We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Name | Symbol | Market | Type |
|---|---|---|---|
| Nets Trust | AMEX:ITL | AMEX | Fund |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
Hot Features
Premium
RNS Number:2981L
Intec Telecom Systems PLC
20 May 2003
Intec Telecom Systems PLC - Interim Results for the
six months ended 31 March 2003
EBITDA up 155% to #1.9 million; #2.6 million operating cash inflow
Intec Telecom Systems PLC ("Intec" or "the Company"), a leading provider of
telecoms Operations Support Systems ("OSS"), is pleased to announce its
unaudited interim results for the six months ended 31 March 2003. Despite very
competitive market conditions turnover at #22.3 million is in line with the
Directors' expectations. As a result of an ongoing focus on productivity and
cost management, Intec has recorded a substantial increase in EBITDA to #1.9
million compared with #755,000 for the six months ended 31 March 2002
("HY 2002"). Trading in the first few weeks of the third quarter is
encouraging, and the Directors believe that current visibility of full year
results gives confidence in achieving expectations for the full year.
HIGHLIGHTS
__________
* Half year revenue of #22.3 million (HY 2002: - #23.2 million) - an
excellent result in competitive trading conditions.
* Recurring revenue, up 24% compared to the same period in 2002, now
represents over 50% of turnover.
* 155% increase in earnings before interest, tax, depreciation, and
amortisation ("EBITDA") to #1,928,000 (HY 2002: - #755,000).
* Positive operating cash inflow of #2.6 million (HY 2002: outflow of #0.7
million) - and a fifth consecutive cash flow positive quarter.
* Loss before tax was #2.3 million (HY 2002: loss of #3.0 million), after
amortisation of goodwill and intangible assets of #3.5 million (HY 2002:
#2.9 million) and depreciation of #0.9 million (HY 2002: #0.8 million).
* Adjusted earnings per share of 0.5 pence (HY2002: adjusted loss per share
of 0.13 pence)
* 58 new name customers, including 31 from the acquisition of the Settler
business from Ericsson.
* Customer installations reach 465 with important wins in China, Colombia,
the Czech Republic, Ireland, Italy, Jamaica, South Africa, Venezuela, the UK
and the US.
* Intec remains fully-funded with cash and cash equivalent investments
increased to #12.3 million after payment for Settler business.
* Intec wins "Overall Best Contribution to Billing" at May's World Billing
Awards 2003.
"Intec continues to improve its operating performance with a substantial
increase in EBITDA and operating cash inflow against a background of difficult
and competitive market conditions, together with a number of negative
geo-political events", says Intec's Executive Chairman, Mike Frayne. "Our
efforts to maximise productivity while sustaining important investment areas
such as product development and customer support are helping Intec to build
market share in both interconnect billing and mediation and to position us for
future growth."
"New licences remain the most challenging aspect of the marketplace for all
software vendors. Intec has won important deals for both its major product
families, and there is clear customer interest in both interconnect and
mediation solutions that can deliver improved operating performance", adds Chief
Executive Kevin Adams. "Although competition remains high we believe that
customers are increasingly looking to financially stable vendors with clear
product roadmaps for their next OSS projects."
For further information:
Kevin Adams, CEO
Intec Telecom Systems PLC
+44 (0) 1483 745800
kevin.adams@intec-telecom-systems.com
_____________________________________
Andrew Rodaway
Intec Telecom Systems PLC
+44 (0) 7768 808082
andrew.rodaway@intec-telecom-systems.com
________________________________________
Cubitt Consulting
Fergus Wylie/Sarah Brydon
+44 (0) 20 7367 5100
fergus.wylie@cubitt.com
_______________________
Chairman's and CEO's Statement
Overview
In the first half of its 2003 financial year Intec Telecom Systems has
reinforced its position as a market-leading vendor of Operations Support Systems
in two key areas, mediation and interconnect billing, as well as launching
several new products which address next generation requirements. Sound cost
management and a strong focus on both new business and recurring revenues has
also allowed Intec to deliver another set of solid financial results, with
increased EBITDA margin and positive operating cash inflows.
A total of 27 new customer contracts have been signed against a backdrop of
difficult and competitive market conditions in a period which also included a
number of negative geo-political events. These wins, together with recurring
revenues now representing 52% of our total turnover of #22.3 million, and a
positive EBITDA of #1.9 million in the middle of our financial year, demonstrate
the health and increasing stability of Intec's business. Operating cash inflow
was #2.6 million, the fifth successive quarter with positive inflow, as a result
of prudent cost management and continued improvements in credit control.
