the creation of an exciting new product. While development of this product has begun, it will not generate significant revenue prior to 2018, and although the majority of development costs are expected to be capitalised other costs will be expensed in 2017. Despite the increased expenditure, we believe that this product will have a significant positive impact in the future. We are currently appraising debt funding arrangements for the completion and launch of this new product.
Overall, despite what we consider to be short term economic turbulence, the Group believes that it is in a strong position in its core markets and is confident of future progress. As a result, we are delighted to propose an increase in our final dividend of 1.8% to 2.8p (2015: 2.75p).
Dr Mike Love
Non-Executive Chairman
CEO's Review
Dillistone Group Plc is a global leader in the supply of technology solutions and services to the recruitment sector worldwide.
Strategy and objectives
The Group's strategy is to grow the business both organically and through acquisition. This strategy is made possible through our commitment to product development, which ensures that the business continues to command a leading role in all of the markets in which it operates.
Our acquisition strategy typically entails consideration of businesses offering:
-- products that would further increase market share in the Group's core markets; -- legacy applications, where clients could be transferred to our modern suite of products; or -- complementary applications, which may be cross-sold to clients of the Group.
The Group's objectives are principally to:
-- ensure our products meet the needs of the recruitment sector through continual investment and development;
-- be a leading player in all of the markets we serve; -- develop our staff delivering progressive career development;
-- increase our profitability and deliver increased shareholder value year on year in conjunction with a progressive dividend policy.
Key Performance Indicators (KPIs)
The Board and management use absolute figures to monitor the performance of the business using the following financial KPIs:
FY FY measure used Met
2015 2016 by management /Not
GBP000 GBP000 met
----------------- ------------ ------------ ---------------- ------
year on year
Total revenues 9,437 9,963 growth met
------------------ ------------ ------------ ---------------- ------
Recurring year on year
revenues 6,606 7,027 growth met
------------------ ------------ ------------ ---------------- ------
Non recurring year on year
revenues 2,333 2,370 growth met
------------------ ------------ ------------ ---------------- ------
Adjusted
profit before year on year
tax 1,416 1,458 growth met
------------------ ------------ ------------ ---------------- ------
sufficient
Cash less cash resources
borrowings 1,270 1,379 maintained met
------------------ ------------ ------------ ---------------- ------
Adjusted profit before tax is statutory profit before acquisition costs, related intangible amortisation, movements in contingent consideration and other one-off costs. See note 4 and note 7
In addition, the Board monitors order levels and employee numbers as well as performance against budget.
Our business model
The business is split into two divisions, Dillistone Systems and Voyager Software. Dillistone Systems specialises in the supply of software and services into executive-level recruitment teams. Voyager Software's clientele are primarily involved in contingent recruitment, including permanent placement, contract placement and the provision of temporary staff. Across our subsidiaries, we work with over 2,000 firms in approximately 60 countries.
The majority of our products are delivered through one or more of the following:
1. an upfront licence fee plus a recurring support fee; 2. Software as a Service (SaaS) subscription basis; or 3. a hybrid model incorporating an upfront payment and recurring support and Cloud hosting fees.
There is a continuing move towards our Cloud delivery services.
The business operates out of four countries: the UK, Germany, the US and Australia. As well as supplying and supporting our software we also host the software for a proportion of our clients. This is done through data centres in Europe, the Americas, Singapore and Australia.
Group review of the business
2016 saw recurring revenues grow 6% to GBP7.027m (2015: GBP6.606m) reflecting, in part, a foreign currency impact from Sterling weakening in 2016 (impact 3%). Non-recurring revenues increased 2% to GBP2.370m (2015: GBP2.333m). As a result, overall revenues increased by 6% to GBP9.963m (2015: GBP9.437m) with recurring revenues representing 71% of Group revenues (2015: 70%). Overheads have increased across the business mainly as a result of the one-off adjustment in respect of the amortisation of platform development costs, referred to below, with an adverse impact on results of GBP0.720m. Clearly, this adjustment is an accounting change in an estimate and is cash neutral. Adjusted EBITDA saw a 6% increase to GBP2.433m (2015: GBP2.285m). Operating profit before acquisition related items and one-off adjustments increased by 3% to GBP1.463m (2015: GBP1.424m) and pre-tax profits before acquisition related items and one-off adjustments also increased by 3% to GBP1.458m (2015: GBP1.416m). Operating profit for the year was GBP0.412m (2015: GBP1.108m) and profit for the year was GBP0.526m (2015: GBP1.212m).
