Share Name Share Symbol Market Type Share ISIN Share Description
Netstore Plc LSE:NES London Ordinary Share GB0004123609 ORD 20P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 31.50p 0.00p 0.00p - - - 0.00 05:00:10
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services - - - - 54.37

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DateSubject
24/2/2006
11:14
arfurwales: So good I posted them twice! Oops. I think NES are a little under the Radar really - I don't expect a lot of press coverage for example. I feel a bit of momentum growing here - in the results, not the share price though. Happy to hold....
30/12/2004
17:05
jaykaytee: bit of a leap in the share price over the past couple of days. perhaps this is based on the directors' recent purchases??
21/9/2004
22:23
houseprices: Spcecks, Ex-punter at the HC, trades a lot! Still has contacts there. Johnnyknight, they are not happy with them, the share price is telling you that. They won't come out with any info' either so it will drift all the way down, nobody is going to buy it.
21/9/2004
10:13
spcecks: if that is true about HC its allready in the share price.
06/9/2004
14:29
justjim37: deadly, I agree. Strong results which don't appear to be built into the share price and the pond life marks it down. I'm in for 9,350 Looks a good recovery play to me.
08/3/2004
16:49
jewelsy: I brought at 17.2 sold at 42 something. So yes I made a very tidy profit Thanks. I really wish I had the confidence to stay longer. But can you honestly say that Netstore share price will rise significantly in the future! Who are going to be the customers of the future??? where is Netstore going after the current contracts run out? As for fireworks! well what about the nose dive from £1.70 per share? When you compare Netstore to what they were then to what they are at this moment WHY is the share price so low and dropping?
01/3/2004
15:51
cfb2: For your information, Robbie Burns has sold his shareholding in Netstore. Apologies for being off-topic, but you might be interested in a little experiment that I did... I kept a note of the buys that went through straight after he announced his purchase on his website. After he announced his sell today it was followed by 8 trades that matched the number of trades bought when he did. So it leads me to conclude that 8 people blindly follow the trades on his website. Unless he decides to deal in very small cap companies, this isn't going to have the slightest difference on a share price. CFB
17/2/2004
07:09
sue helen: RNS Number:4780V NetStore PLC 17 February 2004 Immediate release 17 February 2004 Netstore plc Interim Results for the six months ended 31 December 2003 "Operating Profits Achieved for the first time in the Second Quarter." "Board and Senior Management Changes." Netstore plc ("Netstore"), a leading UK Enterprise Application Service Provider, announces Interim results for the six months ended 31 December 2003. Highlights: * Turnover increased by 70% to #10.6m compared with the same period in the previous year (2002:#6.2m) and by 33% compared with the previous six months of trading * Operating profits were achieved for the first time, in the second quarter; although there was an operating loss for the period of #0.2m compared with a loss of #1.5m in the previous six months of trading (2002: a loss of #1.7m) (before charges for goodwill) * Operationally cash positive throughout the six month period; operating cash in flow of #1.4m * Cash balances of #12.2m compared with #12.5m at 30 June 2003 (2002: #15.8m) * Acquisition of the managed service business ofEMS Global completed in December 2003; trading profitably post acquisition * Restructuring and strengthening of the Board and senior management Paul Barry-Walsh, Chairman and Chief Executive Officer, commenting on the results said: "This has been an important trading period for us, having achieved an operating profit for the first time in the second quarter. These profits were dependent on an unusually high proportion of consultancy income; nonetheless we have passed a significant milestone. The acquisition of the managed service business of EMS Global was particularly pleasing as 80% of its turnover is managed service under long-term contract and it's now trading profitably." On prospects he added: "The high level of revenue visibility and the stability of our cost base give a great deal of confidence that short-term targets will be met. We have now proved that we have a profitable business model and have strengthened our team to gear up for growth. I am confident about our future prospects." For further information, please contact: Netstore plc (NES) 0870 3006600 Paul Barry-Walsh, Chairman & CEO paul.barry-walsh@netstore.net Neil Lloyd, CFO neil.lloyd@netstore.net Buchanan Communications 020 7466 5000 Charles Ryland charlesr@buchanan.uk.com Catherine Miles catherinem@buchanan.uk.com Evolution Beeson Gregory 020 7071 4300 Michael Brennan michael.brennan@evbg.com Bobbie Hilliam bobbie.hilliam@evbg.com I am very pleased to announce the results of Netstore plc for the six months ended 31 December 2003; a period when we have continued to make impressive progress; notably achieving operating profits for the first time in our history in the second quarter of the