We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Name | Symbol | Market | Type |
|---|---|---|---|
| RYB Education Inc | NYSE:RYB | NYSE | Depository Receipt |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.6912 | 0 | 01:00:00 |
Hot Features
Premium
RNS Number:2522H
Royalblue Group PLC
10 February 2003
10th February 2003 1
royalblue group plc - final results
preliminary announcement for the year ended 31st December 2002
royalblue reports organic growth in difficult market conditions with major new
deals signed.
Highlights
* revenue increased to #57.0 million from #56.2 million*.
* fidessaNet service rental revenues up 130% to #4.4 million, fidessa
software product rentals up 73% to #12.4 million.
* recurring revenue up 51% to #22.0 million representing 39% of total
revenue (2001: 26%).
* pre-tax profits (pre-exceptional gains) up 6% to #8.9 million (2001:
#8.4 million*).
* diluted earnings per share increased 11% to 19.7p, from 17.8p*.
* dividend per share increased to 5.3p from 4.8p*, up 10%.
* major new orders signed with Bear Stearns & Co. Inc. and Royal Bank
of Canada for US domestic (OTC) trading systems.
* 8 fidessaNet orders signed.
* substantial ongoing investment in product development, 18% of staff
dedicated to this activity.
* launch of the new fidessa workstation and connectivity strategy.
* strong cash generation with balances nearly doubling to #22.7
million.
1. In order to bring clarity to the performance of the continuing business of
the Group the table above excludes the results of royalblue technologies which
was divested on 16th July 2001. The full Consolidated Profit & Loss Account can
be found on page 11 of this announcement.
Reviewing 2002, Chief Executive, Chris Aspinwall, said:
"2002 was an extremely challenging year for both the financial and technology
sectors. Despite the market conditions, we have made progress with revenues,
operating profit and EPS increasing over last year. The shift in the profile of
our business noted in the first half continued into the second half of 2002. As
a result, we have experienced a reduction in consultancy revenue of just under
7% whilst combined fidessa rental fees and fidessaNet service fees have
increased by 85% in aggregate. As a result, recurring revenues continue to
represent an increasing proportion of our business at 39%, up from 26% last
year.
The business has remained strongly cash generative during the year with cash
balances nearly doubling to #22.7 million. Of this increase, #4.2 million was
attributable to the sale of our holding in ICIS Technology Limited and loan note
repayment from our divested help desk business, Touchpaper Limited. The Group
remains debt free.
Despite the market conditions, we have continued to receive orders for new
software both from large international players and also from small specialist
houses. In particular, we have signed agreements, worth a combined total of
nearly $20 million over five years, with Bear Stearns & Co. Inc. and Royal Bank
of Canada for US domestic trading systems. These deals represent a further
landmark in the development of our business in the critical North American
market and we continue to see this market as a strong source of potential
growth.
Our fidessaNet service has continued to attract interest with eight new deals
signed, five of these in the US. In addition, we have seen strong demand for our
fidessaNet connectivity services with orders for these connectivity services
coming both from fidessaNet customers and existing enterprise customers2.
Throughout the year we have maintained our commitment to product development and
have continued to dedicate a substantial proportion of our staff to this
activity. As a result, we are now in the process of launching a number of new
and exciting products, including the fidessa workstation, and these will enable
us to target additional markets in the future."
On the outlook for 2003, Chris Aspinwall added:
"Looking ahead, we expect that the current difficulties in the financial markets
will continue into 2003. However, we do believe that we will see an improvement
once the capital markets themselves begins to improve. In the short term,
despite the conditions, we are still finding new sales opportunities in the UK,
Europe and North America, particularly with our fidessaNet service and US
product set. Although impossible to predict, we see no reason to expect any
further fall in consultancy revenues to be significantly different to that
experienced in 2002 and overall we believe that this fall should be more than
offset by the growing recurring revenues from software rentals and the
fidessaNet service.
Overall, therefore, we expect that some modest growth for the year is possible
for both revenue and profits in 2003. However, we believe the split between H1
and H2 is more likely to revert to the Group's previous pattern of marginally
higher revenues in the second half of the year.
