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Share Name | Share Symbol | Market | Type |
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Atlantia | BIT:ATL | Italy | Ordinary Share |
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RNS Number:2530J Atlantic Global PLC 27 March 2003 For immediate release 27 March 2003 ATLANTIC GLOBAL PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 Atlantic Global Plc, ("Atlantic Global" or "the Company"), the AIM listed specialist developer of business and resource management software applications to a broad range of customers, announces its preliminary results for the year ended 31 December 2002. These are extracted from the audited report and accounts for the period, which will be sent to shareholders today. In his statement, Michael Langmore, Chairman, said: "Our results for the year to 31 December 2002 show another year of organic growth for the Group, with turnover increasing by 29%. Further substantial progress has been made towards the development of Atlantic Global and expanding our range of increasingly successful products." Key points: Financial Proforma Year ended 31 Year ended 31 December 2002 December 2001 #'000 #'000 Sales 1,551 1,205 Operating profit before goodwill and 390 495 exceptional costs Earnings per share 1.60 pence 2.99 pence Dividend payable per share 0.5 pence 0.5 pence Free cash flow before exceptional costs 124 517 Net Cash Balance 1, 897 2,147 Key points: Operating * New software products released first quarter of 2002 * Major re-branding of our software suite under the Adeo name * Expansion of team - New skills brought in at all levels * Substantial increases in marketing expenditure, to strengthen brand awareness of Adeo * Further development with University of Bradford securing new DTI research and development funding. New initiatives since 31 December 2002 * New software enhancements to our current products released first quarter of 2003 * Major new products planned for 2003, to be partly funded by our customers * Continued rollouts of our software into our existing client base * The current sales pipeline and customer activity are at their highest levels in our Company's history. Outlook In his statement, Michael Langmore, Chairman, said, "We believe that the growth potential of the Group remains substantial, with our software being increasingly capable of delivering considerable benefit to most types of organisation. We are therefore extremely well positioned to achieve significant levels of ongoing growth." Enquiries: Eugene Blaine, Managing Director, Atlantic Global plc 01274 733 758 Rupert Hutton, Finance Director, Atlantic Global plc 01274 733 758 Paul Vann/Charlotte Barker, Binns & Co PR Ltd 020 7786 9600 Chairman's statement Introduction Our results for the year to 31 December 2002 show another year of organic growth for the Group, with turnover increasing by 29%. Further substantial progress has been made towards the development of Atlantic Global and expanding our range of increasingly successful products. Trading results To enable a more accurate comparison of the Group's performance for 2002 over 2001, during which Atlantic Global Plc was incorporated, proforma results for the full 12 months ended 31 December 2001 are included in these accounts. My summary of the results will also be for the full 12 months ended 31 December, for both years. The Group has achieved a very creditable result during 2002 with operating profit before goodwill and exceptional costs of #390,000 (2001: #495,000). However, the main indicator that underlying growth has been achieved can be seen in the turnover increase of 29% to #1,551,000 (2001: #1,205,000). This growth in turnover has not flowed through to the operating profit level due to the substantial amount of investment that we made, during 2002, to our software products, brand image and company infrastructure. Our additional spending during 2002, over and above that incurred in 2001, has included #100,000 on software development costs, #87,000 on the marketing of our new Adeo brand and #188,000 on our sales structure to ensure that we are fully capable of dealing with continued growth whilst consistently maintaining our levels of customer service. Therefore, during a year with generally poor economic conditions, which proved to have been difficult for many organisations, Atlantic Global has experienced a relatively successful period. Earnings per share, adjusted for goodwill and exceptional costs, were 1.60 pence (2001: 2.99 pence). The comparison with 2001 has been affected by the calculation of the weighted average number of shares shown for 2001 at 14,685,000, which took into account the period from 1 January 2001 to the placing on 4 June 2001, when there were only 2,000 shares in issue because the Company was a private company at that time. In fact, the original 2,000 shares were increased to 20,720,000 shares following the AIM listing. As a result of our listing on AIM, the Group has continued to incur additional ongoing administration costs, which were not all incurred during the whole of 2001. During 2002 these costs have amounted to #122,000 (2001: #69,000) and the difference