The telecommunications market remains cautious in its spending patterns.
Extended sales cycles and pricing pressure define the business environment.
Intec's response is to work closely with customer and business partners to
demonstrate the strong return on investment that can be achieved with our
technology. We also market our financial stability and sustained investment in
new product development, two critical areas for customers concerned about long
term vendor relationships. Intec's annual customer churn rate among licenced
customers remains under 1% annually - an outstanding figure in the present
industry.
Intec has recently launched an important new product, Inter-contenT, which
addresses the requirement for settlement for advanced, next generation services
such as multimedia content. Demonstrated at recent trade shows, the response
from potential customers to this very capable, end-to-end solution has been very
encouraging. We have also announced new solutions in other areas, including
Wireless LAN (WLAN or Wi-Fi) and Automated Reconciliation. We are also pleased
to report the first live installation of Inter-activatE, a flow-through service
activation solution.
Strategic cost management initiatives taken over the past few quarters,
including a substantial review of our development projects and our distribution
channels, have directly contributed to improving margins. EBITDA has increased
155% over the equivalent period in 2002. Our policy is to continue investing in
development, marketing, sales and customer support, to enable us to sustain
business growth, but with a clear focus on eliminating unnecessary or
unproductive expenditure.
During the period we concluded the acquisition of the 'Settler' business of
Ericsson, our major competitor in the interconnect billing market. With this
acquisition Intec has expanded its base of supported customers by 31 carriers,
and acquired a new business partner in Ericsson. Technology acquired from
Ericsson has also been used to launch new products and strengthen our roadmap in
other areas.
Operational Review
Building profitable market share amongst quality customers remains Intec's
number one operational priority. All vendors in Intec's market compete
aggressively for new licence customers. It is therefore rewarding to see the
progress we have made in securing important wins despite tough competition.
During the period under review Intec increased its customer base by 58
companies, including 31 through the Settler business acquisition. New customers
were signed in China, Colombia, the Czech Republic, Ireland, Italy, Jamaica,
South Africa, Venezuela, the UK and the US. Notable wins included Chinasat, our
first new customer in mainland China; Eircom, the main fixed line provider in
Ireland; mobile operator Eurotel in the Czech Republic; and APBW in Taiwan, a
new 3G provider.
Our acquisition of the 'Settler' business from Ericsson, now rebranded as
InterconnecT Settler, brought Intec new customers in 22 countries, 9 of which
are new to the Intec Group. Customers include major carriers in Scandinavia,
South America, and across Europe. We have conducted our first User Conference
for InterconnecT Settler customers with very positive feedback.
Other important product developments have included the launch of Inter-contenT,
our end-to-end settlement solution for next-generation content mobile services;
and the Intec WLAN Solution which allows companies operating WLAN or Wi-Fi '
hotspots' to generate revenue from their networks.
Our core products InterconnecT and Inter-mediatE continue to generate the bulk
of current sales, with both lines performing well in current difficult market
conditions with Inter-mediatE ahead of InterconnecT for this half year. Both
mediation and interconnect billing are critical business processes for any
telecoms operator today, and we have seen sustained interest from new carriers
and existing operators in these world-leading products. The InterconnecT family
is the clear market leader worldwide, particularly after the Settler
acquisition, with over 270 installations. Inter-mediatE has also, we believe,
moved into a position of market leadership by a number of measures, such as new
licence contracts won or total traffic handled.
Strong investment in successful products, both current and next generation, is
an important objective at Intec. We believe that by continually expanding
capabilities and improving quality and performance we will achieve increasing
dominance for our products, as well as enjoying strong customer relations. We
strive to keep customers closely informed about new developments and future
product roadmaps and our very low level of licenced customer turnover, less than
1% annually, reflects the high levels of satisfaction we achieve.
In the CABS (Carrier Access Billing Systems) area, we recently announced the
signing of a multi-million dollar service contract with a major US
communications provider. In response to this and other new business we have
expanded the CABS service bureau in Dallas, Texas, to accommodate customer
growth of almost 350 percent and bill processing volume growth of nearly 500
percent. Intec's Dallas office serves as the centre for its CABS services and
InterconnecT CABS CG (Carrier Grade) product development.