period. Results Turnover Turnover increased by 70% to #10.6m, in line with our expectations, compared with the same period last year (2002: #6.2m) and by 33% compared with the six months ended 30 June 2003. The amount of new business signed in the six month period, measured as first year contract value, was #4.1m, which was below expectation due to the reported shortfall in the first quarter; new sales in the second quarter were in line with expectation, with only RedRock, our mobile software subsidiary, performing behind our expectation. Income from managed IT services under long-term contracts continues to make up the major part of our business. However, and as anticipated, during the period the mix of managed service revenues was approximately 48% as we completed major implementation phases of the Hackney Council and Housing Corporation contracts, which contained consultancy, training and product revenues. Longer term and for the full year, we expect the sales mix of the business to trend back towards a 60% proportion of managed services. The managed service business of EMS Global was acquired late December; therefore its contribution to turnover was not material to the period. Gross Margin Gross margin for the period was slightly better than we anticipated at 49% compared with 46% for the six months to 30 June 2003 (2002: 50%). We had expected that the higher proportion of implementation revenues in the period would have a more dilutive effect on gross margins, as much of the implementation is delivered by third parties at lower margin to us; however, this was countered by improved revenue recognition from the contract elements delivered by Netstore. In addition, capital expenditure was lower than expected through the period; hence depreciation charges were lower than planned. Overhead Costs Selling and distribution costs were as expected at #3.5m compared with #3.4m for the six months ended 30 June 2003 (2002: #3.3m). There waslittle one off cost during the period, except for approximately #0.1m relating to the relocation of the majority of our operational resource to Gateshead, which occurred in the first quarter; this reflects the stability of our business and its largely fixed overhead cost. Likewise, our administrative costs were in line with expectation at #1.9m compared with #1.6m for the six months ended 30 June 2003 (2002: #1.4m). However, we did incur some exceptional cost in relation to the re-location of our offices within Bracknell and the renewal of our BS7799 accreditation, totalling approximately #0.1m. In the six months to 31 December 2003, we incurred #1.1m of overhead cost in relation to NetConnect, which was acquired in March 2003 and therefore not in the comparative figures; disregarding NetConnect's costs, overhead costs fell by 9% compared with the same period last year. Operating loss, therefore, was slightly better than expected at #0.2m compared with a loss of #1.5m for thesix months ended 30 June 2003 (2002:a loss of #1.7m) (before charges for goodwill); significantly, and for the first time in our trading history we made operating profits, in the three months to 31 December 2003. Operating profits were only small and during the profitable second quarter we recognised a larger amount of consultancy and third party licence income than would normally be expected, largely due to the completion of another stage of the Hackney Council financial management system project. However, we see reasonable trading prospects ahead and we are focussed on continuing to trade profitably. EBITDA were #0.3m compared with #0.1m for the six months ended 30 June 2003 (2002: loss of #0.3m). Cash Flow and Cash Balances Operations generated a cash inflow of #1.4m (2002: #1.6m) and the total cash movement was an out flow of only #0.3m, after making the final tranche payment of #0.8m for the NetConnect acquisition and the initial payment of #0.3m for the EMS Global Managed Service acquisition. The only other major non-operating cash movement during the period was capital expenditure of #0.5m; considerably lower than we anticipated. Cash balances were #12.2m at 31 December 2003 compared with #12.1m at 30 September 2003 and #12.5m at 30 June 2003 (2002: #15.8m). Disposals As part of our continuing corporate strategy to concentrate on solutions for medium to large organisations, and following on from the disposal of our SME hosted Exchange business last year, we have also disposed of two other non-core business units. During November 2003, we disposed of a small ISP business acquired as part of the NetConnect acquisition and during December 2003 we disposed of our SME On Line Backup business to BT; although we continue to manage the infrastructure, with BT managing customer engagement. The latter disposal is important in that it further consolidates our On Line Backup service within the BT channel. The reduction in contracted turnover from these disposals is approximately #0.4m per annum and the effect on operating profit is negligible. During February 2004, we also disposed of RedRock Technologies, our loss-making mobile solutions software subsidiary, to management. RedRock was acquired as part of a now discarded strategy of more than three years ago that focussed on selling commodity solutions to SMEs and