In summary, we feel that whilst the challenging market conditions will make
forecasting extremely difficult in the short term, the underlying strength of
our business, our continued investment in new products and our standing in the
global markets gives us a good position for progress in the medium term. In
addition, the financial strength of the Group gives us a strong position to
benefit from investment opportunities that arise because of the sustained
downturn whether these take the form of development of new products or
acquisition activity.
Finally, I would like to extend our thanks to all of royalblue's employees for
all their efforts during 2002 and in showing the dedication and commitment
required to make progress in the current extremely difficult markets".
2 Customers running fidessa software in their own data centres.
review of 2002
Financial Summary
Revenue has increased by 1% to #57.0 million (2001: #56.2 million) with 53% now
coming from overseas (2001: 47%). In 2002 we have seen revenues increase by 130%
from fidessaNet services and by 73% from fidessa software rentals whilst
revenues from consultancy have declined by 7%. The quality of Group revenues
continues to strengthen with the recurring revenues from software rental,
fidessaNet services and maintenance accounting for 39% of the total, up from 26%
in 2001 and 18% in 2000. In addition to these recurring revenues, a substantial
proportion of the 58% of revenue from consultancy is repeat business from our
existing customers.
Operating profit increased 2% to #8.2 million (2001: #8.1 million) with the
operating margin maintained at 14.4%. In July 2002 we announced the sale of our
minority holding in ICIS Technology Limited, which generated a one-off gain of
#3.7 million, and the first #0.5 million of loan note repayment from Touchpaper
Limited, the help desk business divested in 2001. Both of these gains are
treated as exceptional items in the period. In addition, the interest income
was boosted by #0.2 million from interest received on the Touchpaper loan notes.
The diluted earnings per share (excluding exceptional items) increased by 11% to
19.7p (2001: 17.8p). The growth in earnings per share has benefited from the
lower effective tax rate of 29.9% compared to 32.2% for 2001. The tax rate has
decreased in the year because of tax incentives in New York following the
disaster of September 11th and R&D tax credits in the UK.
The cash balance increased in the year to #22.7 million from #11.7 million, an
increase of 94%. The exceptional gains mentioned above contributed #4.2 million
of the increase with the remaining #6.8 million coming from ordinary trading
operations. The improvement was achieved after spending #1.8 million (2001: #3.3
million) on capital expenditure, #1.5 million (2001: #1.3 million) on dividends
and #2.8 million (2001: #2.0 million) on corporation tax.
The directors are recommending a final dividend of 3.55p per share so that the
total dividend per share for 2002 amounts to 5.3p, an increase of 10%. Subject
to shareholder approval, the final dividend will be paid on 12th May 2003 to
shareholders on the register on 11th April 2003.
Operations
Overview
As widely experienced by all companies trading in the financial markets,
conditions have remained challenging throughout 2002 as our customers have
experienced some of the toughest trading conditions they have seen. However,
despite these conditions we have continued to make new sales and increase our
software rental and fidessaNet revenues, and this strong growth has compensated
for the inevitable pressure on consultancy revenues.
In the markets themselves, we have seen some evidence that the number of orders
processed by individual customers has dropped, although the total order volume
processed within fidessaNet increased sharply (nearly three times last year's
level) due to new systems coming on line. The trend we have seen in the past of
more executions associated with each individual order has continued and our
clients are generally seeing more executions despite lower order levels. This
trend does act as a driver for all fidessa products as the need to handle
increased volumes of executions at the same time as reducing costs inevitably
pushes firms towards automation. Across all regions we are still seeing
increased demand for our connectivity software providing links to exchanges,
ECNs and the buy-side institutions and we believe that this demand will continue
as firms look to reduce the cost of handling order flow.
We are also seeing steady demand for our fidessaNet service where the full
service model can provide short term cost benefits and we have signed eight new
orders in the period, with a total expected value of #5.7 million over two
years. In addition, we have received orders for fidessaNet connectivity services
where both fidessaNet and enterprise customers connect to exchanges and buy-side
firms and other parties through royalblue's network and data centres. Including
connections sold as part of full fidessaNet implementations, the total number of
connections ordered through fidessaNet in 2002 was in excess of 100. As a result
of recent orders, the UK fidessaNet operation achieved break-even six months
earlier than anticipated, whilst the US fidessaNet operation is still on plan to
achieve break-even by the end of 2003.
