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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Innovise | LSE:INNO | London | Ordinary Share | GB0030284854 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 11.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMINNO
7 June 2011
Innovise plc
("Innovise" or "the company")
Interim Results for the six months ended 31 March 2011
Chairman's and Chief Executive's statement
Highlights
* Turnover rose to GBP10.1 million from GBP7.9 million in H1 2010
* Adjusted* operating profit rose to GBP626,000 from GBP574,000 in H1 2010
* Software division of Expolink Europe Ltd and intellectual property assets
of Pivetal Ltd acquired.
* Adjusted excludes amortisation of intangibles and attributable tax.
Innovise is pleased to report a solid financial and operating performance
during the six months ended 31 March 2011. Against a stable general business
environment, we achieved an encouraging rate of sales growth and a modest
improvement to profits.
Turnover increased by more than 25% compared with the first half of 2010, which
included the impact of acquisitions. Adjusted operating profit before net
finance costs, tax and amortisation of intangibles also increased, from GBP
574,000 in the previous first half to GBP626,000.
During the period, we maintained our focus on efficient management of working
capital. As a result, we were able to convert over 100% of operating profit
into cash. Our cash reserves at 31 March 2011 increased to GBP1.2 million, from GBP
0.3 million at 31 March 2010. However, it is expected that some of this
improvement will unwind in the second half. Recurring sales also grew, from GBP
1.9 million in the previous first half to GBP2.3 million.
The company purchased 250,000 of its own ordinary shares of 1p each at 20p per
share during the period. The purchased shares are held as treasury shares.
We continue to seek strategic opportunities to enhance the range and quality of
our IT capabilities and solutions. Early in this interim period, we acquired
the software division of Expolink Europe Ltd and the intellectual property
assets of Pivetal Limited. Both businesses have been successfully integrated
into the group, and have traded in line with expectations during the first
half.
The Board of Innovise remains committed to growing its business and generating
shareholder value. After a detailed cost-benefit analysis, the Board is
proposing that the company's admission to AIM be cancelled. Shareholders will
be asked to vote on the proposal at a General Meeting to be convened later this
month, and an explanatory circular will be sent to them shortly.
The principal reasons for seeking admission to trading on AIM were to support
the company's growth strategy by providing access to capital and enabling it to
use shares as consideration for acquisitions. In arriving at the conclusion
that cancellation would be in the best interests of the company and
shareholders at this time, the directors took account of many factors and in
particular the following:
* The Board believes that the costs associated with maintaining the AIM
listing can be better deployed as additional working capital in the
business. We estimate that, in the last financial year, the direct and
indirect costs of the company's AIM listing amounted to in excess of GBP0.1
million. This estimate includes listing expenses, legal and adviser fees,
but excludes the considerable amount of senior executive time which is also
spent dealing with issues related to the listing.
* The AIM listing of shares in the company does not, in itself, currently
offer investors increased liquidity, marketability or scope to trade in
significant volumes or with frequency. With little trading volume
currently, the share price can fluctuate sharply following trades of small
numbers of shares. We do not believe that the liquidity situation would be
materially affected by cancellation.
* The relative lack of liquidity means that opportunities to use shares of
the company as consideration for acquisitions are very limited. The last
time Innovise used its shares to fund an acquisition was in 2009. All
subsequent acquisitions have been made from cash generated internally; in
each of these cases, the directors concluded that debt finance was
preferable to equity finance.
For these reasons, the Board is recommending that Innovise remains a public
company at this time but cancels its AIM listing.
We believe our positive results for this interim period demonstrate that
Innovise has the strategy, leadership and talented workforce to keep on
delivering value for its shareholders and capitalising on the opportunities
that exist within its niche markets.
Vin Murria Mike Taylor
Chairman Chief Executive Officer
7 June 2011
For further information contact:
Mike Taylor, Chief Executive Innovise plc 087 0626 0400
Tony Edwards, Finance Director Innovise plc 087 0626 0400
Edward Hutton, Nominated Northland Capital Partners 020 7796 8800
Advisor Limited
Ian Foster, Shareholder Wordsworth Communication Limited 077 3918 5050
Relations
Note to editors:
Innovise plc is a fast growing IT solutions company with two divisions, each of
which has its own management team and focused growth strategy.
Innovise ESM enables major organisations to transform complex IT environments,
resulting in improved performance and service. The division partners with the
leading global vendors to deliver best-in-class solutions to Fortune 500
businesses across a range of industries.
