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DWL Dowlais Group Plc

78.14
0.40 (0.51%)
Last Updated: 08:26:54
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Dowlais Group Plc LSE:DWL London Ordinary Share GB00BMWRZ071 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.40 0.51% 78.14 77.82 78.46 78.14 77.42 78.00 173,372 08:26:54
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Altitude Group PLC Interim Results (4655A)

29/09/2015 7:01am

UK Regulatory


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TIDMALT

RNS Number : 4655A

Altitude Group PLC

29 September 2015

Altitude Group plc

("Altitude" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2015

Altitude Group plc (AIM: ALT), the provider of innovative technology solutions for small to medium sized businesses, announces its interim results for the six month period ended 30 June 2015.

Highlights:

   --     Revenue increased to GBP3.14m (H1 2014: GBP3.04m) 
   --     Adjusted operating profit* GBP0.17m (H1 2014: GBP0.13m) 

-- Reduction in annualised overhead base of GBP1.5m through restructuring of Group in the period

-- Strong performance at The Trade Only National Show with solid improvement in profitability. Bookings for 2016 in line with our expectations

   --     Award of USA patent for the artworktool(tm) application in August 2015 

(* before amortisation of intangible assets, share-based payments and non-recurring administrative expenses and discontinued operations)

Executive Chairman, Richard Sowerby, commented: "The Group undertook a substantial restructuring process in the period including changes to the Board. We now have a much leaner and focused business with clear reporting lines and responsibilities under a centralised management structure led by a Group Managing Director. Our North American sales function now operates from a single location reducing duplication of cost and effort.

"Securing the patent in August 2015 for the artworktool(tm) solution and the processes it uses to help users create artwork online has been a tremendous achievement and is the result of three years of hard work and considerable cash investment. We now have a comprehensive suite of products to take forward using exclusive, unique and protected proprietary technology.

"The restructuring and the award of the patent ensure that the Group is in good shape. We have reduced our cost base by an annual GBP1.5m at the cost of just over GBP0.3m from which the benefit will start to flow in the second half of the year and beyond. Our focus going forward will be to capitalise on this hard work and drive shareholder value by leveraging the Company's existing technology products and continuing to build the successful exhibitions and publications business."

Enquiries:

 
 Altitude Group plc 
 Richard Sowerby (Executive Chairman)   Tel: 07525 220876 
 WH Ireland Limited (Nominated 
  Adviser and Broker) 
 Tim Feather                                Tel: 0113 394 
  Liam Gribben                                       6600 
 

Strategic update

Our fundamental strategy remains unchanged, as we focus our SaaS offerings largely on SMEs under the Customer Focus brand, both within the UK and increasingly within North America.

During the period, as part of the reorganisation we combined the sales and customer service operations for our Technologo and artworktool(tm) products under the Customer Focus brand. This integrated offering is attracting increased interest and, whilst the product enhances our overall technology offering, the possibilities for the technology are applicable to a much wider market and the opportunity is potentially very large for the Group.

We continue to make progress in the defined personalised product sector, as well as the closely related print reseller market with our integrated Web Store and CRM/ERP solution which enables businesses to operate in these niches for a subscription starting from a highly competitive $99 per month.

Our Exhibition and publications business continues to perform strongly. The January 2015 event showed another strong performance with increased profitability. Bookings for the 2016 show are in line with management expectations and we expect another good performance from this business in H1 2016 based on booked orders.

With the over 4,000 delegates that attend the main event in January each year all being involved in the print, promotional and personalised gift sectors, the potential to drive additional sales of our SaaS products in the UK remains strong and adds further value to the Group from the ability to engage so many customers with other products and services.

Structure

Throughout 2013 and 2014 the Group invested significantly in its overhead base and development creating a number of autonomous entities managed and controlled locally under a part time Group Executive Chairman. It became clear that this strategy was not only expensive but also distracting and inefficient. The changes made to the board in April 2015 were the catalyst for a wider and comprehensive restructuring exercise.

This process saw the appointment of Vicky Robinson as Group Managing Director providing a single point of Group management and control, and Peter Hallett as Non-Executive Director to improve our compliance with sound corporate governance principles, and my move to Executive Chairman.

The structural review led to our North American sales efforts being focused out of a single location in Costa Mesa California, the centralisation of many support functions predominantly in the UK, and the outsourcing of much of our development activity to low cost Eastern Europe.

These changes have reduced our annualised overhead cost base, excluding development and maintenance activities, by GBP1.5m comparing June 2015 with January 2015 run rates, dropping from GBP4.8m annualised to GBP3.3m.

Results

Whilst we reported sales growth from GBP3.04m in 2014 to GBP3.15m in 2015 and an increase in gross profit of GBP0.16m to GBP2.39m, the cost build up under the previous structure, and the costs incurred in the restructuring resulted in a net loss for the period of GBP0.7m compared to GBP0.2m for the same period last year.