Within the enterprise business, we have seen continued activity as we roll out
more software. This has been particularly focused on supporting the many
exchange upgrades, market changes, more connectivity services and routing of
order flow across national boundaries. We have also signed three significant
rental deals. One, with the Royal Bank of Canada, is for a US domestic trading
system and includes connectivity to the Canadian market. This deal is expected
to be worth around $11 million over five years. The second is a renewal for ABN
Amro covering their global operation and including a new implementation of
fidessaNet for their US domestic trading operation. This second deal is expected
to be worth #8.2 million over two to three years. The third is a deal to supply
Bear Stearns & Co. Inc. with the fidessa trading platform for their US domestic
business. The system will provide support for Bear Stearns' OTC domestic trading
operation and is the first sale of royalblue's new fidessa V5 products in the US
market. The deal, which is on an enterprise rental basis, is expected to be
worth around $8 million over five years. Our ability to sign these deals, worth
a combined total of over #20 million, despite the current market conditions,
provides further proof of the value fidessa products can bring to the largest
enterprise businesses.
Europe
In Europe we have signed three further deals for our fidessaNet trading
platform. This brings the total number of customers connecting to the fidessaNet
service in the UK to 16. As our first rental and fidessaNet contracts have come
up for renewal, we are pleased that all contracts have been renewed. This has
resulted in the signing of a major renewal with ABN Amro and the signing of two
fidessaNet renewals. Whilst we believe it is likely that a small number of our
customers may decide to pull out of equity trading altogether, it has been
pleasing that to date all fidessaNet customers and enterprise rental customers
have renewed on terms substantially similar to their original agreements. We
have also signed our first licence conversion deal with Dresdner Kleinwort
Wasserstein (DrKW). This deal transfers DrKW's software from its original
one-off licensed basis to the new rental model and gives DrKW access to the
latest versions of the fidessa software. We are continuing to discuss with other
customers, who signed one-off licence deals prior to 2000, the benefits of
switching across to the new rental model.
Support for exchange upgrades continued to be a significant activity during
2002, particularly during the first half, with upgrades required for Xetra,
Virt-x, Euronext (for Paris, Amsterdam and Brussels), Stockholm, Helsinki,
Copenhagen, Oslo, Milan and the London Stock Exchange. In total over 60 customer
gateway upgrades were performed. After a slight pause in the second half of
2002, activity has resumed with a number of exchanges planning upgrades to their
systems. These include the introduction of the central counterparty for Xetra, a
new release for the London Stock Exchange, the launch of NASDAQ Deutschland and
upgrades for Copenhagen, Helsinki, Milan, Oslo, SWX, Stockholm and Virt-x
exchanges. An increasing number of customers are now taking connectivity through
fidessaNet rather than running the gateways themselves on their own site. This
generates cost savings for our customers by removing the significant operational
management, testing and conformance requirements that they would otherwise incur
with each connection that they have. As a result we have expanded our capability
and now offer 14 exchange gateways and 10 buy-side interfaces within the
European fidessaNet service.
As mentioned at the time of the interims, we do not believe that we will see
customers placing orders for complete global systems whilst the current market
conditions persist. However, we have worked with three customers based in Europe
to implement multiple centre solutions to support position keeping, order
routing or trading functions across two or more national boundaries. We
anticipate that we will continue to see global systems implemented in stages in
this way.
North America
In the US, our business has continued to develop, despite the market conditions,
with revenues up by 17% and a good pipeline still in place. As highlighted
earlier, during the year we have signed two major orders for US domestic trading
systems for enterprise customers, one with Royal Bank of Canada and the other
with Bear Stearns & Co. Inc. In addition, we have signed a further five orders
for fidessaNet to provide US domestic support. These orders firmly establish
fidessa as the second most widely used order management system in the US
domestic market, an important milestone from which to build further growth.
Activity during 2002 was focused around structural change in the NASDAQ market,
new products and also the common theme of electronic connectivity that we are
seeing across all markets. SuperMontage, the new combined order and quote driven
market implemented by NASDAQ went live during a phased rollout from July to
December. This represented a major structural change to trading on the NASDAQ
market and required substantial new software to support the new business
activities. Support for this new way of trading was implemented within
royalblue's fidessa NMS product and went live smoothly and on schedule. As a
direct result of the success of this implementation, we have seen a marked
increase in interest for our US product set and expect that this will continue
into 2003.