Divisional Reviews
Dillistone Systems
The Dillistone Systems division is primarily focused on providing technology solutions to the executive search market via our range of "FileFinder" applications. This client group is made up of both executive search firms and executive search teams in major organisations.
Dillistone Systems' head office is in London and it has offices in the US, Germany and Australia. The Division accounts for 49% (2015: 49%) of the Group's revenue and it saw revenue grow 5% to GBP4.858m (2015: GBP4.620m).
The Division had a difficult time in 2015 and we are delighted to see it return to growth in 2016. Our investment in product development led to a number of key new contract wins. We are delighted to report that - to the best of our knowledge - the largest single implementation on an Executive Search technology platform in the US in 2016 was our FileFinder Anywhere product. This implementation was by an existing client who chose to upgrade to our latest suite. Furthermore, we believe that the largest single implementation of an Executive Search technology platform in Europe in 2016 was also our FileFinder Anywhere product which was implemented by a firm which replaced a legacy tool with our technology, choosing to become a client for the first time.
The business signed up over 100 new clients in the period, with clients switching from direct competitors including Bullhorn, Cluen and Invenias, and we believe that our product has now returned to a position of market leadership.
Unfortunately, while our new business performance was good, the economy impacted on licence revenues from our existing client base, a large proportion of which are UK based. We typically enjoy additional sales from these firms as they grow, but in 2016 a larger proportion of those firms reduced licences rather than taking on additional seats.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 1% to GBP1.434m (2015: GBP1.425m). As discussed above, the Group reviewed its amortisation policy for capitalised development costs to bring it more into line with industry practice by writing off all such costs over five years rather than a range of five to ten years. The impact of this on the Dillistone division was GBP0.600m, increasing the total depreciation and amortisation charge to GBP1.229m (2015: GBP0.534m). Accordingly, operating profit fell 77% to GBP0.205m (2015: GBP0.891m).
We continue to invest in the FileFinder Anywhere product suite, which has included the release of a client portal, improved reporting functionality, improvements in our mobile offering and architectural enhancements to improve both performance and scalability.
Voyager Software
Voyager Software is a provider of technology products targeted at the entire recruitment landscape, from front office to back office and bureaus, and includes both recruitment management systems and pre-employment skills testing technology.
In 2016, the Voyager Software division accounted for 51% (2015: 51%) of Group revenues. The Division's revenues increased by 6% to GBP5.105m (2015: GBP4.831m). Segmental operating profit before amortisation and depreciation increased by 14% to GBP1.093m (2015: GBP0.956m). The impact of the change in amortisation policy for capitalised development was GBP0.120m, increasing the total depreciation and amortisation charge to GBP0.461m (2015: GBP0.327m). Divisional operating profit remained broadly unchanged at GBP0.632m (2015: GBP0.629m).
2016 saw some major developments in the Division including:
-- Development of Infinity Connect - A new mobile companion app for the popular Infinity SaaS solution, available for both iOS and Android devices.
-- Additional functionality release in Infinity (inc. Infinity SaaS) for the temporary recruitment sector
-- Further enhanced scalability of evolve through deployment on Amazon Web Services and implementation of Elastic Searching
-- Launch of ISV.Online - our new candidate skills testing platform.
The Board is confident that both Divisions have strong futures.
Financial Review
Total revenues increased by 6% to GBP9.963m (2015: GBP9.437m) with recurring revenues increasing by 6% to GBP7.027m (2015: GBP6.606m) while non-recurring revenues saw a 2% increase to GBP2.370m (2015: GBP2.333m). Third party revenue amounted to GBP0.566m in the period (2015: GBP0.498m). Revenue has benefitted from the weakening value of Sterling. Using 2015 exchange rates, revenues in 2016 would have been GBP9.651m.
Cost of sales increased by 13% to GBP1.478m (2015: GBP1.313m), mainly due to investment in cloud based hosting facilities through Azure and Amazon.
