World Careers Network PLC Preliminary Results (5468O)

TIDMWOR

RNS Number : 5468O

World Careers Network PLC

08 November 2016

8 November 2016

PRELIMINARY ANNOUNCEMENT OF THE AUDITED RESULTS OF

WORLD CAREERS NETWORK PLC

WORLD CAREERS NETWORK PLC

Chairman's Statement

I am pleased to present the annual accounts of World Careers Network plc ("WCN" or the "Company"), which show the results of the Company for the year to 31 July 2016.

Financial review

Our profit for the year of GBP1,382,896 is significantly higher than last year (GBP1,197,879) due to a gain of over GBP400,000 as a result of the fall in the value of the GBP against the US$ in the run up to and following the EU Referendum which resulted in a substantial increase in the value of our US$ bank and debtor balances at the beginning of the year and our sales invoiced during the year. But for the decline in the value of the GBPsterling our profits would have been nearly 20% down on last year.

The changes in Key Performance Indicators between the financial years 2015/2016 and 2014/2015 were as follows:

 
                                  2015/16   2014/15 
                                      GBP       GBP 
 
 Sales per employee                86,298    80,168 
 Operating profit per employee     13,670    11,785 
 

The average headcount in 2015/16 remained unchanged from the previous year at 98 hence the improvements in the KPIs as a result of the increased year on year sales and profits which benefitted from the fall in the value of the GBPsterling referred to above.

The Board will be seeking at the Annual General Meeting the renewal of the authority granted last year to make market purchases of ordinary shares, within the usual limits for a listed company. In assessing whether in practice to use this authority, the Board will take into account all relevant factors including the effect on earnings per share and assets per share ratios and other benefits to shareholders.

Dividends

The directors are pleased to recommend the payment of a dividend of 3.5p per share, which is the same as that paid in respect of the previous year. This dividend will be subject to the approval of shareholders at the Annual General Meeting to be held at 5-7 Bridgeworks, The Crescent, London SW19 8DR at 10.30 am, on 15 December 2016, and, if approved, will be payable on 16 December 2016 to shareholders on the register as at 25 November 2016

Operating review

Sales increased by GBP600,696 compared with last year of which GBP187,000 was due to the fall in the value of the GBPsterling to which I referred above. The residual increase of around 5% reflected projects which started in the previous year coming fully online and the addition of some new clients.in the current year. Support Fees underpinned the increase in sales while fees from change requests and implementations fell slightly as large scale implementations completed.

At the same time, costs rose compared to the previous year, predominantly in the second half of the year as many of the investment decisions - particularly additional marketing spend, bolstering our resources in the areas of security and hosting infrastructure maintenance, delivery, account management and UK and US sales - took effect.

Principal risks and uncertainties

Commercial and operational risk

Competitive pressure and economic instability is a continuing if not growing risk for the Company. The Company manages this risk by developing leading edge products capable of driving significant transformation and value within our clients, through high levels of customer service, by managing resource levels and pursuing opportunities for continuous improvement.

The business is dependent upon clients' ability to safely access data held on our servers. In order to ensure that this is not affected by a breakdown in power supplies or by other physical hazards our servers are housed offsite in secure facilities on the premises of a specialist provider of such facilities. Third party security experts are also regularly engaged to advise on data security.

Financial risk

The main risks arising from the company's activities are currency risk and credit risk. These are monitored by the Board of directors and were not considered to be significant at the balance sheet date.

Outlook

The heavy investments in the second half of last year in the areas I mentioned above have continued into the current year and our cost base is now running considerably higher than last year.

These investments will undoubtedly have a material impact on our profitability both in the current year and for the foreseeable future since the increased costs come first and are more certain than the resulting revenue streams. This is exacerbated both by the increased scale of some of our projects making growth more erratic and by the general economic uncertainty following the Brexit vote.

Simultaneously looking after our clients and ensuring they are happy, implementing new clients, developing and managing the adoption of new innovations, developing the team & on-boarding new team members, and continuously looking for ways to improve is very challenging. I would like to thank the team at WCN for your tremendous efforts. Our success is down to your hard work and skill.

Charles EH Hipps

Chairman, World Careers Network Plc

Date 7 November 2016

consolidated income statement

For the Year Ended 31 July 2016

 
                                        2016        2015 
                                         GBP         GBP 
 
 Revenue                           8,457,202   7,856,506 
 
 Total administrative expenses     7,117,511   6,701,553 
                                   _________   _________ 
 
 Operating profit                  1,339,691   1,154,953 
 
 Finance income                       43,205      42,926 
                                   _________   _________ 
 
 Profit on ordinary activities 
  before taxation                  1,382,896   1,197,879 
 
 Income tax                          277,201     262,500 
                                   _________   _________ 
 
 Profit for the year               1,105,695     935,379 
                                   _________   _________ 
 
 Earnings per share 
 
 Basic                                14.62p      12.29p 
                                   _________   _________ 
 
 Diluted                              14.46p      12.04p 
                                   _________   _________ 
 