should also be taken into account when comparing results. Dividend The Directors are proposing that a maintained final dividend of 0.5p (2001: 0.5p) per share be paid for the year ended 31 December 2002. This demonstrates our confidence in the Group's continuing ability to generate profits and cash. Dividend cover is still very healthy at 3.2 times and the Directors will pursue a progressive dividend policy, providing circumstances remain appropriate. Deferred Consideration relating to the acquisition of Atlantic EC Ltd At the time of the acquisition of Atlantic EC Ltd, it was agreed, that subject to the attainment of certain profit targets during the year ended 31 December 2002, that a final payment of #250,000 would be due to the vendors payable partly in Atlantic Global Plc ordinary shares and partly in cash. As a result of the investment in the Group, referred to in the trading results above, the required target has not been achieved and therefore no part of the #250,000 is payable. Achievements during 2002 During the year we have once again successfully expanded our range of blue chip customers, helping clients in an ever-increasing range of industries, to improve the efficiency of their systems. Further details are given in Eugene Blaine's Managing Director's Review. As mentioned in the trading results above, we have increased our research and development expenditure and, as a result, Adeo has been enhanced and new software products have been successfully offered to our marketplace since the first quarter of 2002. We now have five software modules, covering a wider range of people and resource controls, compared to three modules previously. During February 2002 we re-branded our entire suite of software products under the name "Adeo", and commenced a major marketing campaign to fully exploit the potential demand that we believe exists for our software. We have effectively managed the expansion within the Group, and the executive team and operational systems were considerably strengthened during the year. Our partnership with the University of Bradford, with its excellent research facilities, continues to provide significant benefits including the recent recruitment of a second graduate to aid with research. Due to the continued cash generative nature of our business, the Group had net cash balances, at 31 December 2002, of #1,897,000 (2001: #2,147,000). The reduction of #250,000 during the year can be accounted for by the dividend of #104,000 for 2001, and the 2001 deferred consideration cash payment of #225,000, based on the profit achievement in 2001. The Group is therefore in an excellent position of being financially secure and this will be maintained as we continue to generate cash from substantial profit levels. To confirm this cash generating ability the amount of free cash flow produced during 2002, despite the additional expenditure noted above, was #124,000 (before exceptional costs), compared with #517,000 for 2001. Income recognition The system accounting for sales and sales costs is not the same in every company and I therefore believe it would be useful to state how we account for sales revenue. Turnover represents the amounts invoiced and receivable, for the Group's software licences, consultancy and support services. We only account for sales directly to our customers and following the installation of a software licence. The invoice would usually include an amount for ongoing support. This support element is deferred and recognised, on an equal monthly basis, over the whole period for which support is to be provided. Income from the sale of software licences is recognised only when the software is installed. The Group does not capitalise any costs incurred on research and development, or in bidding for any sale and writes all such costs off to the profit and loss account as they are incurred. We believe that the above method shows good accounting practice and helps to produce a true and fair view of profitability. Board Changes At the Annual General Meeting held on 19 April 2002, we were pleased to appoint Rupert Hutton to the Board as Finance Director. Rupert joined Atlantic Global in July 2001 and since his appointment he has continued to demonstrate a wide ability and excellent enthusiasm for the Group and the Board is confident that his general management skills will also be of significant benefit. Paul Lilley, who held the position of Sales and Marketing Director, retired from the Board in October 2002, due to ill health. I am pleased to announce the appointment, in February 2003, of Mark Allcock as Sales and Marketing Director designate. Mark is a highly experienced executive having held senior appointments within Admiral Plc and CMG Plc. The Board is confident that he will play an important part in the Group's future success. People We are increasingly recognising that the quality and ability of our team is crucial to our success. Their hard work, enthusiasm and willingness to be team players can make the difference between an average or an excellent performance. The progress made during 2002 was done so under challenging and sometimes very difficult conditions and every member of the