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Share Name | Share Symbol | Market | Type |
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Nuverra Environmental Solutions Inc | AMEX:NES | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 2.149 | 0 | 01:00:00 |
RNS Number:3465L NetStore PLC 21 May 2003 Immediate release 21 May 2003 Netstore plc Results for the quarter ended 31 March 2003 "Strong trading continues" "EBITDA profit achieved for the first time since IPO" Netstore plc ("Netstore"), a leading provider of managed IT solutions, announces results for the three months ended 31 March 2003. Highlights: * Turnover increased by 28% to #3.9m compared with the previous quarter and by more than one and a half times compared with the previous year (2002: #2.5m). * Operating losses reduced to #0.4m compared with losses of #0.7m in the previous quarter (2002:#1.5m) (before charges for share options and goodwill). * EBITDA profit of #0.2m for the quarter, the first EBITDA profit since IPO, compared with a EBITDA loss in the previous quarter of #0.1m (2002: a loss of #0.7m). * Acquisition of NetConnect, an internet security services business, trading profitably. Paul Barry-Walsh, Chairman and Chief Executive Officer, commenting on the results said: "It is very pleasing to have reached EBITDA positive during the quarter we planned to achieve this target and to have made so much progress with our developing corporate strategy. We have delivered very positive trends over the last 18 months with strong organic growth, careful cost control and an ability to integrate new businesses successfully." On prospects he added: "We are confident that the strategy of focusing on fewer key vertical markets will produce substantial opportunity in the coming year; we now look forward to driving Netstore to profitability." For further information, please contact: Netstore plc (NES) 01344 444 300 Paul Barry-Walsh, Chairman paul.barry-walsh@netstore.net Neil Lloyd, CFO neil.lloyd@netstore.net Evolution Beeson Gregory 020 7488 4040 Mike Brennan Buchanan Communications 020 7466 5000 Charles Ryland Catherine Miles QUARTERLY STATEMENT for the three months ended 31 March 2003 I am very pleased to announce the results of Netstore plc for the three months ended 31 March 2003; a quarter in which we have continued to meet the challenging targets we set ourselves, and, importantly, we have seen further validation of our developing corporate strategy. Results Turnover increased by 28% to #3.9m in line with our expectations, compared with the three months ended 31 December 2002 (2002: #2.5m), including #0.5m from the newly acquired NetConnect business for its first month of trading. The amount of new business signed in the quarter, measured as first year contract value, was #1.4m; in line with our targets for the seventh consecutive quarter. Income from managed IT services under long-term contracts continues to make up the major part of our business, representing 63% of total turnover in the quarter, including NetConnect, which has a lower proportion of recurring business in the quarter (32%) than the existing business (68%). We expect to maintain managed service turnover at over 65% of total turnover on an annualised basis, however, as we are now focussing on larger more complex contracts, often there is a high proportion of set up revenues (licences, hardware and third party consultancy) in advance of the managed revenue stream that may distort our sales mix in the short-term. Annualised recurring revenues at 31 March 2003 stood at approximately #12.6m, which represents a 26% growth in recurring revenue over the quarter, with #2.0m attributable to NetConnect. Gross margin for the quarter was 45% compared with 49% for the quarter to 31 December 2002 (2002: 42%). The higher proportion of set up revenues, where margin is lower than on managed services or professional services delivered by our own staff, led to gross margin being lower than the previous quarter, although in line with expectation. We expect the longer-term trend of our margin to be upwards as managed service revenues build but subject to short-term fluctuation during the implementation phases of larger contracts. Gross margin achieved on the NetConnect revenues was 50%, a level we expect that business to maintain going forward. Both