it has performed under our expectations since acquisition. Consideration was nominal and disposal costs including writing off remaining goodwill totalled #0.4m and have been provided for in these results; budgeted turnover for the second half reduces by #0.5m as a result of the disposal yet operating profits will be increased by approximately #0.1m. Acquisition During December 2003, we completed the acquisition of the sales contracts and all the infrastructure assets of the UK based managed service business of EMS Global, an internet security company. EMS Global is a New Zealand based software company that launched a managed internet security business in London in October 2001 utilising its own Cortex software to deliver secure browsing, mail, file transfer, productivity control and remote connection services to large corporate customers; principallyin partnership with BT and NTL. The business has approximately #2.5m of turnover under contract with an annual value of approximately #1.0m; 80% of the revenues are recurring under long-term contracts. The initial consideration paid was #0.3m, with an additional consideration of not more than #0.2m payable in March 2004. Further consideration of not more than #0.4m may become payable in June 2004, dependent upon the achievement of some very challenging profit targets. Our strategy is togrow revenue both through new customers and by providing new services to existing customers. The acquisition of the Cortex service business provides a new service that sits well alongside our other infrastructure services, On Line Backup and Managed Firewall, and can be sold across our current customer base. The customers acquired fit Netstore's target market of larger organisations and the substantial infrastructure investment made under EMS Global's ownership provides significant excess capacity, with little further investment by Netstore. The Cortex service is currently trading profitably and we expect it to make a small positive contribution during the current period after re-organisation costs of approximately #0.1m. Board andManagement Changes In a separate statement issued today, we have announced that we will be separating the roles of Chairman and Chief Executive Officer ("CEO"), with Neil Lloyd, our current Chief Financial Officer ("CFO"), taking over the role of CEO on 31 March 2004. I will be remaining in the capacity of Executive Chairman, reducing my time commitment to the Company to three days per week. This move is part of a planned succession policy and brings us into line with best corporate governance practice. Sugi Sugunasingha joins the Company to replace Neil Lloyd as CFO and brings with him a wealth of experience in financial management gained within the IT industry. David Blundell continues as Chief Operating Officer with increased responsibility for acquisitions and business development through new partners. We have also strengthened our management team with the addition of Robert Hokin as VP of Sales, replacing our previous head of sales who left in November 2003; Colin Henderson, in addition to responsibility for Technical Operations, now manages our Professional Services teams and new service development as VP of Operations, and Tom Salkield now manages all of our security business, including the recently acquired Cortex business, as Director of Security Services. I wish them all well in their new and enlarged roles. I believe we have put in place a management team capable of supporting and generating further growth. Current Trading and Prospects Current trading is progressing well for the current and final quarter. Income from deferred revenue and contracted renewals, plus revenue from other projects signed but not yet completed and billed, will total approximately #18m in the current year. Costs remain under tight control with no plans to increase materially the current level of overheads in the second half. The high level of revenue visibility and the stability of our cost base give a great deal of confidence that short-term targets will be met; the continuing success of our corporate strategy and strengthening of our management team place us well for future growth and sustained profitability. We can look forward with confidence. I am delighted that the improvement in the tradingof Netstore continues and, once again, thanks are owed to our staff for their commitment and contribution to a milestone trading period for us. Paul Barry-Walsh 17 February 2004 GROUP PROFIT AND LOSS ACCOUNT For the six months ended 31 December 2003 Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 December 31 December 30 June 2003 2002 2003 Note #'000 #'000 #'000 TURNOVER Continuing operations 10,602 6,224 12,497 Acquisitions - - 1,700 10,602 6,224 14,197 Cost of sales (5,368) (3,108) (7,433) GROSS PROFIT 5,234 3,116 6,764 Selling and distribution costs (3,535) (3,292) (6,700) Administrative expenses (1,893) (1,424) (3,044) Amortisation of goodwill (230) (475) (210) Charges arising from share price (14) (84) (198) movements OPERATING LOSS (438) (2,159) (3,388) Continuing operations (438) (2,159) (3,608) Acquisitions - - 220 Exceptional goodwill write off (374) - (2,362) Interest receivable and similar 168297 541 income Interest payable and similar (28) (18) (56) charges