team, including the executive directors, has had a part to play in the results achieved. I would take this opportunity, on behalf of myself and my fellow shareholders, to offer each one of them our sincere appreciation for their efforts. During 2002 we have expanded our team with several new, talented people. We are sure that they will make an excellent contribution to our success. We maintained our Investors in People Standard throughout 2002, and are intending to be formally reassessed during 2003. This is an independent measure of our commitment to the development of our people. It is of some importance that, due to the facility afforded to us with our listing on AIM, we are able to ensure that almost all of our team now have share options in the Group. This helps ensure that, they remain closely involved with the success of the Group, to the benefit of all stakeholders. Website Our website at www.atlantic-global.net is constantly being updated, is now more user-friendly than ever before and has an extensive Investor Relations section. If the Internet is available to you, I would encourage you to view the site. Strategy Our overall strategy is to progress the sale and support of high quality, multi-functional software to blue chip and other customers in a wide variety of industries and the public sector. We are continuing to use our proven track record to build an increasingly diverse customer base, thereby lessening the risk factor associated with dealing with a smaller number of business sectors. We are finding that our customers are showing an increased need to maintain and improve their administration and control systems. This may have been encouraged partly by the general economic conditions. Our products are ideally placed to help our customers to achieve these improved efficiencies. We are continuing to invest in the development of our software to further improve its capability and remain at the forefront of our sector. During 2002 the amount invested in research and development expenditure was #283,000, being 18.2% of sales, compared to #185,000 and 15.3% of sales in 2001. This compares to #82,000 and 9.9% of sales in 2000. To assist with our sales development we are working closely with our sales alliances to reach a wider network of potential customers. Please refer to the Managing Director's Review for more detail on these points. Acquisitions The Board has a current policy of concentrating on organic growth and therefore the Group is not involved in an active acquisition strategy. However, we would consider any exceptional acquisition opportunities that would improve Shareholder value providing they are compatible with our strategic objectives and are reasonably priced in accordance with their profitability and quality of earnings. Current Trading Having produced our management accounts for January and February 2003 and with knowledge of March's sales, we can confirm that the year has begun in line with expectations, although it is too early to state what degree of success the Group will achieve during 2003. However, the current sales interest is at a higher level than at this time last year. The Future We believe that the growth potential of the Group remains substantial, with our software being increasingly capable of delivering considerable benefit to most types of organisation. We are therefore extremely well positioned to achieve significant levels of ongoing growth. Our appreciation towards our customers should, once again, be recorded. Our good relationships with them is a constant advantage and we will continue to concentrate on creating and developing partnerships with our clients at all levels. I am therefore very confident that 2003 will be another successful year. Michael Langmore Chairman 26 March 2003 Managing Director's Review Introduction I am pleased to announce another positive year at Atlantic Global during which we have experienced growth in many aspects of the business. Atlantic was established in 1993 and, since then, we have been developing software products to meet a simple objective - to make our clients more efficient and more competitive. Atlantic's products continue to be chosen by many of the market leaders across a diverse range of industry sectors, confirming the quality and flexibility of the solutions provided. Since the flotation, the Group has developed at an ever-increasing pace and the following summarises our achievements in respect of the introduction of an increased product range, the development of our customer base and our strategy for the future development of sales. Products Our newly branded product Adeo was launched in February 2002, combining our three existing software modules into one seamless product. This has proved very successful, as clients are now able to buy more than one module without having to make two purchasing decisions. Most new installations during 2002 have purchased more than one activation key, thereby increasing the potential licence sales to each client. Since the year-end, new product development contracts have been successfully negotiated with large blue-chip clients providing additional new modules and expanding the functionality of the