The Innovise Software & Solutions division consists of two complementary units:
Innovise Software's products are extensively used to improve efficiency within
the facilities management, support services and public sectors, while Innovise
Solutions provides customised and highly cost-effective managed services
including remote database administration, infrastructure management and
Microsoft solutions.
Innovise has offices in Brierley Hill, Slough, Southampton, London and Mumbai.
For more information, please visit www.innovise.com.
Unaudited consolidated income statement
for the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months Year
6 months ended
31 March ended
ended 2010
GBP 30 September
31 March 2010
GBP
2011
GBP
CONTINUING OPERATIONS Notes
REVENUE 10,060,089 7,935,133 17,059,212
Cost of sales (5,752,189) (4,864,656) (10,198,241)
GROSS PROFIT 4,307,900 3,070,477 6,860,971
Administrative expenses (3,944,898) (2,713,229) (6,085,945)
OPERATING PROFIT BEFORE 625,530 574,496 1,209,522
AMORTISATION OF INTANGIBLE
ASSETS
Amortisation of intangible (262,528) (217,248) (434,496)
assets
OPERATING PROFIT 363,002 357,248 775,026
Finance income 342 1,326 1,481
Finance costs (93,538) (95,447) (193,013)
PROFIT BEFORE TAX 269,806 263,127 583,494
Tax (47,040) (61,981) (126,090)
PROFIT FOR THE PERIOD 222,766 201,146 457,404
ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
EARNINGS PER SHARE
Basic earnings per share 2 0.6p 0.5p 1.2p
Diluted earnings per share 2 0.6p 0.5p 1.1p
Unaudited consolidated statement of comprehensive income
for the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months 6 months Year
ended ended
ended
31 March 31 March
2011 30 September
2010
GBP 2010
GBP
GBP
Profit for the period 222,766 201,146 457,404
Other comprehensive income:
Increase in value of derivative 9,000 19,000 38,000
financial instrument taken to
hedging reserve
Total comprehensive income for 231,766 220,146 495,404
the period
Unaudited consolidated balance sheet
as at 31 March 2011
Unaudited Unaudited Audited
As at As at
As at 31 March 30
2010 September
31 March GBP 2010
GBP
2011
GBP
ASSETS
NON-CURRENT ASSETS
Goodwill 12,830,099 12,347,305 12,452,114
Other intangible assets 1,570,473 1,450,234 1,232,986
Property, plant and equipment 462,043 397,461 451,883
Investments in subsidiaries 51 51 51
Deferred tax asset 47,278 - 47,278
14,909,944 14,195,051 14,184,312
CURRENT ASSETS
Inventories 73,543 6,527 35,756
Trade and other receivables 5,514,672 4,050,333 4,292,697
Cash and cash equivalents 1,181,077 313,323 118,723
6,769,292 4,370,183 4,447,176
TOTAL ASSETS 21,679,236 18,565,234 18,631,488
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (6,922,553) (4,253,140) (4,507,731)
Current tax liabilities (272,751) (438,255) (210,314)
Convertible loan stock (975,346) - (198,200)
Other loans (494,170) (500,000) (500,000)
(8,664,820) (5,191,395) (5,416,245)
NET CURRENT LIABILITIES (1,895,528) (821,212) (969,069)
NON-CURRENT LIABILITIES
Convertible loan stock - (1,091,947) (935,457)
Other loans (1,098,234) (855,971) (612,571)
Deferred tax liabilities (438,720) (404,561) (372,680)
Provisions (30,578) (47,000) (44,417)
Derivative financial - (28,000) (9,000)
instrument
(1,567,532) (2,427,479) (1,974,125)
TOTAL LIABILITIES (10,232,352) (7,618,874) (7,390,370)
NET ASSETS 11,446,884 10,946,360 11,241,118
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS OF THE PARENT
Called up share capital 2,266,007 2,253,507 2,253,507
Treasury shares (50,000) - -
Shares to be issued - 500,000 500,000
Equity reserve 19,421 19,421 19,421
Share premium account 1,083,917 1,083,917 1,083,917
Capital redemption reserve 29,054 29,054 29,054
Merger reserve 6,412,140 5,924,640 5,924,640
Reverse acquisition reserve (918,040) (918,040) (918,040)
Retained earnings 2,604,385 2,081,861 2,357,619
Hedging reserve - (28,000) (9,000)
TOTAL EQUITY 11,446,884 10,946,360 11,241,118
Unaudited consolidated statement of changes in equity
for the six months ended 31 March 2011