Acquisition update
Intec continues a long term policy of business expansion through both organic
development and carefully evaluated and managed acquisitions. Since becoming a
public company in June 2000, Intec has made a number of acquisitions in the OSS
sector aimed at either consolidating competitive businesses to generate greater
market share, or acquiring and integrating companies with complementary
technology.
In December 2002, Intec acquired Ericsson's 'Settler' business unit, its major
competitor in the interconnect billing market. The agreement included the
transfer of the highly experienced Settler development team in Sweden and
exclusive worldwide rights to develop and market the Settler product range. The
agreement includes further cooperation between the two companies where Ericsson
will continue to offer solutions based on InterconnecT Settler as well as
Intec's own InterconnecT product suite.
The total consideration, now fully paid, amounted to US$5.1 million (#3.1
million including acquisition costs). The acquisition is expected to be revenue
and earnings enhancing, generating new licence revenues, related services work
and recurring revenues for support & maintenance. A key benefit of the agreement
is the synergy that will be achieved. Ericsson has a direct presence in some
countries where Intec has few resources, enabling a greater reach. In other
areas, where the two companies have previously competed fiercely, efforts can be
re-directed to other joint productive opportunities. The agreement enables
Ericsson as well as other successful Settler partners to be able to offer their
telecom customers Intec billing technology from either the InterconnecT or the
Settler range. With the recent move of our acquired staff to new premises in
Sweden, the integration is progressing smoothly.
Corporate Developments
Intec reviews its operating requirements on a continual basis. Cost management
has been a major focus in the past few quarters, particularly as pricing
pressure has been a strong feature of our market. Our approach has been to look
for cost savings primarily in non-core activities and in expenditure that we do
not believe is strongly productive in the current climate. Although staff
numbers appear relatively static, we have rebalanced skills to address current
and future market needs through redeployment, selective redundancies and new
hires.
On a like for like basis, Intec staff numbers at 31 March 2003 were 498 compared
to 500 at 30 September 2002. Including 30 new staff from the Settler
acquisition, total staff numbers at 31 March 2003 were 528.
Financial Review
As previously stated Intec experiences a degree of unevenness in quarterly
revenues, primarily due to long sales cycles and uncertainty in the closure
dates of new contracts. Total reported revenues, amounting to #22.3 million, are
#0.9 million or 4% lower than HY 2002. We believe that this is an excellent
result given the challenges in today's market.
Whilst licence sales of #4.3 million (19% of turnover) are significantly lower
than the #8.1 million reported in HY 2002, the results for our second quarter of
2003 show a welcome improvement with licence sales of #2.9 million compared to
#1.4 million in the first quarter.
Recurring revenues, which consist of support and maintenance, volume upgrades,
bureau and support business, continue to be a growing contributor to our
business model, at #11.7 million (52%) of turnover, up 24% from #9.4 million
(41%) for HY 2002. This includes a contribution of #0.4 million from the Settler
business acquisition.
Professional services income, including contracted implementation and
consultancy services, has also increased to #6.4 million (29%) from #5.7 million
(25%) in HY 2002.
All regions made stable and satisfactory contributions in the period, with EMEA
contributing 42% of turnover, North America 42%, CALA 8%, and Asia-Pacific 8%.
Gross margin increased to 69% (HY 2002: 67%), largely reflecting more efficient
use of internal and external resources for implementations. The decrease in
distribution costs from #5.3 million to #4.5 million reflects, in the main,
reduced partner fee and commission payments due to reduced licence sales.
As stated earlier Intec continues to invest in its product portfolio to help us
take advantage of next-generation technologies and the growing requirements of
our major carrier customers. This cost item includes the Settler development
team (#0.4 million expenditure in the period), investment in new products,
ongoing enhancements to existing lines, and the strengthening of product
management. However, to mitigate product cost growth, we continue to rationalise
development, particularly in the settlement area. This has minimised development
expenditure growth to #4.4 million (HY2002: #4.1 million).
Administrative costs decreased by 12% at #5.4 million (HY 2002: #6.1 million) as
a result of continuing attention to cost control across the business and the
reassignment of senior executives to product management. In addition, as
mentioned in our 2002 annual report, items of non-recurring expenditure such as
legal costs for the BT litigation increased our costs throughout 2002.
Goodwill amortisation charges have increased from #2.9 million in HY 2002 to
#3.5 million in the current period, reflecting additional goodwill amortisation
from the current year Settler acquisition (amortised over four years) and the
former ICL Sims/Prospero business acquired in the second quarter of 2002. No
provision for goodwill impairment has been considered necessary.