existing product. These clients agreed to partly fund the development of the new modules in return for participation in the design, whilst the Group has retained the intellectual property rights. This method has proven successful in delivering well-engineered and practical business solutions and we expect to continue to pursue this strategy in the years ahead. We also have a number of new Adeo modules under development, which will be ready for commercial sale by the end of March 2003. In addition we are well advanced on the launch of a significant new enterprise product, which is planned for release at the end of June 2003. Customer profile The Group's products continue to sell in a variety of industry sectors, with additional new sectors being penetrated. Within each sector, we will continue to target the market leaders. Listed below are some of Atlantic Global's customers, the high profile nature of which confirms the strong reputation and high quality of our software solutions and service. Pharmaceuticals Computer & Telecoms Financial & Consulting Other AstraZeneca Limited Colt Telecommunications Plc Allied Irish Bank Genesis Oil & Gas Consultants GlaxoSmithKline Plc Computacenter UK Limited Barclays Bank Plc Metropolitan Police Service GlaxoSmithKline US Pharma Computeraid Services Limited Cap Gemini Ernst & NEC Technologies (UK) Ltd Aventis Pharma Ltd Ericsson Telecommunicatie Young Parkhill NHS Trust Pfizer Limited Hitachi Europe Ltd Cattles Group Plc Scott Tallon Walker UCB Chemicals Identex Continental Reinsurance Architects Intel Ireland Ltd LogicaCMG Serco Technology Interoute Limited Dunnhumby University of Huddersfield Vicorp UK Limited HSBC Actuaries & Vectra N Jones Ltd Virgin Mobile Telecom Ltd Consultants Ltd Waltham Forest Council Xchanging Ltd Norwich Union Raft International Plc Serco Technology Our close working relationship with our customers continues and, as we are developing ourselves, we see our customers, old and new, responding to our improved abilities. We see no reason why this should not continue. People As mentioned in the Chairman's statement our team will always be our greatest asset and we are ensuring that their skills are continually expanded. The Directors continually acknowledge the contribution of our staff in achieving the Company's continued success. Industry partners We are continuing with our efforts to increase our visibility in the market place, by building strong long-term relationships with various organisations from all sectors, including, software, hardware and services. This will increase our visibility and enable cross-selling opportunities between all parties, maintaining our ability to provide a total solution to our customers. Sales Alliances Our ongoing strategy is the creation of new sales alliance partners who will collaborate with our Group to provide software solutions to their clients. We are confident in the ability of our products and our skills and we believe, following our usual, high quality implementation of a solution for a partner that further developments will result. R&D / future markets We are continuing to invest substantial resources in research and development and we will maintain such levels required to keep ourselves at the cutting edge of our industry. Outlook We believe that we have never been more strongly placed within our business than we are today. We feel very confident that we shall continue with our success during 2003 and into the future. Eugene Blaine Managing Director 26 March 2003 Consolidated profit and loss account for the year ended 31 December 2002 Period from Proforma incorporation to (unaudited) 31 December Year ended year ended 2001 31 December 31 December 2002 2001 #000 #000 #000 Turnover 1,551 1,205 741 Cost of sales (624) (350) (208) ------- ------ ------ Gross profit 927 855 533 Administration and establishment expenses (763) (601) (487) Operating profit before goodwill 390 495 287 amortisation and exceptional costs Goodwill amortisation (181) (104) (104) Exceptional costs (45) (137) (137) ------- ------ ------ Operating profit 164 254 46 Interest receivable 71 60 51 ------- ------ ------ Profit on ordinary activities before 235 314 97 taxation Tax on profit on ordinary activities (104) (115) (55) ------- ------ ------ Profit on ordinary activities after 131 199 42 taxation Dividends proposed (114) (104) (104) ------- ------ ------ Retained profit/(loss) for the financial 17 95 (62) period ==== ==== ==== Adjusted earnings per share 1.60p 2.99p 1.93p Basic earnings per share 0.59p 1.36p 0.29p Diluted earnings per share 0.56p 1.24p 0.26p ==== ==== ==== There are no recognised gains or losses during the current year other than the profit for the year. Consolidated balance sheet at 31 December 2002 2002 2001 #000 #000 #000 #000 Fixed assets Intangible assets 3,335 3,516 Tangible assets 63 52 ------ ------ 3,398 3,568 Current assets Debtors 365 329 Cash at bank and in hand 1,897 2,147 ------- ------- 2,262 2,476 Creditors: amounts falling due within one (485) (886) year ------- ------- Net current assets 1,777 1,590 ------- ------- Net assets 5,175 5,158 ==== ==== Capital and reserves Called up share capital 1,137 1,036 