Administrative costs, excluding acquisition related items, depreciation and amortisation, rose 4% to GBP6.052m (2015: GBP5.839m). The Group has reviewed its amortisation policy for capitalised development costs to bring it more into line with industry practice by writing off all such costs over five years rather than a range of five to ten years. This has resulted in a one-off adjustment of GBP0.720m in the year, where the main impact was in the Dillistone division. Total depreciation and amortisation, including the one-off, adjustment increased to GBP1.690m (2015: GBP0.861m).
Acquisition related administrative costs totalled GBP0.331m (2015: GBP0.316m), and were in respect of the amortisation of intangibles arising on the Voyager, FCP and ISV acquisitions and movement in the estimation of contingent consideration. Finance cost includes GBP0.015m (2015: GBP0.028m) relating to the unwinding of the discount in respect of the contingent consideration.
Recurring revenues covered 100% of administrative expenses before acquisition related and one-off costs (2015: 99%). Excluding depreciation and amortisation of our own internal development, the administrative costs are covered 116% (2015: 113%) by recurring revenues.
There is a tax credit in 2016 of GBP0.134m (2015: credit GBP0.140m). The 2016 credit reflects the significant R&D tax credits available to both Dillistone Systems and Voyager Software divisions, the change in deferred tax rate from 18% to 17%, as well as the impact of the one-off adjustment in respect of amortisation of development costs and adjustments to prior year computations. These benefits are partially offset by the higher rates of corporation tax that are payable overseas. The acquisition related items tax credit reflects the reduction in deferred tax that arises as amortisation is charged in the profit and loss account.
Profits for the year before acquisition related and other one-off items fell 2% to GBP1.395m (2015: GBP1.419m) as 2015 adjusted profits benefitted from a tax credit of GBP0.003m (2016: tax charge of GBP0.063m). Profits for the year after acquisition related and other one-off items fell 57% to GBP0.526m (2015: GBP1.212m). Basic earnings per share (EPS) fell to 2.68p (2015: 6.20p). Fully diluted EPS fell to 2.62p (2015: 6.00p). Adjusted basic EPS fell 2% to 7.10p (2015: 7.26p).
Capital expenditure
The Group invested GBP1.126m in property, plant and equipment and product development during the year (2015: GBP1.045m). This expenditure included GBP1.056m (2015: GBP0.961m) spent on intangible related costs.
Trade and other payables
As with previous years, the trade and other payables include income which has been billed in advance but is not recognised as income at that time. This principally relates to support, SaaS and cloud hosting renewals, which are billed in 2016 but that are in respect of services to be delivered in 2017. Contractual income of this type is recognised monthly over the period to which it relates. It also includes deposits taken for work which has not yet been completed, as such income is only recognised when the work is substantially complete or the client software goes 'live'. Also included in trade and other payables is GBP0.375m (2015: GBP0.620m) in respect of contingent consideration. At the end of 2016, there are two tranches of contingent consideration payable in respect of ISV and these are dependent on the level of revenue achieved in 2016 and the nine month period to 30 September 2017.
Cash
The Group finished the year with cash funds of GBP1.537m (2015: GBP1.595m) and bank borrowings of GBP0.158m (2015: GBP0.325m). This is after capital expenditure of GBP1.126m, the payment to the vendors of ISV of GBP0.212m and dividend payments of GBP0.811m.