Operating loss of #2.5 million is a significant improvement over the #3.0
million operating loss reported in the prior period especially after the
relatively higher charges for both goodwill amortisation of #3.5 million
(HY2002: #2.9 million) and depreciation of #0.9 million (HY2002: #0.8 million.)
We are pleased to report that cash and cash investments at 31 March 2003 are
#12.3 million, after payment of #3.1 million (including acquisition costs) for
the Ericsson Settler business. Positive operating cash inflows of #2.6 million
reflect ongoing improvement in cash collections and the subsequent effect of
cost control measures taken throughout the group.
Intec's annualised debtor days are 96 days compared to 105 days as at 30
September 2002 and 127 days reported at 31 March 2002. Successful cash
collections have continued during the third quarter with over #4.0 million
collected in April 2003.
Outlook
In the six months to 31 March 2003, while markets are still very competitive and
sales cycles remain extended, there are signs of some improvement from both
customers and vendors in the telecoms sector. This has to be contrasted with
ongoing pricing pressure, which continues to impact both margins and revenue
growth potential.
During the period Intec has won important new business and increased its market
share. New business remains hard to win, but Intec is strongly positioned within
core markets and has promising new technologies to offer, particularly in the
next generation space.
Looking forward, although we are sure the market will remain challenging, we see
many opportunities in both existing customers and markets, as well as in new
regions and with new carriers. Intec has a solid pipeline of new business, a
strong customer base, more than sufficient financial resources for its planned
operations, and visibility in excess of 82% of full-year revenues. The Board
therefore remains cautiously optimistic about Intec's full year performance
against current expectations.
Mike Frayne, Executive Chairman
Kevin Adams, Chief Executive Officer
19 May 2003
FINANCIAL HIGHLIGHTS
6 months ended 31 March 2003
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
Note 2003 2002 2002
#000 #000 #000
TURNOVER 22,347 23,248 47,474
_________ _________ _________
EBITDA before exceptional items (i) 1,928 755 3,739
_________ _________ _________
Operating loss (2,478) (2,962) (13,325)
_________ _________ _________
Basic loss per share (1.32)p (1.71)p (7.94)p
_________ _________ _________
Adjusted (loss)/earnings per share (ii) 0.50p (0.13)p 0.46p
_________ _________ _________
Notes to the financial highlights #000 #000 #000
(i) Operating loss (2,478) (2,962) (13,325)
Depreciation 943 813 1,745
Amortisation of goodwill and other 3,463 2,904 7,079
intangible assets
Impairment of goodwill - - 7,464
Exceptional item (Poland debtor - - 776
provision)
_________ _________ _________
EBITDA before exceptional items 1,928 755 3,739
_________ _________ _________
(ii) Adjusted (loss)/earnings per share based
on following adjusted loss after tax
Loss after tax (2,502) (3,140) (14,782)
Amortisation of goodwill and other 3,463 2,904 7,079
intangibles
Impairment of goodwill - - 7,464
Amounts written off investments - - 321
Exceptional Poland debtor provision - - 776
_________ _________ _________
Adjusted (loss)/earnings after tax 961 (236) 858
_________ _________ _________
KEY CUSTOMER DATA
31 March 30 September 31 March
2003 2002 2002
Number Number Number
Cumulative:
Contracted customer base 299 272 252
Contracted customers acquired 31 - -
_________ _________ _________
Total contracted customer base 330 272 252
_________ _________ _________
Contracted installations 416 383 340
Contracted installations acquired 49 - -
_________ _________ _________
Total contracted installations 465 383 340
_________ _________ _________
CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 months ended 31 March 2003
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
Note 2003 2002 2002
#000 #000 #000
TURNOVER
Continuing operations 21,911 23,248 47,474
Acquisitions 5 436 - -
_________ _________ _________
Total turnover 2 22,347 23,248 47,474