Share premium account 1,545 1,121 Shares to be issued reserve - 525 Merger reserve 2,538 2,538 Profit and loss account (45) (62) ------- ------- Equity shareholders' funds 5,175 5,158 ==== ==== Consolidated cash flow statement for year ended 31 December 2002 Year ended Proforma Period from 31 December (unaudited) incorporation 2002 year ended to 31 December 31 December 2001 2001 #000 #000 #000 Cash inflow from operating activities Operating profit before goodwill and 390 495 287 exceptional costs Goodwill amortisation (181) (104) (104) Exceptional costs (45) (137) (137) ------- ------ ------ Operating profit 164 254 46 Depreciation 29 16 11 Loss on disposal of fixed assets 6 - - Goodwill amortisation 181 104 104 Increase in debtors (36) (167) (39) (Increase) / decrease in creditors (186) 226 182 ------- ------ ------ Net cash inflow from operating activities 158 433 304 Returns on investment 72 55 46 Taxation (104) (60) (60) Capital expenditure (47) (48) (42) ------- ------ ------ Free cash flow 79 380 248 Acquisitions and disposals (225) - 404 Equity dividends paid (104) - - ------- ------ ------ Cash (outflow) / inflow before management of liquid resources and financing (250) 380 652 Management of liquid resources and financing 250 (2,050) (2,050) Financing - 1,318 1,495 ------- ------ ------ (Decrease)/ increase in cash in the period - (352) 97 ==== ==== ==== Reconciliation of net cash flow to movement in net funds (Decrease)/ increase in cash in the period - (352) 97 Cash (inflow)/outflow from increase in liquid (250) 2,050 2,050 resources ------- ------ ------ Movement in net funds in the period (250) 1,698 2,147 Net funds at the start of the period 2,147 449 - ------- ------ ------ Net funds at the end of the period 1,897 2,147 2,147 ==== ==== ==== Notes 1. Basis of preparation The accounts have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules, and cover the year ended 31 December 2002. The comparative figures cover the 308 day period from 26 February 2001, the date of incorporation to 31 December 2001. In order to enable useful comparison of the Group's performance proforma information has been included in this Annual Report. The proforma results for the twelve months ended 31 December 2001 represent the actual consolidated results of the Group from its date of incorporation plus the results of Atlantic EC Limited from 1 January 2001 until its acquisition by the Company. The financial information set out above does not constitute the Company's statutory accounts for the periods ended 31 December 2002 or 31 December 2001. Statutory accounts for 2001 have been delivered to the Registrar of Companies, whereas those for 2002 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain a statement under Section 237(2) or (4) of the Companies Act 1985. 2. Income recognition Income from the sale of software licences is recognised only when the software is installed. Income from chargeable services including consultancy, customisation and development is recognised as these services are delivered. Support income is recognised over the life of each support contacts. 3. Research and development expenditure Expenditure on research and development is written off against profits in the period in which it is incurred. 4. Taxation The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19. 5. Dividends Year ended Proforma Period from 31 December (unaudited) incorporation 2002 year ended to 31 December 31 December 2001 2001 #000 #000 #000 On ordinary shares of 5p Final proposed: 0.5p 114 104 104 ==== ==== ==== 6. Earnings per share Year ended Proforma Period from 31 December (unaudited) incorporation 2002 year ended to 31 December 31 December 2001 2001 #000 #000 #000 Profit after tax 131 199 42 Adjustments Goodwill amortisation 181 104 104 Exceptional items 45 137 137 ------- ------ ------ Adjusted profits 357 440 283 ==== ==== ==== Number Number Number 000 000 000 Weighted average number of shares in issue 22,281 14,685 14,685 Dilutive effect of deferred consideration shares to be issued in respect of 2001 - 1,422 1,422 Dilutive effect of share options and warrants 1,298 - - ------- ------ ------ Fully diluted weighted average number of shares in issue 23,579 16,107 16,107 ==== ==== ==== Basic earning per share (based on profit after tax) 0.59p 1.36p 0.29p Fully diluted earnings per share (based on profit after tax) 0.56p 1.24p 0.26p Adjusted earnings per share (based on adjusted profits) 1.60p 2.99p 1.93p 7. Free cash flow Free cash flow represents the amount of cash generated and useable to the advantage of the Company's shareholders either in the form of dividends or for acquisitions that will enhance the company's net worth. 8. Copies of Atlantic Global Report and Accounts Copies of the interim and annual reports of the Company are available from: * Mr R Hutton, Finance Director & Company Secretary, Atlantic Global Plc, Maple House, Woodland Park, Chain Bar, Cleckheaton, BD19 6BW * Website address: www.atlantic-global.net * Email: info@atlantic-global.co.uk This information is provided by RNS The company news service from the London Stock Exchange END FR NKAKKOBKDFNB
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