In parallel with the introduction of SuperMontage, we also identified a related
opportunity to package SuperMontage functionality together with a price point
consolidated order book which enables traders to find the best price and depth
across multiple markets and liquidity points. This has become increasingly
important as order flow has fragmented across the order books provided by the
major ECNs such as Island, Instinet and Archipelago. This has been launched as a
new product, fidessaMontage, which not only provides the trader with an
integrated view but also enables him to hit the market and take the best price
regardless of which market he is on. This product has now gone live at a number
of our customers' sites and we have also developed a repackaged version of the
product as a standalone workstation. The standalone version diversifies our
product offering and also gives us a lower cost delivery model.
We have completed a number of deliveries of the US version of our CTAC middle
office product. This product is used for confirming trades and allocating
executions against client orders and is an invaluable tool in speeding up the
settlement process by catching and eliminating mis-matched trades and preventing
incorrect customer allocations. This product also offers the opportunity for
substantial cost savings by improving the processing efficiency of the middle
office and has been instrumental in supporting high trading volumes across a
number of our customers.
Connectivity both to liquidity points, such as exchanges and ECNs, and to
buy-side customers is becoming increasingly important throughout all our
markets. During 2002 we developed further links to connect the major buy-side
firms to broker-dealers and now have connectivity to six of the major buy-side
networks as well as direct connection to three major firms. This means we can
now receive order flow from in excess of 300 buy-side firms.
Asia
Throughout Asia, the markets have remained difficult.
In Japan, the stock market has remained sluggish and some foreign banks
discontinued Japanese trading operations. However, the Japanese government's
introduction of a new program to stabilise the banking system will require, from
1st April 2003, major Japanese banks to meet a new capital adequacy standard
while at the same time divesting themselves of accumulated cross-holdings of
shares in affiliated firms. This has led to extraordinarily high institutional
order volumes, traded under heavy selling pressure. The speed and capacity of
fidessa has been critical in enabling our clients in Japan to execute their
business plans while managing the market impact of their own trading. The
extension of fidessa's performance in V5 is already being incorporated by some
of our customers in their future plans. We have enhanced our Japanese Market
Interface System (JMIS) to support direct connections to all the key Japanese
markets: Tokyo, Osaka, Jasdaq and TostNet. These direct interfaces allow us to
offer a faster and more cost-effective solution to our customer base than
connecting to the exchanges via third party gateways, which is the only current
solution. For these direct interfaces to be widely adopted they must also
support Convertible Bonds and Futures and Options products which can be traded
on the Japanese markets and this development work is well advanced.
In the rest of Asia, a number of clients are now live on the Korean market via
AMMA (Asian Multi Market Access) and during the year an interface to the Korean
Futures and Options market also went live. Support for the Singapore exchange
was added to AMMA this year and is now live which means that we can provide
connectivity for trading on all the major exchanges within the region. As in
Europe, there has been significant activity throughout Asia providing support
for cross border order flows. We have now rolled out fidessa software across a
number of our customers' Asian offices and as a result have trading workstations
installed in the majority of the region's financial centres including Hong Kong,
Japan, Singapore, Taiwan, Korea, India, Malaysia, Thailand, Philippines,
Australia and New Zealand.
Product Development
Throughout the year we have maintained our commitment to product development and
have continued to dedicate a substantial proportion of our staff to this
activity.
In addition to the numerous new developments and extensions to the product set,
we have also commenced the rollout of the new V5 product set. The fidessa V5
product set is based on the next generation database technology which provides a
number of important enhancements including, high speed indexing and a 64 bit
architecture delivering substantial performance improvements on all systems and
much better scalability for very large systems. Maximum order and execution
throughput is increased by more than 10 times on the new platform. The data
footprint has also been substantially reduced which, combined with performance
improvements, means that smaller hardware can be used to run the same
applications. This provides benefits to enterprise customers reducing the cost
of operating fidessa and also reduces royalblue's cost of operating the
fidessaNet service. The new V5 product consists of a new version of the core
trading platform and new versions of each of the trading applications. The V5
product set is being delivered as a gradual rollout and compatibility is being
maintained between V5 products and the current product set. The first phase of
this, OMAR V5, our core order management product, rolled out on schedule during
summer 2002. This upgrade not only took advantage of the new performance
features of V5 but also provided comprehensive re-engineering of the order
management model to provide support for truly global order flows and for order
grouping at both a sales and trading level. These features enable users to
manage their work much more efficiently by working whole groups of orders in
single actions.