Cost of sales (7,005) (7,686) (15,430)
_________ _________ _________
GROSS PROFIT 15,342 15,562 32,044
Distribution costs (4,531) (5,302) (9,945)
Administrative expenses:
Development expenditure (4,408) (4,074) (8,026)
Amortisation of goodwill and other intangible (3,463) (2,904) (7,079)
assets
Impairment of goodwill - - (7,464)
Exceptional item - - (776)
Other administrative expenses (5,418) (6,140) (12,079)
_________ _________ _________
Total administrative expenses (13,289) (13,118) (35,424)
_________ _________ _________
OPERATING LOSS
Continuing operations (2,266) (2,858) (13,325)
Acquisitions (212) - -
_________ _________ _________
GROUP OPERATING LOSS (2,478) (2,858) (13,325)
Share of operating loss in associate - (104) -
Total operating loss (2,478) (2,962) (13,325)
Amounts written off investments - - (321)
Interest receivable and similar income 227 277 494
Interest payable and similar charges (1) (317) (331)
_________ _________ _________
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,252) (3,002) (13,483)
Tax charge on loss on ordinary activities 3 (250) (138) (1,299)
_________ _________ _________
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
RETAINED FOR THE FINANCIAL PERIOD (2,502) (3,140) (14,782)
_________ _________ _________
Loss per share - basic 4 (1.32)p (1.71)p (7.94)p
_________ _________ _________
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
6 months ended 31 March 2003
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Loss for the financial period (2,502) (3,140) (14,782)
Exchange translation differences arising on
foreign currency net investments 141 (110) (557)
_________ _________ _________
Total recognised gains and losses in the period (2,361) (3,250) (15,339)
_________ _________ _________
CONSOLIDATED BALANCE SHEET
31 March 2003
Unaudited Unaudited Audited
31 March 31 March 30 September
Note 2003 2002 2002
#000 #000 #000
FIXED ASSETS
Intangible assets 63,250 74,454 63,422
Tangible assets 3,034 2,962 2,910
Investments 101 364 101
_________ _________ _________
66,385 77,780 66,433
CURRENT ASSETS
Stocks 47 28 64
Debtors 6 18,037 23,003 17,965
Investments 5,699 267 5,151
Cash at bank and in hand 6,605 10,701 8,156
_________ _________ _________
30,388 33,999 31,336
CREDITORS: falling due within one year 7 (6,818) (7,307) (5,796)
_________ _________ _________
NET CURRENT ASSETS 23,570 26,692 25,540
_________ _________ _________
TOTAL ASSETS LESS CURRENT LIABILITIES 89,955 104,472 91,973
CREDITORS: falling due after more than one year 7 (136) - -
Deferred income (5,919) (6,692) (5,766)
_________ _________ _________
TOTAL NET ASSETS 83,900 97,780 86,207
_________ _________ _________
CAPITAL AND RESERVES
Called up share capital 8 1,906 1,881 1,903
Share premium account 8 238,703 238,058 238,652
Other reserve 8 - 100 -
Merger reserve 8 249 249 249
Foreign exchange reserve 8 (567) (261) (708)
Profit and loss account 8 (156,391) (142,247) (153,889)
_________ _________ _________
EQUITY SHAREHOLDERS' FUNDS 83,900 97,780 86,207
_________ _________ _________
RECONCILIATION OF MOVEMENT IN CONSOLIDATED SHAREHOLDERS' FUNDS
6 months ended 31 March 2003
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Loss for the financial period (2,502) (3,140) (14,782)
Other recognised gains and losses relating to the 141 (110) (557)
period
Issue of share capital net of associated expenses 54 2,737 3,353
Movement on contingent consideration on - (2,397) (2,497)
acquisitions
_________ _________ _________
(Decrease)/increase in shareholders' funds (2,307) (2,910) 14,483
Opening shareholders' funds 86,207 100,690 100,690
_________ _________ _________
Closing shareholders' funds 83,900 97,780 86,207
_________ _________ _________
CONSOLIDATED CASH FLOW STATEMENT
6 months ended 31 March 2003
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
Note 2003 2002 2002
#000 #000 #000
Net cash inflow/(outflow) from operating (i) 2,588 (698) 2,770
activities
Returns on investments and servicing of
finance
Interest received 225 277 494
Interest element of finance lease rental - (3) (4)
payments