Profit before amortisation, exceptional and non-recurring expenses, foreign exchange and share based payments was GBP0.17m for the period compared to a profit of GBP0.13m for the same period in 2014. This reflects the underlying result for the period before the costs of restructuring and the businesses that were discontinued in the period. Our combined US operations ended the period making a positive contribution to Group profits under this new structure.

The exceptional and non-recurring expenses of GBP0.56m include the cost of the restructuring exercise of GBP0.32m and non-recurring costs for the Canadian business of GBP0.24m. The non-recurring expenses compare to GBP0.19m for the six months to June 2014 and GBP0.43m for the full year which are included in administrative expenses.

In the UK, the 2015 Trade Only National Show in January was sold out again and delivered an improved profit contribution on 2014. The exhibition, now renamed as The Promotional Products Expo ("PPE"), continues to be the premier event in the promotional products industry calendar and we have pre-sold available space for January 2016 in line with our expectations.

The costs of restructuring had an impact on our cash balance in the period. We saw a cash outflow in the six months of GBP0.97m. Our business cycle means that we recognise the income and expenditure from the National Show in the first half, but the cash for that event is received in the second half of the year. In addition we have funded the majority of the costs of the restructuring in the period. Our operating cash flow before exceptional and non-recurring expenses was an outflow of GBP0.37m (H1 2014: GBP0.36m), but we are confident that levels of business and our cost savings will ensure that the business is adequately funded for the foreseeable future.

Product Development

Product development remains at the heart of our SaaS business. Our new structure benefitted from the appointment of a Chief Technology Officer in the period. We have ensured that we have continued to develop and enhance our products in a more cost effective manner using a mixture of in-house and outsourced developers.

In the period we spent a total of GBP0.5m in this area of which we have capitalised GBP0.12m. In the six month period ended 30 June 2014 we spent GBP0.54m with GBP0.22m capitalised across a number of products.

A significant achievement in this area has been the success in obtaining a patent for artworktool(tm) , a solution which enables users to easily create and share graphics and print-ready artwork using any device with a suitable browser. We believe this has revenue opportunities beyond the current focus of our key markets.

Outlook

We continue to drive forward a leaner and more focused structure with clear and concise reporting lines. In addition our product development team is delivering products of which the Board is confident will be a source of increasing shareholder value in 2016 and beyond.

Richard Sowerby

Executive Chairman

Consolidated income statement for the six month period ended 30 June 2015

 
                                                                       Retated 
                                                                       (note5) 
                                          Unaudited                  Unaudited 
                                            30 June   31 December      30 June 
                                               2015          2014         2014 
                                            GBP'000       GBP'000      GBP'000 
 Revenue - Continuing Operations              3,146         4,440        3,044 
 Cost of sales                                (753)         (971)        (812) 
                                         ----------  ------------  ----------- 
 Gross profit                                 2,393         3,469        2,232 
 Administrative costs                       (3,094)       (4,699)      (2,439) 
                                         ----------  ------------  ----------- 
 
 Operating (loss)/profit before 
  amortisation of intangible 
  assets, non-recurring administrative 
  expenses and share based 
  payment charges                               170       (1,035)          133 
 Amortisation of intangible 

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September 29, 2015 02:01 ET (06:01 GMT)

  assets                                      (239)         (478)        (238) 
 Exceptional and non-recurring 
  administrative expenses                     (562)             -            - 
 Foreign exchange differences                  (37)            26         (18) 
 Share based payment charges                   (33)         (168)         (84) 
---------------------------------------  ----------  ------------  ----------- 
 Operating loss                               (701)       (1,655)        (207) 
 Finance income                                   -            89           85 
 Loss before tax                              (701)       (1,566)        (122) 
 Taxation                                         -             -            - 
                                         ----------  ------------  ----------- 
 Loss attributable to the 
  equity shareholders of the 
  Company                                     (701)       (1,566)        (122) 
                                         ==========  ============  =========== 
 Loss earnings per ordinary 
  share attributable to the 
  equity shareholders of the 
  Company : 
 - Basic (pence)                             (1.63)        (3.64)       (0.28) 
 - Diluted (pence)                           (1.63)        (3.64)       (0.28) 
                                         ----------  ------------  ----------- 
 

Consolidated statement of changes in equity for the six month period ended 30 June 2015

 
                                  Share     Share   Retained 
                                Capital   Premium   Earnings 
                                GBP'000   GBP'000    GBP'000 
 
 At 1 January 2015                  172     6,254    (4,145) 
 Result for the period                -         -      (701) 
 Share based payment charges          -         -         33 
                               --------  --------  --------- 
 
 At 30 June 2015                    172     6,254    (4,813) 
                               --------  --------  --------- 
 