The V5 programme continues this year with a 5.1 release of OMAR which will
coincide with the first release of the TMAR (Trade Management & Routing) and
PMAC (Position Management and Consolidation) products on the new architecture.
This release is targeted to address the requirements of the US markets and will
mean that we are able to deliver solutions to the US market with a core platform
based on the new technology.
We are also leveraging the performance and scalability provided by OMAR V5 to
implement full support for basket trading. This is an exciting new business
area which has grown as a result of increased volatility in the markets and a
drive for firms to manage their cost base by consolidating their cash and
program trading businesses on a single platform. Traditionally, because of the
performance level required to undertake basket trading (peak performance of
around 1,000 orders per second is required), it has been done by specialist
applications which do not participate in a firm's order flow. Using the new V5
architecture we are able to meet the demanding performance requirements from
inside the global order management system providing a much more integrated
solution. The first release of this new product will address the core
requirements of both sales users (basket creation and entry) and traders (wave
creation and management) to manipulate baskets.
In the US we are developing software to provide access to comprehensive market
data from all the different points of liquidity across the US. This product
called DANA (Data Access North America), will integrate price data feeds from a
variety of sources including NASDAQ, NYSE, AMEX, and the ADF (Alternate Display
Facility). We are also continuing the development of our Canadian market access
product (CAMA). This is based on the same technology used within our European
market access product and will provide direct access to all the key Canadian
markets. CAMA is scheduled for delivery in Q2 2003.
fidessaExpress is a new product which is being developed based on fidessa
real-time technology and the FIX protocol to provide simple connectivity between
a range of different services which may be hosted at an enterprise level or
within fidessaNet. The first release of fidessaExpress is planned for early Q2
2003 and will simplify buy-side connectivity into fidessaNet enabling the
routing of order flow, indications of interest (IOIs) and trade advertisements
between any connected buy-side and broking firms using fidessaNet. Additional
services are already planned to leverage the fidessaExpress architecture.
European market connectivity through EMMA has continued to develop rapidly over
the year. Overall EMMA now connects directly to 16 markets: London, Paris,
Brussels, Amsterdam, Frankfurt, Vienna, Ireland, Copenhagen, Oslo, Stockholm,
Helsinki, Milan, NASDAQ Europe (Deutschland), Zurich and Virt-x. Johannesburg
is also supported via EMMA. The NASDAQ Europe interface was also introduced
this year and required significant product change, being the first European
market to provide a hybrid market supporting a combination of quote and order
book trading models.
fidessaNet
Our fidessaNet operation has continued to make progress with service revenue
increased in excess of 100% over last year. We have continued to experience
demand for the fidessaNet service and have signed eight additional orders for
the full service offering. Connectivity services within fidessaNet have
generated strong interest and including connections sold as part of full
fidessaNet implementations, the total number of connections ordered through
fidessaNet in 2002 was in excess of 100.
Implementation was completed for 6 new full service fidessaNet clients and, with
the systems currently being implemented, the total number of fidessaNet trading
workstations now stands at 570. The average volume processed per month by
fidessaNet during the 2002 was 73,000 orders with 230,000 executions. This
represents an increase of almost three times the level of orders recorded
through the service in 2001 and four times the level of executions.
Connectivity was added to the Helsinki Stock Exchange, the Chicago Stock
Exchange, the Boston Stock Exchange and the Bloomberg ECN. A number of
electronic buy-side interfaces have been made available including connectivity
to the major buy-side networks with links to the Indications of Interest (IOI)
services also available.