Interest paid and similar items (1) (314) (327)
_________ _________ _________
224 (40) 163
_________ _________ _________
Taxation
Overseas taxation paid (41) (28) (378)
UK corporation taxation received/(paid) - 5 (10)
_________ _________ _________
(41) (23) (388)
_________ _________ _________
Capital investment
Payments to acquire tangible fixed assets (859) (702) (1,651)
Proceeds on disposal of fixed assets 2 43 59
_________ _________ _________
(857) (659) (1,592)
_________ _________ _________
Acquisitions
Investment in subsidiaries (see note 5) (3,400) (5,283) (5,222)
Net cash acquired with subsidiaries - - 6
_________ _________ _________
(3,400) (5,283) (5,216)
_________ _________ _________
Cash outflow before management of liquid
resources and financing (1,486) (6,703) (4,263)
Use of liquid resources
Decrease/(increase) in cash investments/term (479) 2,628 (2,252)
deposits
Payments received from escrow - 54 52
Financing
Issue of ordinary share capital 54 - -
New bank loan 221 - -
Repayment of bank loan (12) - -
Capital element of finance lease rental - (125) (188)
payments
_________ _________ _________
Decrease in cash in the period (ii),(iii) (1,702) (4,146) (6,651)
_________ _________ _________
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
6 months ended 31 March 2003
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
(i) Reconciliation of operating loss to net
cash inflow/(outflow) from operating
activities
Operating loss (2,478) (2,858) (13,325)
Depreciation 943 813 1,745
Amortisation of goodwill and other intangible 3,463 2,904 7,079
assets
Impairment of goodwill - - 7,464
Loss/(profit) on disposal of fixed assets 28 (22) (25)
Decrease/(increase) in stocks 16 2 (39)
Increase in debtors (100) (3,642) (172)
Decrease in creditors 716 2,105 43
_________ _________ _________
Net cash inflow/(outflow) from operating 2,588 (698) 2,770
activities _________ _________ _________
(ii) Reconciliation of net cash flow to
movement in net funds
Decrease in cash in the period (1,702) (4,146) (6,651)
Net cash (inflow)/outflow from (increase)/
decrease in in debt and lease financing (209) 125 188
Net cash (inflow)/outflow from (decrease)/
increase in liquid resources 479 (2,682) 2,200
_________ _________ _________
Change in net funds resulting from cash flows (1,432) (6,703) (4,263)
Translation differences 219 (157) (195)
_________ _________ _________
Movement in net funds in the period (1,213) (6,860) (4,458)
Net funds at 1 October 13,307 17,765 17,765
_________ _________ _________
Net funds at 31 March / 30 September 12,094 10,905 13,307
_________ _________ _________
(iii) Analysis of movement in net funds
Audited Unaudited
1 October Exchange 31 March
2002 Cash flow movement 2003
#000 #000 #000 #000
Cash in hand and at bank 8,156 (1,702) 151 6,605
Cash investments and term deposits 5,151 479 69 5,699
_________
(1,223)
_________
Debt due within one year - (73) (1) (74)
Debt due after one year - (136) - (136)
_________
(209)
_________
_________ _________ _________ _________
13,307 (1,432) 219 12,094
_________ _________ _________ _________
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
6 months ended 31 March 2003
1. BASIS OF PREPARATION
The interim financial information has been prepared in accordance with
accounting policies set out in, and is consistent with, the Group's 2002
financial statements except for the taxation charge for the period which is
based on the estimated charge for the year ending 30 September 2003.
The interim financial information is neither reviewed nor audited and does not
comprise statutory accounts for the purposes of Section 240 of the Companies Act
1985.
The abridged information for the year ended 30 September 2002 has been extracted
from the Group's statutory accounts for that period, which have been filed with
the Registrar of Companies following the 2002 Annual General Meeting. The
auditors' report on the statutory accounts of the Group for that period was
unqualified and did not contain a Statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985.
The interim financial information was approved by the Board of Directors on 19
May 2003.