LOSS ON ORDINARY ACTIVITIES BEFORE (672) (1,880) (5,265) TAXATION Tax on loss on ordinary activities - - 148 LOSS FOR THE PERIOD (672) (1,880) (5,117) Loss per share - basic and diluted 2 (0.70) (1.96) (5.33) (pence) All operations are continuing. RECONCILIATION OF OPERATING LOSS TO EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION ("EBITDA") #'000 #'000 #'000 Operating Loss (438) (2,159) (3,388) Depreciation 474 1,258 2,729 Amortisation of goodwill 230 475 210 Charges arising from share 14 84 198 price movements EBITDA 280 (342) (251) GROUP BALANCE SHEET at 31 December 2003 Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 December 31 December 30 June 2003 2002 2003 #'000 #'000 #'000 FIXED ASSETS Intangible assets 3,553 2,809 3,729 Tangible assets 3,786 4,144 3,730 Investments 90 80 80 7,429 7,033 7,539 CURRENT ASSETS Debtors 6,505 2,518 4,671 Cash at bank and in hand 12,240 15,851 12,523 18,745 18,369 17,194 CREDITORS: amounts falling due within oneyear Deferred income 5,712 4,126 4,424 Other creditors 6,020 2,842 5,129 11,732 6,968 9,553 NET CURRENT ASSETS 7,013 11,401 7,641 14,442 18,434 15,180 TOTAL ASSETS LESS CURRENT LIABILITIES CREDITORS: amounts falling due after 1,055 1,326 1,182 more than one year PROVISIONS FOR LIABILITIES AND CHARGES 694 597 694 NET ASSETS 12,693 16,511 13,304 CAPITAL AND RESERVES Called up share capital 19,459 19,207 19,260 Share premium account 34,706 34,689 34,706 Merger reserve (9,927) (9,744) (9,789) Profit andloss account (31,545) (27,641) (30,873) SHAREHOLDERS' FUNDS - equity interests 12,693 16,511 13,304 GROUP STATEMENT OF CASH FLOWS For the six months ended 31 December 2003 Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 December 31 December 30 June 2003 2002 2003 Note #'000 #'000 #'000 NET CASH INFLOW FROM OPERATING 1,397 1,606 115 ACTIVITIES 3 RETURN ON INVESTMENTS AND 139 279 485 SERVICING OF FINANCE TAXATION - - 148 CAPITAL EXPENDITURE AND FINANCIAL (541) (2,328) (3,177) INVESTMENT ACQUISITIONS AND DISPOSALS (1,194) - (1,225) NET CASH OUTFLOW BEFORE (199) (443) (3,654) MANAGEMENT OF LIQUID RESOURCES AND FINANCING MANAGEMENT OF LIQUID RESOURCES 1,168 (579) 3,810 FINANCING (84) 887 770 INCREASE / (DECREASE) IN CASH 885 (135) 926 NOTES For the 6 months ended 31 December 2003 1. BASIS OF PREPARATION The financial information contained in this Interim report has been prepared under the historical cost convention and on the basis of the accounting policies set out in the Group's statutory accounts for the twelve months ended 30 June 2003. The financial information contained in this report does not constitute statutory accounts as defined by section 240 of the Companies Act 1985. Statutory accounts for the twelve months ended 30 June 2003 incorporating an unqualified audit report have been filed with the Registrar of Companies. The financial information for the six months ended 31 December 2003 and 31 December 2002 has not been reviewed or audited by the auditors. 2. LOSS PER SHARE The basic and diluted loss per share has been calculated on the following weighted average number of shares in issue during the period: 31 December 2003 96,276,631 31 December 2002 96,032,606 30 June 2003 96,048,476 3. NOTES TO STATEMENT OF CASH FLOWS (a) Reconciliation of operating loss to net cash inflow from operating activities UnauditedUnaudited Audited 6 months to 6 months to 12 months to 31 December 31 December 30 June 2003 2002 2003 #'000 #'000 #'000 Operating loss (438) (2,159) (3,388) Depreciation 474 1,258 2,729 Amortisation of goodwill 230 475 210 Increase in deferred income 1,288 1,064 132 (Increase) / decrease in debtors (1,834) 1,495 946 Increase / (decrease) in creditors 1,677 (604) (668) Increase in provisions - 84 181 Profit on disposal of fixed assets - (7) (27) Net cash inflow from operating activities 1,397 1,606 115 (b) Reconciliation of net cash flow to movement in net funds Unaudited Unaudited Audited 6 months to 6 months to 12 months to 31 December 31 December 30 June 2003 2002 2003 #'000 #'000 #'000 Increase / (decrease) in cash 885 (135) 926 Cash flow from (decrease) / increase in short (1,168) 579 (3,810) term deposits Cash flow from decrease in debt and finance 145 113 256 leases New long term loans - (1,000) (1,000) Movement in net funds (138) (443) (3,628) Net funds at beginning of period 11,064 14,692 14,692 Net funds at end of period 10,926 14,249 11,064 (c) Analysis of net funds Finance lease Cash and and hire cash deposits purchase Short term Long term agreements loans loans Total #'000 #'000 #'000 #'000 #'000 At 1 January 2003 15,851 (521) (133) (948) 14,249 Cash flow (2,938) 37 - 33 (2,868) ------ ----- ---- ---- ------ At 1 April 2003 12,913 (484) (133) (915) 11,381 Cash flow (390) 40 - 33 (317) ------ ----- ---- ---- ------ At 1 July 2003 12,523 (444) (133) (882) 11,064 Cash flow (435) 52 - 34 (349) ------ ----- ---- ---- ------ At 1 October 2003 12,088 (392) (133) (848) 10,715 Cash flow 152 26 - 33 211 ------ ----- ---- ---- ------ At 31 December 2003 12,240 (366) (133) (815) 10,926 4. COPIES AVAILABLE Copies of this statement are being sent to all shareholders. Copies are also available at the Registered Office of the Company: Netstore plc, Atrium Court, The Ring, Bracknell, Berkshire, RG12 1BW. The Interim results were approved by the Board of Directors on 16 February 2004. This information is provided by RNS The company news service from the London Stock Exchange END IR GGGMZVVKGDZM