Share Treasury Shares to Share Capital Merger Other Retained Hedging Total
capital shares be issued premium redemption reserve reserves earnings reserve equity
reserve
GBP GBP GBP GBP GBP GBP GBP GBP
At 30 2,253,507 - 500,000 1,083,917 29,054 5,924,640 (898,619) 2,357,619 (9,000) 11,241,118
September
2010
Comprehensive - - - - - - - 222,766 9,000 231,766
income
In respect of 12,500 - (500,000) - - 487,500 - - - -
acquisition
of
subsidiaries
Share - (50,000) - - - - - - - (50,000)
repurchase
Share-based - - - - - - - 24,000 - 24,000
payments
At 31 March 2,266,007 (50,000) - 1,083,917 29,054 6,412,140 (898,619) 2,604,385 - 11,446,884
2011
At 30 2,241,007 1,000,000 1,083,917 29,054 5,437,140 (898,619) 1,868,715 (47,000) 10,714,214
September
2009
Comprehensive - - - - - - 201,146 19,000 220,146
income
In respect of 12,500 (500,000) - - 487,500 - - - -
acquisition
of
subsidiaries
Share-based - - - - - - 12,000 - 12,000
payments
At 31 March 2,253,507 500,000 1,083,917 29,054 5,924,640 (898,619) 2,081,861 (28,000) 10,946,360
2010
At 30 2,241,007 1,000,000 1,083,917 29,054 5,437,140 (898,619) 1,868,715 (47,000) 10,714,214
September
2009
Comprehensive - - - - - - 457,404 38,000 (495,404
income
In respect of 12,500 (500,000) - - 487,500 - - - -
acquisition
of
subsidiaries
Share-based - - - - - - 31,500 - 31,500
payments
At 30 2,253,507 500,000 1,083,917 29,054 5,924,640 (898,619) 2,357,619 (9,000) 11,241,118
September
2010
Unaudited consolidated cash flow statement
for the six months ended 31 March 2011
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March 30 September
2011 2010 2010
GBP GBP GBP
Operating profit 363,002 357,248 775,026
Depreciation of property, plant and 93,160 90,592 180,594
equipment
Amortisation of intangible assets 262,528 217,248 434,496
Share-based payment 24,000 12,000 31,500
Operating cash flows before 742,690 677,088 1,421,616
movement
in working capital
(Increase)/decrease in inventories (29,482) 25,082 (4,147)
Increase in receivables (906,197) (1,067,461) (1,224,793)
Increase in payables 1,716,599 908,522 1,098,072
Decrease in provisions (13,839) (55,968) (58,551)
Cash generated by operations 1,509,771 487,263 1,232,197
Tax paid (net of refunds) (86,563) (249,777) (637,574)
Net cash flow from operating 1,423,208 237,486 594,623
activities
Investing activities
Interest received 342 1,326 1,481
Purchase of property, plant and (64,320) (155,130) (299,554)
equipment
Acquisition of subsidiaries (671,486) (155,881) (285,881)
Cash balances of acquired 196,626 - 21,788
subsidiaries
Net cash used in investing (538,838) (309,685) (562,166)
activities
Financing activities
Repayment of borrowings (450,000) (250,000) (500,000)
Interest paid (22,016) (44,937) (94,193)
Share repurchase (50,000) - -
New loans raised 700,000 - -
Net cash from financing activities 177,984 (294,937) (594,193)
Net increase/(decrease) in cash and 1,062,354 (367,136) (561,736)
cash equivalents
Cash and cash equivalents at 118,723 680,459 680,459
beginning
of period
Cash and cash equivalents at end of 1,181,077 313,323 118,723
period
Notes to the unaudited interim report
for the six months ended 31 March 2011
1. BASIS OF PREPARATION
Innovise plc is a company incorporated in the United Kingdom under the
Companies Act 2006. Its registered office address is Hellier House, Wychbury
Court, Two Woods Lane, Brierley Hill, DY5 1TA.
The condensed consolidated interim financial statements of the company for the
six months ended 31 March 2011 comprise the company and its subsidiaries
(together referred to as "the group"). These interim statements do not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The interim financial information has otherwise been prepared using the
same accounting policies, presentation, method of computation and estimation
techniques as are expected to be adopted in the group financial statements for
the year ending 30 September 2011 and which were adopted in the audited group
financial statements for the year ended 30 September 2010 .