As its clients tend to be smaller firms, fidessaNet is most at risk from a
client deciding to leave the equity markets. However, the pipeline for
fidessaNet continues to be strong in both the UK and the US and we anticipate
further progress in 2003.
fidessa workstation
The workstation is a major new development which will provide users with a very
cost-effective service for real-time prices, historic prices, VWAP, News,
company fundamentals, FTSE and world indices as well as trading functionality,
access to RSPs (Retail Service Providers) and connectivity to order flow. The
fidessa workstation will address an important segment of the market where the
principal requirement is for market data with access to transactional capability
required less often. The potential customers for this product will be additional
users within existing fidessa and fidessaNet sites who do not require access to
the full fidessa system, users within the retail broking community and also
customers on the buy-side. The fidessa workstation will be integrated within the
fidessaExpress family and will include support for sending and receiving FIX
based order flow via fidessaNet.
The product has been designed and built very rapidly by reusing existing fidessa
technology on the client and server and our existing market data feeds. Because
the workstation is based on existing fidessa technology, this means that we are
able to expand our transaction-based services to workstation users in an
integrated fashion. This will enable workstation users to quickly gain access to
a huge range of new services not previously offered on workstation type
products.
Share Bonus Scheme
Historically, the Company has rewarded the contribution that the senior staff
and directors have made by paying cash bonuses. As a result, in the main, these
individuals have not been granted share options since the flotation of the
Company in June 1997. The Remuneration Committee believes that, in addition to
paying cash bonuses, these individuals should be incentivised and, importantly,
retained by more closely aligning their interests with those of shareholders.
In order to achieve this, shareholder approval will be sought at the forthcoming
Annual General Meeting for the royalblue group plc Share Bonus Plan which
provides that participants be offered the opportunity to acquire, using their
own funds, shares in the Company up to a certain value. Provided the
participants hold the shares for three years they will be matched with an
equivalent number of free shares in the Company in the form of a Share Bonus.
Rather than issuing new shares, these shares will have been purchased by the
Company from the market prior to issue. The principal features of the Plan will
be circulated to shareholders with the Notice of the 2003 Annual General
Meeting.
Use of Cash
As our cash levels grow, we continually review the most effective ways to
utilise the available cash balances. Whilst present market conditions persist,
we are clear that maintaining a strong cash balance is an extremely valuable
asset and gives us the flexibility to take advantage of opportunities that may
arise as a result of the sustained downturn.
We anticipate that such opportunities may take the form of acquisitions or the
opportunity to enter a new market by developing new software. In the latter
case, this is also likely to involve recruiting teams with experience in the
target market and these teams may themselves be more readily available because
of the downturn. In many situations both the acquisition route and the
opportunity to develop ourselves might be available. In these cases a decision
in favour of developing the new business ourselves could be less expensive for
the Group, but may result in a greater short term impact on profits compared to
spreading any goodwill on acquisition over a longer period. This is the case
with our recent entry into the data workstation market. We consider this to be a
strategic market that will assist in the development of our fidessaNet business.
It will also assist in the development of the connectivity network and will make
fidessa services still more widely available to the financial community. We
investigated the possibility of acquisitions in this area but considered that
the prices being asked were too high. For this reason we commenced development
of our own fidessa workstation software during 2002 and have put in place a team
of four dedicated staff with comprehensive experience of this market to handle
the sales and business development of this particular opportunity. As we can
absorb the majority of the required software development into our existing
product schedules and the operation of the service within our fidessaNet data
centres, we anticipate that the direct cost of funding this opportunity will be
approximately #1.3 million in 2003. This funding will be expensed through the
profit and loss account as incurred.
Although we have no immediate plans to make use of it, we also intend to seek
shareholder approval at the forthcoming Annual General Meeting to purchase up to
15% of the company's equity for cancellation. The Board believes it is prudent
to have this facility in place.
Outlook
Looking ahead we anticipate a mixed outlook with difficult market conditions in
the short term and good growth prospects in the long term. Paradoxically, the
difficult market conditions are themselves creating new market opportunities.
In the short term we expect that the current difficulties in the financial
markets will continue into 2003. Despite the current conditions, we are still
finding new sales opportunities in the UK, Europe and North America,
particularly with our fidessaNet service and US product set. Although impossible
to predict, we see no reason to expect any further falls in consultancy revenues
to be significantly different to that experienced in 2002 and overall we believe
that this fall should be more than offset by the growing recurring revenues from
software rentals and the fidessaNet service. However, we do believe that we will
see an improvement once the conditions in the capital markets begin to improve.