Julie Pomeroy
Finance Director
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2016
2016 2015
Note GBP'000 GBP'000
Revenue 5 9,963 9,437
Cost of sales (1,478) (1,313)
--------- ---------
Gross profit 8,485 8,124
Administrative
expenses (8,073) (7,016)
Operating profit 412 1,108
---------------------------- ----- --------- ---------
Adjusted operating
profit before acquisition
related and one
off items 4 1,463 1,424
Acquisition related
and one off items 7 (1,051) (316)
--------- ---------
Operating profit 412 1,108
---------------------------- ----- --------- ---------
Financial income 3 5
Financial cost (23) (41)
Profit before tax 392 1,072
Tax income 8 134 140
Profit for the
year 526 1,212
Other comprehensive
income
Items that will
be reclassified
subsequently to
profit and loss
Currency translation
differences 16 (27)
Total comprehensive
income for the
year 542 1,185
========= =========
Earnings per share
Basic 9 2.68p 6.20p Diluted 9 2.62p 6.00p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2016
Share Share Merger Retained Share Foreign Total
capital premium Reserve earnings option exchange
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance
at 31
December
2014 969 1,432 365 3,514 118 128 6,526
Comprehensive
income
Profit for
the year
ended 31
Dec 2015 - - - 1,212 - - 1,212
Other
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - (27) (27)
Total
comprehensive
income - - - 1,212 - (27) 1,185
--------- -------------- ------------- -------------- ----------- ------------- ------------
Transactions
with owners
Issue of
share capital 14 199 - - - - 213
Share option
charge - - - 75 (47) - 28
Dividends
paid - - - (793) - - (793)
--------- -------------- ------------- -------------- ----------- ------------- ------------
Total
transactions
with owners 14 199 - (718) (47) - (552)
Balance
at 31
December
2015 983 1,631 365 4,008 71 101 7,159
========= ============== ============= ============== =========== ============= ============
Comprehensive
income
Profit for
the year
ended 31
Dec 2016 - - - 526 - - 526
Other
comprehensive
income
Exchange
differences
on
translation
of overseas
operations - - - - - 16 16
Total
comprehensive
income - - - 526 - 16 542
--------- -------------- ------------- -------------- ----------- ------------- ------------
Transactions
with owners
Share option
charges - - - 2 14 - 16
Dividends
paid - - - (811) - - (811)
--------- -------------- ------------- -------------- ----------- ------------- ------------
Total
transactions
with owners - - - (809) 14 - (795)
Balance
at 31
December
2016 983 1,631 365 3,725 85 117 6,906
========= === ========
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2016
Group
2016 2015
ASSETS GBP'000 GBP'000
Non-current assets
Goodwill 3,415 3,415
Other intangible
assets 5,263 6,163
Property, plant
and equipment 215 257
Investments - -
8,893 9,835
Current assets
Inventories 5 16
Trade and other
receivables 2,196 1,736
Cash and cash
equivalents 1,537 1,595
3,738 3,347
Total assets 12,631 13,182
EQUITY AND LIABILITIES
Equity attributable
to owners of the
parent
Share capital 983 983
Share premium 1,631 1,631
Merger reserve 365 365
Retained earnings 3,725 4,008
Share option reserve 85 71
Translation reserve 117 101
--------- ---------
Total equity 6,906 7,159
--------- ---------
Liabilities
Non-current liabilities
Trade and other
payables 15 428
Borrowings - 158
Deferred tax liability 784 1,006
Current liabilities
Trade and other
payables 4,599 4,193
Borrowings 158 167
Current tax payable 169 71
--------- ---------
Total liabilities 5,725 6,023
Total liabilities
and equity 12,631 13,182
========= =========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2016
2016 2016 2015 2015
Operating activities GBP'000 GBP'000 GBP'000 GBP'000
Profit before tax 392 1,072
Adjustment for
Financial income (3) (5)
Financial cost 23 41
Depreciation and amortisation 2,069 1,240
Share option expense 16 28
Foreign exchange adjustments
arising from operations 31 (16)
Operating cash flows before 2,528 2,360
movement in working capital
(Increase) / decrease
in receivables (487) 278
Decrease in inventories 11 25
Increase / (decrease)
in payables 62 (307)
Taxation refunded/(paid) 24 (219)
-------- --------
Net cash generated from
operating activities 2,138 2,137
Investing activities
Interest received 3 5
Financial cost (8) (13)
Purchases of property,
plant and
equipment (70) (84)
Investment in development
costs (1,056) (961)
Contingent and deferred
consideration paid (212) (666)
Net cash used in investing
activities (1,343) (1,719)
Financing activities
Net proceeds from issue
of share capital - 213
Bank loan repayments made (167) (162)
Dividends paid (811) (793)
-------- --------
Net cash used in financing
activities (978) (742)
Net decrease in cash and cash
equivalents (183) (324)
Cash and cash equivalents
at 1,595 1,929
beginning of year
Effect of foreign exchange
rate changes 125 (10)
Cash and cash equivalents
at end of year 1,537 1,595
------------ --------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2015
1. Publication of non-statutory accounts
In accordance with section 435 of the Companies Act 2006, the Directors advise that the financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 31 December 2016 or 2015, but is derived from these financial statements. The financial statements for the year ended 31 December 2015 have been delivered to the Registrar of Companies. The financial statements for the year ended 31 December 2016 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The financial statements for the year ended 31 December 2016 will be forwarded to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have reported on these financial statements; their reports were unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.