Consolidated balance sheet as at 30 June 2015

 
                                Unaudited                 Unaudited 
                                  30 June   31 December     30 June 
                                     2015          2014        2014 
                                  GBP'000       GBP'000     GBP'000 
 Non-current assets 
 Property, plant & equipment           79           105         144 
 Intangibles                        1,069         1,184       1,164 
 Goodwill                             564           564         564 
 Deferred tax                         244           426         426 
                               ----------  ------------  ---------- 
                                    2,298         2,279       2,298 
 Current assets 
 Trade and other receivables          479           787         479 
 Cash and cash equivalents          1,927         1,280       1,927 
                               ----------  ------------  ---------- 
 Total current assets               2,406         2,067       2,406 
                               ----------  ------------  ---------- 
 Total assets                       4,704         4,346       4,704 
                               ----------  ------------  ---------- 
 Current liabilities 
 Trade and other payables         (1,063)       (2,065)     (1,063) 
                               ----------  ------------  ---------- 
                                  (1,063)       (2,065)     (1,063) 
                               ----------  ------------  ---------- 
 Net assets                         3,641         2,281       3,641 
                               ----------  ------------  ---------- 
 
 Called up share capital              172           172         172 
 Share premium                      6,254         6,254       6,254 
 Retained earnings                (4,813)       (4,145)     (2,785) 
                               ----------  ------------  ---------- 
 Total equity                       1,613         2,281       3,641 
                               ----------  ------------  ---------- 
 

Consolidated cash flow statement for the six month period ended 30 June 2015

 
                                                                          Restated 
                                                                             (note 
                                           Unaudited                  5) Unaudited 
                                             30 June   31 December         30 June 
                                                2015          2014            2014 
                                             GBP'000       GBP'000         GBP'000 
 Operating activities 
 Loss for the period                           (701)       (1,566)           (122) 
 Amortisation of intangible assets               239           448             238 
 Depreciation                                     46           102              48 
 Net finance (credit)/expense                      -          (89)            (85) 
 Share based payment charges                      33           168              84 
                                          ----------  ------------  -------------- 
 Operating cash flow before changes 
  in working capital                           (382)         (907)             163 
 Movement in trade and other 
  receivables                                    415           222             530 
 Movement in trade and other 
  payables                                     (862)          (48)         (1,053) 
                                          ----------  ------------  -------------- 
 
 Operating cash flow before exceptional 
  and non-recurring expenses                   (367)         (733)           (360) 
 Cash flow from exceptional and 
  non-recurring charges                        (462)             -               - 
----------------------------------------  ----------  ------------  -------------- 
 
  Operating cash flow from operations          (829)         (733)           (360) 
 Interest received                                 -            89              85 
                                          ----------  ------------  -------------- 
 Net cash flow from operating 
  activities                                   (829)         (644)           (275) 
                                          ----------  ------------  -------------- 
 Investing activities 
 Purchase of plant and equipment                (21)          (51)            (33) 
 Purchase of intangible assets                 (125)         (475)           (215) 
 Repayment of loan note receivable                 -         2,000           2,000 
                                          ----------  ------------  -------------- 
 Net cash flow from investing 
  activities                                   (146)         1,474           1,752 
                                          ----------  ------------  -------------- 
 Net increase/(decrease) in cash 
  and cash equivalents                         (975)           830           1,477 
 Cash and cash equivalents at 
  the beginning of the period                  1,280           450             450 
                                          ----------  ------------  -------------- 
 Cash and cash equivalents at 
  the end of the period                          305         1,280           1,927 
                                          ----------  ------------  -------------- 
 

Notes to the half yearly financial information

Notes to the half yearly financial information

   1.       Basis of preparation 

This consolidated half yearly financial information for the half year ended 30 June 2015 has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2014.

The consolidated half yearly report was approved by the Board of directors on 28 September 2015.

The financial information contained in the interim report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for complete financial statements. Comparative figures for the year ended 31 December 2014 have been extracted from the statutory accounts for the year ended 31 December 2014 which have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying his report and did not contain a statement made under Section 498 (2) or (3) of the Companies Act 2006.

There were no recognised gains or losses in the six month period ended 30 June 2015 other than the profit for the period and therefore no statement of recognised income and expenses is presented.

The half-year results for the current and comparative period are unaudited.

   2.      Accounting policies 

The condensed, consolidated financial statements in this half-yearly financial report for the six months ended 30 June 2015 have been prepared using accounting policies and methods of computation consistent with those set out in the Annual Report and financial statements for the year ended 31 December 2014, except as described below. In preparing the condensed, consolidated financial statements, management are required to make accounting assumptions and estimates. The assumptions and estimation methods were consistent with those applied to the Annual Report and financial statements for the year ended 31 December 2014.

   3.      Operating Segments 

Under IFRS 8 "Operating Segments" the Group has determined that it has one reportable segment, Technology & Information.

IFRS 8 has been applied to aggregate operating segments on the grounds of similar economic characteristics. This position will be monitored as the Group develops.

   4.      Basic and diluted earnings per ordinary share 

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