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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vale Int | LSE:VIG | London | Ordinary Share | VGG9330F1018 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0853B
VI Group PLC
06 April 2006
RNS Release
Embargoed until 7am on 6 April 2006
VI Group plc
("VI Group" or "the Company")
Preliminary results for the year to 31 December 2005
VI Group plc, international suppliers of CAD/CAM software, announces preliminary
results for the year to 31 December 2005, another year of turnover growth and
increased earnings.
Financial and business highlights:
* EBITDA increased 44% to #757,000 (2004: #526,000)
* Turnover rose 5% to #10.2m (2004: #9.7m)
* Operating profit of #134,000 (2004: Loss of #189,000) after goodwill
amortisation of #422,000 (2004: #518,000)
* Cash balances at the year end were #1.1m (2004: #1.2m)
* Excellent growth of 97% in China following the opening of Shanghai
office in May
* Strong initial contribution from SMIRTware Inc. which added #255,000 to
revenues and #91,000 to operating profit in the four months since
acquisition
* Strong investment in R&D to broaden the product range
Don Babbs, Chief Executive of VI Group, said:
"Much has been achieved in 2005 and we are pleased to have produced a strong set
of results. We introduced a number of substantial changes to the Group,
including accelerated product expansions, a US acquisition, new territory
investments in China, and also a restructuring in the US. It is encouraging that
we have been able to maintain our focus on increasing earnings in the midst of
such widespread change."
Enquiries, please contact:
Don Babbs Justin Lewis
Chief Executive Corporate Synergy Plc
VI Group plc 020 7448 4400
01453 732 900
Julie Randall Neil Boom/Dave Pettet
Finance Director Gresham PR Ltd.
VI Group plc 020 7404 9000
01453 732 900
CHAIRMAN'S STATEMENT
I am pleased to report that VI Group's financial results for 2005 represent a
significant improvement in the performance of the Company. We are achieving our
goal of containing overheads and boosting earnings, while expanding global
distribution and product ranges. Moreover, the results have been achieved while
maintaining our investment in research and development.
Group turnover for the year increased by 5% to #10.2m (2004: #9.7m). Earnings
before interest, tax, depreciation and amortisation (EBITDA) rose 44% to
#757,000 (2004: #526,000).
The trend to shift manufacturing to Asia has continued among our client base.
Consequently, our Asian operations produced the strongest relative performances.
In China, the opening of our representative office in Shanghai last year was a
great success. Sales in the region have nearly doubled, more than exceeding our
budgetary expectations. Given that our successes in the region historically had
been largely limited to Hong Kong and Taiwan, the strong results were due both
to our management effort in China, and the rapidly growing market.
In North America, as part of our drive for increased profitability, we
restructured our sales operations to achieve both cost savings and extended
geographical coverage.
In August, we completed the purchase of SMIRTware Inc. in the US. The
integration of SMIRTware is running ahead of expectations, and has been
fundamental in enabling us to broaden our product range and extend our presence
in the upper tiers of the automotive industry.
The excellent work of Jerry Hicks and his team at SMIRTware has already provided
a first class integrated solution to the problems of large metal die stampings
for car components such as doors and other panels. SMIRTware solutions are
extensively installed by Ford, Chrysler and General Motors in North America as
well as Fiat and Volvo in Europe. Since the acquisition, we have already
completed our first large sale in Japan and produced new SMIRTware-based
software revenue in Poland and Italy.
The European market, while stable, showed some signs of timidity as firms
continue to investigate the advantage of manufacturing overseas. Nevertheless,
our continental European partners and offices still produced positive growth,
which we believe was at the expense of less focused competitors.
We now have new products in the plastic injection, metal stamping, multi-axis
machining and mould sectors demanding specialist process and application
knowledge. Development work on the core products has also accelerated and we
expect this to produce further competitive advantage in the coming years.