The consolidated statement of financial position at 31 December 2016 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended have been extracted from the Group's financial statements. Those financial statements have not yet been delivered to the Registrar.
2. Basis of preparation
The preliminary announcement is extracted from the consolidated financial statements of the Group. The financial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances.
All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets or liabilities are eliminated in full.
3. Accounting policies and changes thereto
This preliminary announcement has been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2015.
4. Reconciliation of adjusted operating profits to consolidated statement of comprehensive income
Acquisition
related
Adjusted and Adjusted Acquisition
operating one-off operating related
profits items profits items
Note 2016 2016* 2016 2015 2015* 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 9,963 - 9,963 9,437 - 9,437
Cost of sales (1,478) - (1,478) (1,313) - (1,313)
------------------ -------------- --------- ----------- -------------- ---------
Gross profit 8,485 - 8,485 8,124 - 8,124
Administrative
expenses (7,022) (1,051) (8,073) (6,700) (316) (7,016)
Operating
profit 1,463 (1,051) 412 1,424 (316) 1,108
Financial
income 3 - 3 5 - 5
Financial
cost (8) (15) (23) (13) (28) (41)
Profit before
tax 1,458 (1,066) 392 1,416 (344) 1,072
Tax income
/ (expense) (63) 197 134 3 137 140
Profit for
the year 1,395 (869) 526 1,419 (207) 1,212
Other comprehensive
income net
of tax:
Currency translation
differences 16 - 16 (27) - (27)
Total comprehensive
income for
the year net
of tax 1,411 (869) 542 1,392 (207) 1,185
================== ============== ========= =========== ============== =========
Earnings per share - from continuing activities
Basic 9 7.10p 2.68p 7.26p 6.20p Diluted 9 6.95p 2.62p 7.02p 6.00p
* see accounts note 7
5. Segment reporting
The Board principally monitors the Group's operations in terms of results of the two divisions, Dillistone Systems and Voyager Software. Segment results reflect management charges made or received.
Divisional segments
For the year ended 31 December
2016
Dillistone Voyager Central Total
GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,858 5,105 - 9,963
----------- -------- ----------------- ----------
Segment EBITDA 1,434 1,093 (94) 2,433
Depreciation and
amortisation expense (1,229) (461) - (1,690)
-----------------
Segment result 205 632 (94) 743
Acquisition related
amortisation - - (379) (379)
Acquisition related
income - - 48 48
----------- -------- ----------------- ----------
Operating profit/(loss) 205 632 (425) 412
Financial income 3 - - 3
Loan interest - - (8) (8)
Acquisition related
interest expenses - - (15) (15)
----------
Profit before tax 392
Income tax expense 134
----------
Profit after tax 526
==========
Additions of non-current
assets 600 527 - 1,127
For the year ended 31 December
2015
Inter-divisional
Revenue
Dillistone Voyager Central Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 4,620 4,831 (14) - 9,437
----------- -------- ----------------- ---------- --------
Segment EBITDA 1,425 956 (96) 2,285
Depreciation and
amortisation expense (534) (327) - (861)
----------
Segment result 891 629 (96) 1,424
Acquisition related
amortisation - - (379) (379)
Acquisition related
charges - - 63 63
----------- -------- ---------- --------
Operating profit/(loss) 891 629 (412) 1,108
Financial income 4 1 - 5
Loan interest - - (13) (13)
Acquisition related
interest expenses - - (28) (28)
--------
Profit before tax 1,072
Income tax expense 140
--------
Profit after tax 1,212
========
Additions of non-current
assets 556 489 - 1,045
Products and services
The following table provides an analysis of the Group's revenue by products and services:
Revenue
2016 2015
GBP'000 GBP'000
Recurring income 7,027 6,606
Non-recurring income 2,370 2,333
Third party revenues 566 498
9,963 9,437
========= =========
Recurring income includes all support services, SaaS and hosting income. Non-recurring income includes sales of new licenses, and income derived from installing those licenses including training, installation, and data translation. Third party revenues arise from the sale of third party software.
It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue.
No customer represented more than 10% of revenue of the Group.
6. Geographical analysis
The following table provides an analysis of the Group's revenue by geographic market.