Consolidated Balance sheet at 31 July 2016

 
                                         2016         2015 
                                          GBP          GBP 
 
 Fixed Assets 
 Property, plant and equipment        140,174      116,743 
                                    _________    _________ 
 
                                      140,174      116,743 
 Current assets 
 Trade and other receivables        2,299,183    2,567,678 
 Cash and cash equivalents         10,171,966    8,219,388 
                                    _________    _________ 
 
 Total current assets              12,471,149   10,787,066 
                                    _________    _________ 
 
 Total assets                      12,611,323   10,903,809 
                                    _________    _________ 
 
 Equity 
 Issued capital                         7,562        7,559 
 Share premium                      1,595,040    1,591,703 
 Capital redemption reserve               689          689 
 Translation reserve                    5,595        9,966 
 Retained earnings                  7,945,446    7,088,194 
                                    _________    _________ 
 
 Total equity                       9,554,332    8,698,111 
                                    _________    _________ 
 Liabilities 
 Non-current liabilities 
 Deferred tax                          16,643       11,843 
                                    _________    _________ 
 Liabilities 
 Current liabilities 
 Trade and other payables           2,867,245    2,042,599 
 Corporation tax                      173,103      151,256 
                                    _________    _________ 
 
 Total current liabilities          3,040,348    2,193,855 
                                    _________    _________ 
 
 Total liabilities                  3,056,991    2,205,698 
                                    _________    _________ 
 
 Total equity and liabilities      12,611,323   10,903,809 
                                    _________    _________ 
 

Consolidated statement of cash flows

For the Year Ended 31 July 2016

 
                                                  2016        2015 
                                                   GBP         GBP 
 Cash flows from operating activities 
 Profit for the year                         1,105,695     935,379 
 Depreciation                                   84,067      81,267 
 Exchange differences on translation 
  of foreign operations                        (4,371)       9,966 
 Share based payments                           16,202      17,710 
 Decrease/(increase) in receivables            268,495   (492,914) 
 Increase in payables                          824,648     146,761 
 Finance income                               (43,205)    (42,926) 
 Corporation tax expense                       277,201     262,500 
                                             _________   _________ 
 
                                             2,528,732     917,743 
 Taxation                                    (250,556)   (424,745) 
                                             _________   _________ 
 
 Net cash inflow from operating 
  activities                                 2,278,176     492,998 
                                             _________   _________ 
 
 Cash flows from investing activities 
 Interest received                              43,205      42,926 
 Purchase of property, plant and 
  equipment                                  (107,498)    (89,868) 
                                             _________   _________ 
 
 Net cash outflow from investing 

  activities                                  (64,293)    (46,942) 
                                             _________   _________ 
 
 Cash flows from financing activities 
 Proceeds from issue of shares                   3,340      25,983 
 Purchase of own shares                              -   (157,500) 
 Equity dividends paid                       (264,645)   (266,645) 
                                             _________   _________ 
 
 Net cash outflow from financing 
  activities                                 (261,305)   (398,162) 
                                             _________   _________ 
 
 Increase in cash in the year                1,952,578      47,894 
 
 Cash and cash equivalents at beginning 
  of year                                    8,219,388   8,171,494 
                                             _________   _________ 
 
 Cash and cash equivalents at end 
  of year                                   10,171,966   8,219,388 
                                             _________   _________ 
 

Notes

1. The profit and loss account incorporates the consolidated results of World Careers Network PLC and its subsidiary for the year ended 31 July 2016. The accounting policies used in the preparation of these audited results are unchanged from those adopted by the company in previously published annual financial statements.

   2.       Earnings per share 

Basic earnings per share

This is calculated by dividing the profit of GBP1,105,695 (2015: GBP935,379), being the profit attributable to ordinary shareholders, by the weighted average number of ordinary shares in issue during the year of 7,561,263 (2015: 7,611,378).

Diluted earnings per share

The weighted average number of shares for this calculation was increased to 7,645,920 (2015: 7,770,425) to recognise the effects of the potential issue of further ordinary shares.

   3.      The directors are recommending the payment of a dividend of 3.5p per share. 

4. The preliminary announcement was approved by the board on 31 October 2016. The Company's annual accounts will be sent to shareholders on 21 November 2016 and copies will be available from the company's office at 5-7 Bridgeworks, The Crescent, London SW19 8DR and on the Company's website at www.wcn.co.uk.

5. The financial information does not constitute the company's statutory accounts, within the meaning of Section 435 of the Companies Act 2006, for the years ended 31 July 2016 or 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the company's forthcoming annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under the Companies Act 2006, s498(2) or (3).

Enquiries

World Careers Network Plc

Charles Hipps, Managing Director,

Telephone: [phone]

Email:[e-mail].

Panmure Gordon (UK) Limited

Nominated Adviser

Andrew Potts

Telephone: [phone]

This information is provided by RNS

The company news service from the London Stock Exchange

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November 08, 2016 02:00 ET (07:00 GMT)