Naturally, our staff have been instrumental in both the development and
distribution of the new product ranges and, as always, remain enthusiastic and
loyal to the Company.
Company change has not been restricted to our new products and distribution
channels. We have also accelerated our Group administrative plans by preparing
to meet the new International Financial Reporting Standards a year ahead of the
mandatory date for AIM- listed companies. We expect these changes to be in place
in time for the 2006 results. Likewise, we are finalising our dividend policy in
anticipation of achieving distributable reserves. We hope this will offer
encouragement to our loyal shareholders.
Outlook
Much has been achieved in 2005 and we are pleased to have produced a strong set
of results. We introduced a number of substantial changes to the Group,
including accelerated product expansions, a US acquisition, new territory
investments in China, and also a restructuring in the US. I am encouraged that
focus has been maintained on increasing profits in the midst of such widespread
change.
We anticipate more of the same type of performance improvements during 2006. Our
strategy is to take a greater share of the mature markets and expand in the
emerging ones. We are also continuing to seek earnings enhancing acquisitions.
These could be made in any of our established territories and we will be
identifying profitable companies that can either add to our product ranges or
increase distribution. To some extent, the success of this strategy depends on
the continuing stability in world markets. However, current indications are that
further improvements will be achieved, particularly in the second half of the
year.
Stephen Palframan
Chairman
6th April 2006
OPERATING AND FINANCIAL REVIEW
The directors set out in this section their analysis of business. We do so
voluntarily and do not seek to comply in full with the Accounting Standard
Board's Statement "Operating and Financial Review" issued in January 2003.
In the last two years VI Group has concentrated on producing increased earnings
and containing costs. We are therefore pleased to report another dynamic year
with a 44% rise in EBITDA to #757,000. The Company also continues its long run
of consecutive revenue rises with turnover increasing by #0.5m to #10.2m,
representing growth of 5% compared to 2004.
Sales in Japan grew strongly, up 14% in an enlivened market. Notable sales
increases averaging 10% were registered by the areas covered by the independent
dealers and was helped by manufacturing continuing to be relocated to emerging
markets.
Continental European sales have always been the mainstay of VI and we managed a
2% growth despite difficult trading conditions. The focus on profits led us to
restructure our US operations in mid 2005 by converting our Michigan-based
direct sales office to a centre providing dealer support and marketing for the
North American network. The change to dealer operations will produce significant
cost savings but will reduce reported 2005 revenues by the equivalent of 3% of
turnover. Backed by aggressive marketing, in North America we are focused on
securing new distribution in the key mould and die areas and expanding our
overall market presence.
Recurring revenues as provided by software maintenance agreements now account
for more than 25% of total revenues compared to just over 5% at the time of the
Company's flotation. This recurring revenue stream gives comfort and is further
evidence of increasing customer satisfaction and loyalty.
The 2005 product mix and increased in-house developments provide an increase in
gross margin from #8.7m or 89% in 2004, to 90% of revenues and #9.2m in 2005.
New Operations
We opened an office in Shanghai, China in May 2005 to capitalise on this
rapidly-growing and increasingly important market. Even though we have not yet
had a full year to report, we are delighted that sales volumes almost doubled
and now represent just over 5% of total revenues. The Group expects to make
further investments in 2006 to achieve growth rates in line with the market
expansion.
The Company bought SMIRTware Inc. based near Detroit at the end of August 2005
for #0.6m. The initial results have been encouraging with a contribution of
#0.3m to revenues and nearly #0.1m to the Group operating profit for the four
month period since it was acquired. The two Detroit offices have been
successfully merged and integration with our existing products is well advanced.
We also appointed new dealers in Poland, Taiwan and South America during the
year to further our presence in some important emerging markets.
Operating Expenses
Our continuing focus on cost control meant that the increase in total operating
expenses was held at 2%. This small increase was even more remarkable given the
inevitable cost additions as a result of a new office in China and the SMIRTware
operation. This has only been possible through the reduction of overheads and
combination of some offices in Italy and the UK.