03/9/2003
07:09
pacman88: Results out. Run rate of £24M based on Q4's £6M and £12M in the bank. Cash cash-flow break even on operations for full year and net cash outflow was on capex and acquisition of Netconnect. Company is ramping. With the leverage inherent in such businesses, much of the revenue growth falls to the bottom line. RNS Number:2956P NetStore PLC 03 September 2003 Immediate release 3 September 2003 Netstore plc Unaudited Results for the year ended 30 June 2003 "Strong Trading Continues - Record Results" Netstore plc ("Netstore"), a leading provider of managed IT solutions, announces record results for the year ended 30 June 2003. Highlights: *Turnover increased by 114% to #14.2m (2002:#6.6m) *Two record contract wins during the year: Housing Corporation and Hackney - #5.9m and #6.5m respectively in revenue over five years *Record new sales in final quarter of #5.9m (first year contract value); well ahead of expectation *Operating losses reduced substantially to #(3.0)m from #(7.5)m in the previous year (before charges for share options and goodwill) *EBITDA positive through the second half with EBITDA losses for the year reduced to #(0.3)m from #(5.6)m in the previous year (before charges for share options) *Cash balances at #12.5m (2002: #15.4m) *Acquisition of NetConnect successfully completed; profitable since acquisition Paul Barry-Walsh, Chairman and Chief Executive, commenting on the results said: "Netstore continues to make significant progress towards sustainable profitability. We have passed a number of milestones during the year including the signing of two #6m contracts, our largest ever, and, importantly, achieving a positive EBITDA position in the second half. The keys to our success during the year have been a corporate strategy focussing on larger organisations; a keen eye on cost reduction and a dedication to first class customer service to ensure the continuity of income. Our key priority has been achieved: to build a sustainable platform from which to grow rapidly a valuable, managed IT service business." On future prospects he added: "Looking ahead, we have good visibility of revenue, with approximately #14.0m flowing forward from contracts signed in the year just ended and before; costs and cash remain under close control and we have a coherent business strategy that is delivering. The trading environment for IT remains challenging; therefore we have set ourselves suitably realistic targets for the current year. We have good reason to look forward with confidence." For further information, please contact: Netstore plc (NES) 01344 444300 Paul Barry-Walsh, Chairman paul.barry-walsh@netstore.net ------------------------------- Neil Lloyd, CFO neil.lloyd@netstore.net ------------------------- Buchanan Communications 020 7466 5000 Charles Ryland Chairman's Statement I am very pleased to announce record results for the year ended 30 June 2003, which include approximately four months contribution from NetConnect Limited ("NetConnect"), which was acquired during the year. Following a year of great change, the year to 30 June 2003 was a period of stability and concentration on our strategy of selling managed IT services into medium to large organisations within a limited number of key vertical markets. Results Turnover for the year was in line with our expectations increasing by 114% to #14.2m compared with #6.6m for the year ended 30 June 2002. The amount of new business signed in the year, measured as the first twelve months contract revenue, totalled #11.2m and in the final quarter was a record at #5.9m; both ahead of our expectation. Our most significant contract wins during the year were with the Housing Corporation for multiple services including hosted Microsoft Exchange and with Hackney Council for financial management systems, worth #5.9m and #6.5m over five years respectively. Given the long implementation phase of such contracts, only #0.3m of the Housing Corporation contract was recognised in turnover during the year and nothing was recognised from the Hackney contract. We also renewed our major contract with Cisco for another two years, providing On Line Backup services to Cisco employees throughout EMEA. Income from managed IT services under long-term contracts makes up the major part of our business, continuing to represent approximately 70% of total turnover in the year; the balance of turnover being made up of consultancy, training and product revenues. As we are now focussing on larger more complex managed service contracts, often there is a higher proportion of set up revenues (licences, hardware and third party consultancy) in advance of the managed revenue stream that distorts our sales mix and dilutes gross margins in the short-term; as is generally the case for this sort of large contract business. Our recent acquisition, NetConnect, contributed #1.7m to turnover during the year ended 30 June 2003 of which approximately 30% was recurring revenues under contract. Excluding NetConnect, the existing business grew by 88%. Annualised recurring revenues at 30 June 2003 stood at approximately #11.0m, which