selling and distribution costs and administration expenses were in line with expectations at #1.6m and #0.6m respectively; similar to the quarter ended 31 December 2002 (2002: #1.7m and #0.8m), despite the current quarter including #0.2m of overhead costs from NetConnect. Operating loss, therefore, was as expected at #0.4m compared with #0.7 m for the quarter ended 31 December 2002 (2002: #1.5m ) (before charges for share options and goodwill). EBITDA showed a profit of #0.2m for the quarter, the first time we have made a profit at the EBITDA level, compared with a loss of #0.1m for the quarter ended 31 December 2002 (2002: loss of #0.9m). Cash Flow and Cash Balances During the quarter, cash balances reduced by #2.9m. This was as expected due to the acceleration of cash collections reported in the previous quarter, the investment in hardware for the Housing Corporation contract and the #0.9m expended on the purchase of the NetConnect business, including acquisition expenses. Cash balances were #12.9m at 31 March 2003, compared with #15.8m at 31 December 2002 (2002: #16.6m). Acquisition 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 initial consideration payable for the purchase of NetConnect was #766,666. Additional consideration of up to #766,667 is payable three months after the completion date and is dependent upon the net asset value achieved by NetConnect as at the date of completion. Further consideration of not more than #766,667 may become payable six months after completion and is dependent upon the level of gross profit and earnings before interest and tax achieved by NetConnect in the six months following completion. Notwithstanding any of the foregoing, the total consideration for the purchase of NetConnect shall not exceed an aggregate amount or value of #2,300,000; all satisfied in cash. 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. Prior to acquisition, a great deal had already been done to reduce the overhead burden on the business and it is currently trading profitably. Netstore's strategy is to grow revenue both through new customers and by providing new services to existing customers; new services that we may develop ourselves, provide with partners or acquire, as in the case of NetConnect. The acquisition provides a number of new services from a profitable platform that Netstore can sell across its current customer base. Also, the majority of NetConnect's existing customer base is larger organisations; Netstore's target market. Current Trading and Prospects Current trading is progressing well with #0.6 m of new business (measured as first year value) signed in the current quarter, in line with where we would expect to be at this stage in the quarter. Revenue flowing from deferred revenue and contracted renewals, plus revenue from other projects signed but not yet completed and billed, will total approximately #12.7 m in the current year. Our recent contract wins and the larger opportunities we are now seeing in our pipeline are proof that our corporate strategy is taking the company in the right direction; we expect our target verticals and local authorities in particular to provide substantial opportunity in the coming year. The improvement in the trading of Netstore continues and we have good reason to look forward with confidence. Once again, thanks are owed to our staff for their contribution to another good quarter. Paul Barry-Walsh 21 May 2003 GROUP PROFIT AND LOSS ACCOUNT For the three months ended 31 March 2003 Unaudited Unaudited Unaudited Audited 3 months to 3 months to 9 months to 12 months to 31 March 31 March 31 March 30 June 2003 2002 2003 2002 Note #'000 #'000 #'000 #'000 TURNOVER Continuing operations 3,403 813 9,627 2.885 Acquisitions 525 1,703 525 3,759 3,928 2,516 10,152 6,644 Cost of sales (2,169) (1,456) (5,276) (3,717) GROSS PROFIT 1,759 1,060 4,876 2,927 Selling and distribution costs (1,596) (1,693) (4,888) (6,295) Administrative expenses (605) (845) (2,034) (3,963) Amortisation of goodwill (256) (246) (731) (509) Credit/(Charges) arising from - 213 (84) 115 share price movements OPERATING (LOSS) (698) (1,511) (2,861) (7,725) Continuing operations (747) - (2,910) - Acquisitions 49 - 49 - Profit/(Loss) on disposal of (6) - 1 (3) tangible fixed assets Amounts written off investments - - (186) Interest receivable