The Board does not review the business from a geographical performance viewpoint and this analysis is provided for information only.
Revenue
2016 2015
GBP'000 GBP'000
UK 7,142 6,778
Europe 1,047 864
US 1,388 1,381
Australia 386 414
9,963 9,437
========= =========
Non-current assets by geographical location
2016 2015
GBP'000 GBP'000
UK 8,886 9,829
US 6 4
Australia 1 2
8,893 9,835
========= =========
7. Acquisition related and other one off items
2016 2015
GBP'000 GBP'000
Included within administrative
expenses:
Estimated change in fair
value of contingent consideration (48) (63)
Amortisation of acquisition
intangibles 379 379
Additional amortisation on
change of estimated useful
life of platform technology 720 -
--------- ---------
1,051 316
Included within financial
cost:
Unwinding of discount on
contingent consideration 15 28
1,066 344
========= =========
8. Tax (income) / expense
2016 2015
GBP'000 GBP'000
Current tax 178 191
Prior year adjustment -
current tax (91) (185)
Deferred tax (100) 22
Prior year adjustment -
deferred tax (50) (31)
Deferred tax re acquisition
intangibles (68) (68)
Prior year adjustment - deferred
tax re acquisition intangibles (3) (69)
--------- ---------
Tax (income) / expense for
the year (134) (140)
========= =========
Factors affecting the tax charge
for the year
Profit before tax 392 1,072
========= =========
UK rate of taxation 20% 20.25%
Profit before tax multiplied
by the UK rate of taxation 78 217
Effects of:
Overseas tax rates 31 46
Impact of deferred tax not
provided 13 (7)
Enhanced R&D relief (169) (131)
Disallowed expenses 31 14
Rate differences re current
tax and deferred tax 26 6
Prior year adjustments (144) (285)
Tax (income) / expense (134) (140)
========= =========
Deferred tax provided in the financial statements is as follows:
Group
2016 Movement 2015
GBP'000 GBP'000 GBP'000
Internally generated
intangible and
fixed assets 315 (152) 467
Provisions (9) 1 (10)
Acquisition
intangibles 478 (71) 549
---------
784 (222) 1,006
========= ========= =========
Group
2015 Movement 2014
GBP'000 GBP'000 GBP'000
Internally generated
intangible and
fixed assets 467 (6) 473
Provisions (10) 3 (7)
Acquisition
intangibles 549 (137) 686
---------
1,006 (146) 1,152
========= ========= =========
The UK corporation tax rate throughout the year was 20%. Deferred tax is provided in relation to the UK at rates of between 17% to 19% depending on when reversals are expected to occur. The tax credit is impacted by the higher rates of corporation tax payable in the US and Australia offset by the R&D tax credits available to both Dillistone Systems division and Voyager Software division and the reduction in the long term rate of corporation tax to 17% which has been used in the calculation of deferred tax. The release of prior year provisions relate in part to the agreement of the prior years' tax positions of UK companies and the utilisation of tax losses not previously recognised. The Group has gross tax losses and temporary timing differences of GBP369,000 (2015: GBP492,000) for which no deferred tax asset has been recognised as the timing of their utilisation is uncertain.
9. Earnings per share
2016 2016 2015 2015
Using Using
adjusted adjusted
operating operating
profit profit
Profit attributable GBP1,395,000 GBP526,0000 GBP1,419,000 GBP1,212,000
to ordinary shareholders
Weighted average
number of shares 19,668,021 19,668,021 19,547,754 19,547,754
Basic earnings per 7.10 2.68 pence 7.26 pence 6.20 pence
share pence
============= ============ ============= =============
Weighted average
number of shares
after dilution 20,082,096 20,082,096 20,209,339 20,209,339
Fully diluted earnings 6.95 2.62 pence 7.02 pence 6.00 pence
per share pence
============= ============ ============= =============
Reconciliation of basic to diluted average number of shares
2016 2015
Weighted average number
of shares (basic) 19,668,021 19,547,754
Effect of dilutive potential
ordinary shares - employee
share plans 414,075 661,585
Weighted average number of
shares after dilution 20,082,096 20,209,339
=========== ===========
There are 638,257 (2015: 353,257) share options not included in the above calculations
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAESIFWSEIL
(END) Dow Jones Newswires
April 26, 2017 02:01 ET (06:01 GMT)
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