represents approximately 45% growth in recurring revenue over the year, with #1.5m attributable to the NetConnect acquisition. The combination of contractual income, deals signed still in implementation and consultancy projects not yet complete provide approximately #14.0m of revenue to be recognised in the year to 30 June 2004. The underlying trend of managed service gross margin continued upwards during the year as new managed service contracts increased the utilisation of our infrastructure and operational overhead; as a result, gross margin for the year ended 30 June 2003 was as planned at 48% (2002: 44%) . The longer-term trend will be for our margin to continue upwards as managed service revenues build. However, this is subject to short-term fluctuations during the implementation phases of larger contracts, where lower margin pass through revenues are recorded, and as new services are launched, which require incremental capital investment and resource. This will be a factor during the first quarter of the current year as we work on the implementation of both the Housing Corporation and Hackney Council contracts. Gross margin from NetConnect was 54% for the four months to 30 June 2003. Selling and distribution costs were #6.7m (2002: #6.3m), after paying extra commissions and bonuses of #0.2m relating to new sales over-performance, particularly in the final quarter, although very little of this over-performance has been recognised in the year due to the length of implementation and our deferred model. Also during the final quarter, we closed one of our data centres as we consolidated our operations in our Gateshead and Heathrow data centres; saving approximately #0.2m per annum but leading to a fixed asset write down of #0.3m. Administrative expenses were in line with expectation at #3.0m and significantly reduced compared with #4.2m in the year ended 30 June 2002. Savings in administrative expenses came from reductions in property costs and management headcount. Total overheads (selling and distribution costs plus administrative expenses) were 7% lower than the previous year at # 9.7m (2002: #10.5m) despite incurring four months of overhead from NetConnect totalling #0.7m. Excluding NetConnect, total overheads reduced by 14% in a year when the existing business grew recognised revenues by 88%. As a result of the extra commissions and bonuses paid on sales not recognised in the year and the fixed asset write off , operating loss was slightly more than expected at #(3.0)m, although greatly reduced compared with #(7.5)m for the previous year (both prior to adjustments for share options charges and goodwill write off). EBITDA loss for the year of # (0.3)m was also greatly reduced compared with #(5.6)m for the year ended 30 June 2002 and we were EBITDA positive through the second half. However, the extra commissions paid did turn an expectation for the year of breakeven at EBITDA level into a small EBITDA loss. Exceptional Goodwill Write Off We acquired RedRock Software, an Ofex listed company, in December 2001 giving rise to goodwill on consolidation of #3.2m. Since that date the market value of similar companies have declined sharply and RedRock has performed significantly under our initial expectations. As a result, during the course of the year, the Board decided to write down the goodwill value of this investment by #2.4m. Cash Flow and Cash Resources Operations generated a cash inflow of #0.1m (2002: #(6.3)m outflow), as a result of the greatly improved trading detailed above and improved cash collections. The major non-operating cash movements during the year were capital expenditure of #3.2m: #1.5m to service new sales contracts, including the Cisco renewal and the Housing Corporation set up, and #1.7m on the purchase of our Gateshead data centre, part funded by a mortgage of #1.0m. We also spent #1.5m on the acquisition of NetConnect; the final amount payable of up to #0.8m will not be determined until completion of the earn out period in September 2003. Cash balances were #12.5m at 30 June 2003 compared with #15.4m at 30 June 2002. Acquisition Netstore's strategy is to grow revenue both through adding new customers and by providing new services to existing customers; new services that we may either develop ourselves, provide with partners or acquire. On 13 March 2003, Netstore acquired NetConnect, an internet security company; established in 1987, based in London and Cambridge and offering managed services, consultancy and design services, system integration, and training and support in the general field of internet security. The acquisition provides a number of new services from a profitable platform that Netstore can sell across its current customer base and the majority of NetConnect's existing customer base is larger organisations; Netstore's target market. The initial consideration paid on completion for the purchase of NetConnect was #0.8m, with a further #0.8m paid on 19 June 2003 based on the net asset value on completion. The final payment to take total consideration to a maximum of #2.3m is payable during September 2003 and is dependent on the profit performance of the company. For the financial year ending 31 March 2002, NetConnect reported turnover of #6.9m, net losses of #1.5m and had net liabilities of #0.6m, including #1.9m of deferred income under contract. A pre-condition of the acquisition was that management complete certain actions to reduce the overhead burden on the business. As a result of these savings and continued steady sales, NetConnect has traded profitably since acquisition. We are very encouraged by the acquisition of NetConnect and particularly by its positive contribution to the year's results. Current Trading and Prospects Trading has been steady since the end of the year, in what traditionally is our weakest trading period. We have signed approximately #1.0m of new business (first year contract value). With our focus on larger more complex contracts, sales cycles have extended and we now expect to sign fewer but larger contracts. The trading environment for IT in general remains tough; accordingly, we have set ourselves suitably realistic targets for the current year. Our deferred recognition model underpins our expectations going forward with approximately #14.0m of contracted income and our customer proposition is compelling, particularly as the continuing economic situation forces organisations to examine the costs of providing their business operations either in-house or through more traditional outsourcing options. Also, following on from our successful acquisition of NetConnect, we will continue to look for acquisition opportunities, focusing on those that will fill out our managed service portfolio and have an established customer base for managed solutions amongst medium to large organisations. The improvement in Netstore continues for a second consecutive year and we have good reason to look forward to the business turning profitable in the near future. Once again, a particular debt of thanks is owed to our staff for their contribution to the substantial progress made by the Company in another record trading year. Paul Barry-Walsh 03 September 2003 GROUP PROFIT AND LOSS ACCOUNT For the year ended 30 June 2003 12 months to 12 months to 30 June 30 June 2003 2002 Note #'000 #'000 Turnover Continuing operations 12,497 6,644 Acquisitions 1,700 - --------- --------- 14,197 6,644 Cost of sales (7,433) (3,717) --------- --------- Gross profit 6,764 2,927 Selling and distribution costs (6,700) (6,295) Administrative expenses (3,044) (4,152) Amortisation of goodwill (210) (509) (Charges) /Credits arising from share (198) 115 price movements --------- --------- OPERATING LOSS (3,388) (7,914) --------- --------- Continuing operations (3,608) - Acquisitions 220 - --------- --------- Exceptional goodwill write off (2,362) - Interest receivable and similar income 541 984 Interest payable and similar charges (56) (14) --------- --------- LOSS ON ORDINARY ACTIVITIES BEFORE (5,265) (6,944) TAXATION Tax on loss on ordinary activities 2 148 - --------- --------- LOSS for the PERIOD (5,117) (6,944) ========= ========= Loss per share - basic and diluted 3 (5.33) (7.51) (pence) All operations are continuing. Reconciliation of operating loss to earnings before interest, tax, depreciation and amortisation ("Ebitda") #'000 #'000 Operating Loss (3,388) (7,914) Depreciation 2,729 1,917 Amortisation of goodwill 210 509 Charges/ (Credits) arising from share price movements 198 (115) --------- --------- EBITDA (251) (5,603) ========= ========= NB: Operating loss is considered before charges/(credits) arising from share price movements GROUP BALANCE SHEET at 30 June 2003 30 June 30 June 2003 2002 #'000 #'000 FIXED ASSETS Intangible assets 3,729 3,279 Tangible assets 3,730 3,093 Investments 80 59 ---------- ---------- 7,539 6,431 ========== ========== Current Assets Debtors 4,671 4,013 Cash at bank and in hand 12,523 15,407 ---------- ---------- 17,194 19,420 Creditors: amounts falling due within one year Deferred income 4,424 3,062 Other creditors 5,113 3,372 ---------- ---------- 9,537 6,434 ---------- ---------- NET CURRENT ASSETS 7,657 12,986 ---------- ---------- TOTAL ASSETS LESS CURRENT LIABILITIES 15,196 19,417 Creditors: amounts falling due after more than one 1,198 509 year Provisions for liabilities and charges 694 513 ---------- ---------- NET ASSETS 13,304 18,395 ========== ========== CAPITAL and RESERVES Called up share capital 19,261 19,207 Share premium account 34,706 34,689 Merger reserve (9,789) (9,744) Profit and loss account (30,874) (25,757) ---------- ---------- SHAREHOLDERS' FUNDS - equity interests 13,304 18,395 ========== ========== GROUP STATEMENT OF CASH FLOWS For the year ended 30 June 2003 12 months to 12 months to 30 June 30 June 2003 2002 Note #'000 #'000 NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES 4 115 (6,275) RETURN ON INVESTMENTS AND SERVICING OF 485 970 FINANCE TAXATION 148 - CAPITAL EXPENDITURE AND FINANCIAL (3,177) (2,829) INVESTMENT ACQUISITIONS AND DISPOSALS (1,225) (1,397) NET CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (3,654) (9,531 -------- -------- MANAGEMENT OF LIQUID RESOURCES 3,810 10,025 FINANCING 770 (138) INCREASE IN CASH 926 356 ======== ======== NOTES For the year ended 30 June 2003 1. BASIS OF PREPARATION The financial information contained in this Preliminary report has been prepared using accounting policies and practices consistent with those adopted in the 2002 Annual Report and Accounts and have not yet been reported on by the company's auditors. The financial information contained in this report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The audited results for the year ended 30 June 2002 are an abridged version of the company's Annual Report and Accounts which have been filed with the Registrar of Companies and on which the auditors gave an unqualified audit report. 