The financial information for the year ended 30 September 2010 has been
extracted from the statutory accounts for that period. The auditors have
reported on the statutory accounts for the year ended 30 September 2010 and
their report was unqualified and did not contain a statement under section 498
(2) (accounting records or returns inadequate or accounts or directors'
remuneration report not agreeing with records and returns), or Section 498 (3)
(failure to obtain necessary information and explanations). A copy of those
financial statements has been filed with the Registrar of Companies.
The condensed consolidated interim financial statements have been prepared
using accounting policies consistent with International Financial Reporting
standards (IFRSs) as adopted in the EU. While the financial figures included in
this half yearly report have been computed in accordance with IFRSs as adopted
in the EU applicable to interim periods, this half yearly report does not
contain sufficient information to constitute an interim financial report as
that term is defined in IAS 34.
The condensed consolidated interim financial statements are presented in pounds
sterling because that is the currency of the primary economic environment in
which the group operates, and were authorised for issue on 7 June 2011.
Further copies of the unaudited interim report can be obtained from the
registered office during normal business hours. The report is also available on
the company's website, www.innovise.com.
2. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings for the period attributable to equity holders of the parent
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 March
2011 31 March 30 September
2010
GBP 2010
GBP
GBP
Earnings for the purpose of basic 222,766 201,146 457,404
and diluted earnings per share
being net profit attributable to
equity holders of the parent
Number of shares
Weighted average number of ordinary 39,054,548 38,381,471 38,767,140
shares for the purpose of basic
earnings per share
Effect of dilutive potential
ordinary shares:
Share options and warrants 2,677 12,877 -
Contingently issued shares on 1,105,769 2,019,231 1,633,562
acquisition of subsidiary
Weighted average number of ordinary 40,162,995 40,413,579 40,400,702
shares for the purpose of diluted
earnings per share
Adjusted earnings per share
Adjusted earnings per share calculated before deducting amortisation of
intangible assets and the tax attributable thereto are presented below in order
to assist in an understanding of the underlying performance of the business.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 March 31 March
2011 2010 30 September
GBP GBP 2010
GBP
Adjusted earnings
Earnings for the purposes of basic 222,766 201,146 457,404
earnings
per share being net profit for
continuing operations
Amortisation of intangible assets 262,528 217,248 434,496
Tax credit attributable to (71,960) (57,960) (115,920)
amortisation
Tax credit attributable to change (30,000) - -
in tax rate
in respect of intangible asset
timing differences
Earnings for the purposes of 383,334 360,434 775,980
adjusted basic and diluted earnings
per share
Adjusted basic earnings per share 1.0p 0.9p 2.0p
Adjusted diluted earnings per share 1.0p 0.9p 1.9p
The number of shares for the purpose of calculating the adjusted earnings per
share figures is as set out on the previous page.
3. ACQUISITIONS
During the period, the company issued 1,250,000 shares in respect of deferred
consideration for the acquisition of Infrasolve Limited. These shares have been
reflected in equity at a price of 40p, being their fair value at the date of
acquisition.
During the period, the company paid GBP50,000 in cash in respect of deferred
consideration to the vendors of RapidHost, which was acquired in July 2009.
On 4 November 2010, the group acquired the software business of Expolink Europe
Limited. Goodwill arising on the acquisition of the business of Expolink
Software has been capitalised. The purchase of Expolink Software has been
accounted for by the purchase method of accounting. The fair value of net
assets and liabilities acquired are set out below:
Fair value
GBP
Intangible assets 600,000
Plant and equipment 39,000
Stock 8,305
Accrued income 8,499
Trade and other receivables 315,778
Cash and cash equivalents 196,626
Deferred income (568,208)
Deferred tax liability (168,000)
Net assets acquired 432,000
Goodwill 378,000
810,000
Total consideration payable satisfied by:
Cash on completion 600,000
Deferred consideration payable in cash 210,000
Total consideration 810,000
The deferred consideration is payable in cash on 4 November 2012. The cash
consideration was financed by a loan note of GBP500,000 issued on 4 November and
redeemable in 24 months.
4. POST BALANCE SHEET EVENT
On 1 April 2011, the company repurchased 194,105 shares at 17 pence each.
END
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