Product Development and Other Operating Income
VI Group's product development activities have encompassed both new and existing
areas of Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM) for
mould and die users. The product range is being extended to provide further end
to end solutions within specific sectors. By way of example, the SMIRTware
software will, in conjunction with VISI-Series, extend the full range of design,
machining and viewing capabilities to both existing and new users. These new and
integrated facilities translate into extra productivity for the sector.
Product development costs increased slightly from #1.3m in 2004 to #1.4m in 2005
reflecting the early part of our R&D investment programme. Further investments
are planned in 2006 and 2007 to provide the next generation of automation
benefits to the mould and die industry.
Taxation and Earnings per Share
The Company made earnings before interest, tax, depreciation and amortisation
(EBITDA) of #757,000, an increase of 44% on the previous year (2004: #526,000).
It also recorded a pre-tax profit of #77,000 (2004: loss of #259,000). The
Company incurred a tax charge of #231,000 and a post tax loss of #154,000
halving that of the previous year (2004: loss of #312,000). A substantial
portion of the tax charge arises in Italy and most of this is the Italian
regional tax on business activities. In the light of this, it should be
emphasised that Italy makes a significant contribution to Group revenues and
grant income. The basic and fully diluted loss per share is 0.41p (2004: loss
per share of 0.84p).
Cash flow and net funds
Cash inflow from operations was #0.7m compared to an inflow of #1m in 2004. The
2004 income included a grant which was not repeated in 2005. Excluding last
year's grant, cash inflow in 2005 would have been #0.1m higher than 2004. Cash
balances at the year end were #1.1m (2004: #1.2m), with #0.4m of short-term
borrowings (2004: #0.8m), giving a net cash figure of #0.7m (2004: #0.4m).
International Financial Reporting Standards (IFRS)
The Company plans to adopt IFRS in its consolidated financial statements for the
year commencing 1 January 2006. The implementation of IFRS is a major change and
we have resources addressing the issues involved. Adoption of IFRS will not only
lead to changes in the presentation of the primary statements and related notes,
but will also have an impact on the treatment of the following:
* Goodwill and other intangibles, under which goodwill is no longer amortised
but will be subject to an annual impairment assessment.
* Some development projects will be capitalised and amortised through the profit
and loss account over their estimated useful economic lives.
* Share based payments, where the fair value of the award is charged as an
expense in the profit and loss account.
The Group has undertaken a specific project to review the transition to IFRS and
to determine the impact of these adjustments on reported results. The first set
of results the Group will publish under IFRS will be the interim statement for
the six months ending 30 June 2006. The first annual report and accounts will be
for the year ending 31 December 2006. The Group will also be restating its
comparative results for the six months ended 30 June 2005 and the year ended 31
December 2005 in accordance with IFRS.