2. TURNOVER AND SEGMENTAL REPORTING
Turnover by origin Unaudited Unaudited
6 months ended 31 March 2003 6 months ended 31 March 2002
Inter- Inter-
Total segment External Total segment External
turnover turnover turnover turnover turnover turnover
#000 #000 #000 #000 #000 #000
United Kingdom 11,494 (131) 11,363 9,552 (912) 8,640
Continental Europe 17 - 17 141 - 141
Asia-Pacific 205 - 205 1,161 - 1,161
North America & Canada 11,039 (603) 10,436 12,809 (180) 12,629
South America 326 - 326 677 - 677
_____________________________________ ____________________________________
23,081 (734) 22,347 24,340 (1,092) 23,248
_____________________________________ ____________________________________
Audited Year ended 30 September 2002
Inter-
Total segment External
turnover turnover turnover
#000 #000 #000
United Kingdom 21,148 (1,509) 19,639
Continental Europe 166 - 166
Asia-Pacific 1,758 - 1,758
North America & Canada 25,566 (600) 24,966
South America 945 - 945
____________________________________
49,583 (2,109) 47,474
____________________________________
Turnover by destination Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
United Kingdom 2,097 1,467 3,519
Continental Europe 5,029 5,350 9,753
Eastern Europe 1,452 219 1,235
Middle East 353 63 728
Africa 441 754 1,687
Asia-Pacific 1,676 2,451 5,521
North America & Canada 9,436 10,523 21,058
South America 1,863 2,421 3,973
_________ _________ _________
22,347 23,248 47,474
_________ _________ _________
Turnover by activity Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Licence sales 4,264 8,107 15,481
Professional services income:
Implementation, migrations, consulting and training 5,254 4,096 8,730
Hardware 56 100 576
Non-telecom custom network solutions 1,118 1,513 2,957
_________ _________ _________
6,428 5,709 12,263
Recurring Income:
ASP Service 1,560 1,286 2,761
Volume upgrade licences 1,105 971 1,928
Support and maintenance fees 8,990 7,175 15,041
_________ _________ _________
11,655 9,432 19,730
_________ _________ _________
22,347 23,248 47,474
_________ _________ _________
Loss before taxation Unaudited 6 months ended 31 March 2003
Before After
amortisation of amortisation of
goodwill Amortisation of goodwill
goodwill
#000 #000 #000
United Kingdom 1,053 (1,198) (145)
Continental Europe 124 - 124
Asia-Pacific 74 - 74
North America & Canada (98) (2,265) (2,363)
South America 58 - 58
__________________________________________
1,211 (3,463) (2,252)
__________________________________________
The segmental analysis of loss before taxation for the six months ended 31 March
2003 includes intercompany interest charged from the UK to North America &
Canada of #1,890,000 (31 March 2002 - #2,104,000).
Unaudited 6 months ended 31 March 2002
Before After
amortisation of
goodwill Amortisation of amortisation of
goodwill goodwill
#000 #000 #000
United Kingdom (99) (568) (667)
Continental Europe 104 (5) 99
Asia-Pacific 31 (222) (191)
North America & Canada (230) (2,109) (2,339)
South America 96 - 96
___________________________________________
(98) (2,904) (3,002)
___________________________________________
Audited Year ended 30 September 2002
Before After
amortisation of amortisation of
goodwill, goodwill,
impairment and impairment and
exceptional Amortisation of Goodwill Exceptional exceptional
items goodwill impairment items items
#000 #000 #000 #000 #000
United Kingdom 677 (2,200) (1,684) (1,097) (4,304)
Continental Europe 185 (74) - - 111
Asia-Pacific 187 (420) (5,780) - (6,013)
North America & Canada 948 (4,385) - - (3,437)
South America 160 - - - 160
__________________________________________________________________________
2,157 (7,079) (7,464) (1,097) (13,483)
__________________________________________________________________________
Exceptional items in the year ended 30 September 2002 comprise amounts written
off investments of #321,000 and a #776,000 provision against the debtor balance
due from the associate company in Poland.
Net assets/
(liabilities) by origin
Unaudited Unaudited Unaudited Unaudited Audited
31 March 31 March 31 March 31 March 30 September
2003 2003 2003 2002 2002
Excluding Including Including Including
unamortised Unamortised Unamortised Unamortised Unamortised
goodwill goodwill goodwill goodwill goodwill
#000 #000 #000 #000 #000
United Kingdom 13,745 4,508 18,253 22,441 17,125
Continental Europe (138) - (138) 34 (58)
Africa (296) - (296) - (464)
Asia-Pacific (80) - (80) 7,262 494
North America & Canada 8,721 57,363 66,084 67,702 68,902
South America 77 - 77 341 208
_________________________________________ _______ ________
22,029 61,871 83,900 97,780 86,207
_________________________________________ _______ ________
3. TAX CHARGE ON LOSS ON ORDINARY ACTIVITIES
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Current taxation:
UK corporation tax at 30% (2002: 30%) - - -
Overseas taxation 244 304 1,098
Prior year 6 (166) 273
Total current tax 250 138 1,371
Deferred taxation:
Origination and reversal of timing differences - - (72)
___________________________________________
Tax on loss on ordinary activities 250 138 1,299
___________________________________________
i) The major trading companies in the UK and the US have not
incurred corporate tax liabilities. However, we have suffered corporate
taxation in a number of our overseas trading subsidiaries and branches
amounting to #0.15 million. The remainder of the tax charge is in respect
of withholding tax, which is deducted at source in certain jurisdictions
and which we do not expect to recover, amounting to #0.1 million.
ii) The US operations have substantial ongoing tax benefits
arising from goodwill allowances which will continue to ameliorate tax
charges against profits in future periods. In addition, there are
significant losses brought forward in the US.