2. Taxation Taxation relates to the receipt of research and development tax credits from the Inland Revenue. 3. Loss per share The basic and diluted loss per share has been calculated on a weighted average number of 96,048,476 shares in issue during the year (30 June 2002: 92,434,524). 4. Notes to statement of cash flows (a) Reconciliation of operating loss to net cash inflow / (outflow) from operating activities 12 months to 12 months to 30 June 2003 30 June 2002 #'000 #'000 Operating loss (3,388) (7,914) Depreciation 2,729 1,917 Amortisation of goodwill 210 509 Increase in deferred income 132 1,616 Decrease/(increase) in debtors 946 (2,439) Decrease in creditors (668) (35) Increase/(decrease) in provisions 181 (115) (Profit)/loss on disposal of fixed assets (27) 186 ------- ------- Net cash inflow / (outflow) from operating 115 (6,275) activities ====== ======= (b) Reconciliation of net cash flow to movement in net funds 12 months to 12 months to 30 June 2003 30 June 2002 #'000 #'000 Increase in cash 926 356 Cash flow from decrease in short term deposits (3,810) (10,025) Cash flow from decrease in debt and finance 256 143 leases Loans and finance leases acquired - (181) New finance leases - (600) New long term loans (1,000) - ----------- ----------- Movement in net funds (3,628) (10,307) Net funds at beginning of period 14,691 24,998 ---------- ----------- Net funds at end of period 11,063 14,691 ========== =========== This information is provided by RNS The company news service from the London Stock Exchange
19/6/2003
23:08
pacman88: 596 words 19 June 2003 Citywire English (c) 2003 Citywire.co.uk. All Rights Reserved. A trio of deals with directors buying at environmental and safety technology group Halma and financial services software provider Intelligent Environments but selling at application service provider Netstore. * At Halma non-executive director Andrew Walker has made his first foray into the market since his appointment to the board last month. Walker followed up Tuesday's results with the purchase of 35,714 shares at 140p each, a total cost of £50,000. Walker moved in following results which showed a dip in pre-tax profits which was expected and was accompanied by bullish predictions from its chief executive of a return to growth this year. Sales were flat at £267 million and profits slipped by 4% to £46.5 million but such is the cash generative qualities of the £511 million company that it still increased its dividend by 10% to 5.8p. In difficult markets Halma performed resiliently and has grown its business in the US which at 31% of sales is now its biggest market. Chief executive Stephen O'Shea told Citywire the strength of Halma's products to be launched this year gives the board confidence in a return to profitability. Halma's shares shed 1.5p to 138.5p yesterday after rising to a 2003-high of 140p on Tuesday. * At Netstore two non-executives in the form of deputy chairman Jeff Maynard and his fellow non-executive Michael Jackson have both sold down their holdings. Maynard was the biggest seller, offloading 1 million shares at 28p each on Tuesday, banking £280,000 in the process to leave him with 8.275 million shares or 8.6% of the £27.5 million company. Jackson sold 109,806 shares to boost his bank account by a little more than £30,000, he has 883,334 shares left. The sales failed to dent investor confidence in Netstore and its share price closed last night 0.75p better off at 29.25p, its highest closing price since mid-2001. Maynard and Jackson's sales came immediately after the company announced its largest single contract win to date worth £6.5 million over five years. Netstore will provide application services and change management consultancy to the London Borough of Hackney as prime contractor. This eclipses another recent contract with the Housing Corporation which was worth £5.9 million over five years. The revenues from the Hackney contract will not come through in time to bolster Netstore's performance in the year to 30 June 2003. * Clive Richards, the non-executive chairman of Intelligent Environments, a provider of financial services software, splashed out £31,250 on Wednesday to add 500,000 shares to his holding at 6.25p per share. The purchase boosted Richards' holding to 16.95 million shares or 12.2% of the £8.8 million company. It also gave Netstore's share price a boost, it gained 0.875p yesterday to close at 7.25p, a 12 month high. After experiencing tough trading conditions last year as financial services groups across the globe tightened their belts IE had to raise £2.4 million recently, it also closed its US operations. This led to a fall in first half turnover but also a fall in annual costs from £5 million to £3 million. In Europe it managed to increase its sales by 11% to £2.6 million. Document CWIRE00020030619dz6j00003
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