Don Babbs
Chief Executive
6th April 2006
Consolidated profit and loss account
Year ended 31 December
2005 2004
#'000 #'000
Turnover
Continuing operations 9,937 9,698
Acquisitions 255 -
---------- ---------
10,192 9,698
Cost of sales (980) (1,023)
---------- ---------
Gross profit 9,212 8,675
Selling expenses (4,694) (4,858)
Administrative expenses (2,410) (2,180)
Product development (1,446) (1,339)
Net other operating income 95 228
---------- ---------
Earnings before interest, tax, depreciation
and amortisation ('EBITDA') 757 526
Depreciation (201) (197)
Amortisation of goodwill and other intangible assets (422) (518)
---------- ---------
Operating profit / (loss)
Continuing operations 43 (189)
Acquisitions 91 -
---------- ---------
134 (189)
Interest receivable and similar income 25 19
Interest payable and similar charges (82) (89)
---------- ---------
Profit/(loss) on ordinary activities before taxation 77 (259)
Taxation on profit on ordinary activities (231) (53)
---------- ---------
Loss on ordinary activities after taxation (154) (312)
---------- ---------
Basic and diluted loss per share (0.41)p (0.84)p
Consolidated statement of total recognised gains and losses
Year ended 31 December
2005 2004
#'000 #'000
Loss for the financial year (154) (312)
Exchange movements (14) (62)
--------- ----------
Total recognised losses (168) (374)
--------- ----------
Consolidated balance sheet
Year ended 31 December
2005 2004
#'000 #'000
Fixed assets:
Intangible fixed assets 1,589 1,269
Tangible fixed assets 433 451
----------- ----------
2,022 1,720
----------- ----------
Current assets:
Stock 21 48
Debtors 5,623 5,711
Cash at bank and in hand 1,077 1,176
----------- ----------
6,721 6,935
Creditors; amounts falling due within one year (3,481) (3,708)
----------- ----------
Net current assets 3,240 3,227
----------- ----------
Total assets less current liabilities 5,262 4,947
Creditors; amounts falling due after more than one
year (688) (252)
Provisions for liabilities and charges (415) (366)
----------- ----------
4,159 4,329
----------- ----------
Capital and reserves
Called up share capital 186 186
Share premium account 5,860 5,860
Other reserves 8 10
Profit and loss account (1,895) (1,727)
----------- ----------
Equity shareholders' funds 4,159 4,329
----------- ----------
Consolidated cash flow statement
Year ended 31 December
2005 2004
#'000 #'000
Cash inflow from operating activities 743 1,000
Returns on investments and servicing of finance:
Interest received 25 19
Interest and other financing costs paid (80) (89)
----------- ----------
Net cash outflow from returns on
investments and servicing of finance (55) (70)
----------- ----------
Taxation:
Taxes paid (258) (207)
Capital expenditure and financial investment:
Purchase of tangible fixed assets (120) (101)
Purchase of intangible fixed assets (26) (24)
Sale of tangible fixed assets 59 6
----------- ----------
Net cash outflow from capital expenditure
and financial investments (87) (119)
----------- ----------
Acquisitions and disposals:
Payments in respect of acquisitions (502) (28)
Net cash acquired with subsidiary 10 -
----------- ----------
Net cash outflow from acquisitions and disposals (492) (28)
----------- ----------
Cash flows from financing activities:
New loan 465 181
Loans repaid - (25)
Repayment of finance leases (99) (24)
----------- ----------
Net cash flow from financing activities 366 132
----------- ----------
Net increase in cash 217 708
Cash at beginning of year 407 (243)
Exchange movements 28 (58)
Cash at the end of the year 652 407
Cash
Cash at bank and in hand 1,077 1,176
Bank overdrafts (425) (769)
----------- ----------
652 407
----------- ----------
Year ended 31 December
2005 2004
#'000 #'000
Increase in cash in the year 217 708
Cash outflow from change in
debt and finance leasing (473) (174)
----------- ----------
Change in net funds in the year resulting from cash
flow (256) 534
Exchange movements 32 (18)
Net funds at beginning of year 88 (428)
----------- ----------
Net funds/(debts) at end of year (136) 88
----------- ----------
1. Dividend
The directors do not recommend the payment of a dividend.
2. Financial information
The financial information contained in this preliminary announcement of audited
results does not constitute the group's statutory accounts for the year ended 31
December 2005. The financial information has been prepared using consistent
financial policies. The accounts for the year ended 31 December 2005 will be
delivered to the Registrar of Companies.
The statutory accounts for the year ended 31 December 2005 have been reported on
by the company's auditors; the reports on these accounts were unqualified and
they did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
The annual report will be sent to shareholders in due course. Copies of this
announcement and the full statutory accounts can be obtained , when available,
free of charge, from the Company's office at The Mill, Brimscombe Port,
Brimscombe, Stroud, Gloucestershire GL5 2QG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DELFBQZBEBBE
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