4. (LOSS)/EARNINGS PER ORDINARY SHARE
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Basic loss (2,502) (3,140) (14,782)
Amortisation of goodwill and intangible assets 3,463 2,904 7,079
Impairment of goodwill - - 7,464
Amounts written off investments - - 321
Exceptional Poland debtor provision - - 776
___________ ___________ ___________
Adjusted (loss)/earnings 961 (236) 858
___________ ___________ ___________
Number Number Number
Weighted average number of shares 190,204,413 183,936,583 186,219,551
___________ ___________ ___________
Pence Pence Pence
Basic loss per ordinary share (1.32) (1.71) (7.94)
Amortisation of goodwill and other intangible assets 1.82 1.58 3.80
Impairment of goodwill - - 4.01
Amounts written off investments - - 0.17
Exceptional Poland debtor provision - - 0.42
___________ ___________ ___________
Adjusted (loss)/earnings per ordinary share 0.50 (0.13) 0.46
___________ ___________ ___________
Diluted (loss)/earnings per share is not presented in respect of outstanding
share options since none of the options are dilutive.
5. ACQUISITIONS
a) Current period acquisitions
On 18 December 2002, the group acquired Ericsson AB's 'Settler' interconnect
billing product unit, including the Settler development team and worldwide
rights to develop and market the Settler product range. The total
consideration, settled in cash, amounted to US$5.1 million (#3.0 million plus
acquisition costs of #0.1 million) as disclosed below.
Goodwill arising on acquisition has been capitalised and is being amortised over
four years from the date of acquisition. Goodwill charged in the period amounts
to #234,000. Turnover from acquisitions of #436,000 is for the period from 18
December to 31 March 2003.
Provisional
Net liabilities at date of acquisition and provisional fair value
fair value #'000
Creditors (176)
Goodwill arising on acquisition 3,299
_______
3,123
_______
Consideration paid in cash 2,990
Acquisition costs 133
_______
3,123
_______
In addition to the above, a share option was granted to the advisers to the
acquisition. This option vested on successful closure of the acquisition and
was exercisable immediately. 293,121 ordinary shares were issued at 20.2 pence
per share.
b) Prior year acquisitions
Deferred consideration of #277,000 was paid in respect of the operational
support systems business acquired from ICL, a Fujitsu company.
c) Reconciliation to cash flow statement
#000
Consideration for Settler business 2,990
Acquisition costs 133
Deferred consideration payments on prior year acquisition 277
_______
3,400
_______
6. DEBTORS
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Trade debtors 12,853 16,303 13,676
Corporation tax recoverable 196 196 196
Deferred tax 94 - 72
Withholding tax recoverable - 87 -
Other debtors 66 1,858 301
Accrued income 3,792 3,070 2,571
Prepayments
Due within one year 1,036 1,394 1,149
Due after more than one year - 95 -
________ ________ ________
18,037 23,003 17,965
________ ________ ________
7. CREDITORS
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#000 #000 #000
Falling due within one year:
Bank loan 74 - -
Obligations under finance leases - 63 -
Trade creditors 1,569 2,446 1,767
Corporation tax 454 454 454
Overseas tax 738 317 516
Other creditors including taxation and social security 857 866 686
Accruals 2,700 2,565 1,670
Deferred/contingent consideration 426 596 703
________ ________ ________
6,818 7,307 5,796
________ ________ ________
Falling due after more than one year:
Bank loan 136 - -
________ ________ ________
8. STATEMENT OF MOVEMENTS ON SHARE CAPITAL AND RESERVES
Called Share Foreign Profit
up share premium Other Merger exchange and loss
capital account reserve reserve reserve account Total
#000 #000 #000 #000 #000 #000 #000
At 1 October 2002 1,903 238,652 - 249 (708) (153,889) 86,207
Issue of ordinary shares
net of expenses 3 51 - - - - 54
Loss for the period - - - - - (2,502) (2,502)
Foreign exchange - - - - 141 - 141
translation
_______ _______ ______ ______ _______ _________ _______
At 31 March 2003 1,906 238,703 - 249 (567) (156,391) 83,900
_______ _______ ______ ______ _______ _________ _______
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR NKCKPFBKDQPD
1 Year Nets Trust Chart |
1 Month Nets Trust Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