and similar 121 206 418 984 income Interest payable (19) (4) (37) (14) LOSS ON ORDINARY ACTIVITIES (602) (1,309) (2,479) (6,944) BEFORE TAXATION Tax on loss on ordinary 144 - 144 - activities LOSS FOR THE PERIOD (458) (1,309) (2,335) (6,944) Loss per share - basic and 2 (0.48) (1.47) (2.66) (7.51) diluted (pence) All operations are continuing. An analysis of operating loss by acquired entity for the comparative periods has not been given on the face of the profit and loss due to shared administrative functions and costs. GROUP BALANCE SHEET at 31 March 2003 Unaudited Unaudited Audited 31 March 31March 30 June 2003 2002 2002 Notes #'000 #'000 #'000 FIXED ASSETS Intangible assets 5,928 3,728 3,279 Tangible assets 3,977 3,360 3,093 Investments 80 147 59 9,985 7,235 6,431 CURRENT ASSETS Stock 15 - - Debtors 5,016 2,233 4,013 Cash at bank and in hand 12,913 16,579 15,407 17,944 18,812 19,420 CREDITORS: amounts falling due within one year Deferred income 4,324 2,018 3,062 Other creditors 5,686 2,642 3,372 10,010 4,660 6,434 NET CURRENT ASSETS 7,934 14,152 12,986 TOTAL ASSETS LESS CURRENT LIABILITIES 17,919 21,387 19,417 CREDITORS: amounts falling due after 1,266 550 509 more than one year PROVISIONS FOR LIABILITIES AND CHARGES 597 481 513 NET ASSETS 16,056 20,356 18,395 CAPITAL and RESERVES Called up share capital 19,207 19,175 19,207 Share premium account 34,689 34,689 34,689 Merger reserve (9,744) (9,620) (9,744) Profit and loss account (28,096) (23,888) (25,757) SHAREHOLDERS' FUNDS - equity interests 4 16,056 20,356 18,395 GROUP STATEMENT OF CASH FLOWS For the three months ended 31 March 2003 Unaudited Unaudited Unaudited Audited 3 months to 3 months to 9 months to 12 months to 31 March 31 March 31 March 30 June 2003 2002 2003 2002 Note #'000 #'000 #'000 #'000 NET CASH OUTFLOW FROM OPERATING 5 (2,320) (2,007) (707) (6,275) ACTIVITIES RETURN ON INVESTMENTS AND SERVICING OF FINANCE Interest received 121 205 418 984 Interest paid under finance lease and (2) (1) (6) (7) similar agreements Other interest paid (17) (3) (32) (7) 102 201 380 970 TAXATION 144 - 144 - CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire intangible fixed - 447 (5) (536) assets Payments to acquire tangible fixed (352) (122) (2,660) (2,195) assets Receipts from sale of tangible fixed 70 - 70 12 assets Payments to acquire investments - (12) (21) (110) (282) 313 (2,616) (2,829) ACQUISITIONS AND DISPOSALS Payments to acquire subsidiary (767) 2 (767) (1,399) Acquisition expenses (131) - (131) - Cash inflow from acquisition of 387 - 387 2 subsidiary (511) 2 (511) (1,397) NET CASH OUTFLOW BEFORE MANAGEMENT OF (2,867) (1,491) (3,310) (9,531) LIQUID RESOURCES AND FINANCING MANAGEMENT OF LIQUID RESOURCES (Increase)/Decrease in short term 3,833 1,496 3,235 10,025 deposits FINANCING Proceeds from issue of ordinary share - - - 5 capital Repayment of finance leases (38) (51) (134) (124) Repayment of long term loans (33) (8) (50) (19) New long term loans - - 1,000 - (71) (59) 816 (138) INCREASE/ (DECREASE) IN CASH 895 (54) 741 356 NOTES at 31 March 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 2002. The financial information contained in this report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. Statutory accounts for the twelve months ended 30 June 2002 incorporating an unqualified audit report have been filed with the Registrar of Companies. The financial information for the nine months ended 31 March 2003 and 31 March 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 a weighted average number of shares of 95,942,694 shares in issue during the period (three months ended 31 March 2002: 89,192,982; year ended 30 June 2002: 92,434,524). 3. INVESTMENTS On 13 March 2003, the Group acquired NetConnect Limited for an initial consideration of #766,666. Additional consideration of up to #766,667 is payable three months after completion and is dependent on the net asset value achieved by NetConnect at the date of completion. Further consideration of not more than #766,667 may become payable six months after completion and is dependent upon the level of gross profit and earnings before interest and tax achieved by NetConnect in the six months following completion. The consideration will be satisfied in cash. The investment in NetConnect Limited has been included in the company's balance sheet at its fair value at the date of acquisition. Analysis of the acquisition of NetConnect Limited: Net assets at date of acquisition: Net assets at date of acquisition: Fair Value to group Unaudited #'000 Tangible fixed assets 168 Debtors 1,576 Stock 28 Cash 387 Creditors due within one year (3,102) ------- Net liabilities (943) Goodwill arising on acquisition 3,374 ------- 2,431 ------- Discharged by: Cash consideration 767 Deferred cash consideration 1,533 Costs associated with the acquisition 131 ------- 2,431 ------- Goodwill is being amortised over fifteen years, its useful economic life. 4. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Share Share premium Merger Profit and capital account reserve loss account Total #'000 #'000 #'000 #'000 #'000 At 1 April 2002 19,174 34,689 (9,620) (23,888) 20,355 Shares issued 33 - - - 33 Shares issued by subsidiary - - (124) - (124) Loss for the quarter - - - (1,869) (1,869) ------------ ------------ ------------ -------------- ------------- At 1 July 2002 19,207 34,689 (9,744) (25,757) 18,395 Loss for the quarter - - - (1,050) (1,050) Exchange difference - - - (3) (3) ------------ ------------ ------------ -------------- ------------- At 1 October 2002 19,207 34,689 (9,744) (26,810) 17,342 Loss for the quarter - - - (830) (830) Exchange difference - - - (1) (1) ------------ ------------ ------------ -------------- ------------- At 1 January 2003 19,207 34,689 (9,744) (27,641) 16,511 Loss for the quarter - - - (458) (458) Exchange difference - - - 3 3 ------------ ------------ ------------ -------------- ------------- At 31 March 2003 19,207 34,689 (9,744) (28,096) 16,056 ------------ ------------ ------------ -------------- ------------- 5. NOTES TO STATEMENT OF CASH FLOWS (a) Reconciliation of operating loss to net cash inflow / (outflow) from operating activities Unaudited Unaudited Unaudited Audited 3 months to 3 months to 31 9 months to 31 12 months to 31 March 2003 March 2002 March 2003 30 June 2002 #'000 #'000 #'000 #'000 Operating loss (698) (1,511) (2,861) (7,725) Depreciation 617 606 1,875 1,914 Amortisation of goodwill 256 246 731 509 Increase/(Decrease) in deferred income (1,031) 508 32 1,616 (Increase)/ Decrease in debtors (922) 368 573 (2,439) Decrease in creditors (549) (2,011) (1,155) (35) Increase/(Decrease) in provisions - (213) 84 (115) Decrease in stock 13 - 13 - (Loss) /Gain on sale of fixed assets (6) - 1 - -------- -------- -------- -------- (2,320) (2,007) (707) (6,275) -------- -------- -------- -------- (b) Reconciliation of net cash flow to movement in net funds Unaudited Unaudited Unaudited Audited 3 months to 3 months to 9 months to 12 months to 31 March 2003 31 March 2002 31 March 2003 30 June 2002 #'000 #'000 #'000 #'000 (Decrease)/Increase in cash 895 (54) 741 356 Cash flow from increase/(decrease) in (3,833) (1,496) (3,235) (10,025) short term deposits Cash flow from decrease in debt and 71 59 184 143 change in lease finance Loans and finance leases acquired - - - (181) New finance leases - (600) - (600) New long term loans - - (1,000) - ------------- ------------- ------------- --------------- Movement in net funds (2,867) (2,091) (3,310) (10,307) Net funds at beginning of period 14,248 17,929 14,691 24,998 ------------- ------------- ------------- --------------- Net funds at end of period 11,381 15,838 11,381 14,691 -------- -------- -------- -------- 5. NOTES TO STATEMENT OF CASH FLOWS (CONTINUED) (c) Analysis of net funds Finance lease and hire Cash and purchase Short term Long term cash deposits agreements loans loans Total #'000 #'000 #'000 #'000 #'000 At 1 April 2002 16,579 (668) - (73) 15,838 Cash flow (1,172) 50 - 8 (1,114) Other - - (33) - (33) -------- ------- ------- ------- ------- At 1 July 2002 15,407 (618) (33) (65) 14,691 Cash flow 10 48 - 9 67 -------- ------- ------- ------- ------- At 1 October 2002 15,417 (570) (33) (56) 14,758 Cash flow 434 48 (100) (892) (510) -------- ------- ------- ------- ------- At 1 January 2003 15,851 (522) (133) (948) 14,248 Cash flow (2,938) 38 - 33 (2,867) -------- ------- ------- ------- ------- At 31 March 2003 12,913 (484) (133) (915) 11,381 -------- ------- ------- ------- ------- This information is provided by RNS The company news service from the London Stock Exchange END QRTURVNRONRVUAR
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