Although the timing of such an improvement is impossible to predict, we believe
the improvement will benefit the strong niche suppliers such as royalblue the
most.
Overall, therefore, we expect that some modest growth for the year is possible
for both revenue and profits in 2003. However, we believe the split between H1
and H2 is more likely to revert to the Group's previous pattern of marginally
higher revenues in the second half of the year.
Throughout the year we have maintained our commitment to product development and
have continued to dedicate a substantial proportion of our staff to this
activity and are developing more new and exciting products than ever before.
These include products such as the fidessa workstation, fidessaExpress, basket
trading and North American Data Access. The opportunity to develop some of these
products stems in part from the current difficult conditions. These
opportunities are presented to us, either because existing vendors are
withdrawing from the market or because customers are looking to reduce their
costs and either want to replace specialist products or wish to outsource more
of their applications.
In summary, we feel that whilst the challenging market conditions make
forecasting extremely difficult in the short term, the underlying strength of
our business, our continued investment in new products and our standing in the
global markets gives us a good position for progress in the medium term. In
addition, the financial strength of the Group gives us a strong position to
benefit from investment opportunities that arise because of the sustained
downturn whether these take the form of development of new products or
acquisition activity.
enquiries:
John Hamer, Chairman
Chris Aspinwall, Chief Executive Edward Bridges, Financial Dynamics
Andy Malpass, Finance Director Ben Way, Financial Dynamics
www.royalblue.com Tel: 0207 269 7145
Tel: 01483 206300 Fax: 01483 206301 Fax: 0207 831 6341
Consolidated Profit and Loss Account
for the year ended 31st December 2002
2002 2001 restated
(note1)
Note #'000 #'000
Turnover 3
Continuing operations 57,006 56,174
Discontinued operation - 10,079
--------- ---------
57,006 66,253
Operating profit/(loss) 4
Continuing operations 8,226 8,096
Discontinued operation - (1,550)
--------- ---------
8,226 6,546
Exceptional items
Sale of associated undertaking 6 3,683 -
Sale of discontinued operation 6 500 (2,658)
--------- ---------
Profit on ordinary activities before interest 12,409 3,888
Net interest receivable 610 309
Income from other fixed asset investments 39 -
--------- ---------
Profit on ordinary activities before taxation 13,058 4,197
Taxation on profit on ordinary activities (2,638) (2,145)
--------- ---------
Profit for the financial year 10,420 2,052
Dividends paid and proposed 7 (1,591) (1,396)
--------- ---------
Retained profits for the period 8,829 656
--------- ---------
Earnings per ordinary 10 pence share 8
Basic - continuing operations, pre-exceptional 21.2p 19.8p
gain
Diluted - continuing operations, pre-exceptional 19.7p 17.8p
gain
Basic - total operations 35.4p 7.1p
Diluted - total operations 32.9p 6.4p
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31st December 2002
2002 2001 restated (note1)
#'000 #'000
Profit for the financial year 10,420 2,052
Differences on exchange on re-translation of net assets
of overseas undertakings (376) 44
Prior year adjustment 1,033 -
--------- ---------
Total recognised gains and losses 11,077 2,096
--------- ---------
Consolidated Balance Sheet
at 31st December 2002
2002 2001
restated
(note1)
Note #'000 #'000 #'000 #'000
Fixed assets
Tangible fixed assets 4,705 6,019
Investment - 49
Investment in own shares 2,196 2,351
6,901 8,419
Current assets
Debtors 9 14,761 16,596
Cash and short term investments 22,676 11,674
--------- ---------
37,437 28,270
Creditors: amounts falling due within one 10 (16,799) (17,648)
year
Net current assets 20,638 10,622
--------- ---------
Total assets less current liabilities 27,539 19,041
Creditors: amounts falling due after more
than one year (442) (493)
--------- ---------
Net assets 27,097 18,548
--------- ---------
Capital and reserves
Called up share capital 3,142 3,046
Share premium account 11,580 9,953
Profit and loss account 12,375 5,549
--------- ---------
Total equity shareholders' funds 11 27,097 18,548
--------- ---------
Consolidated Cash Flow Statement
for the year ended 31st December 2002
2002 2001
Note #'000 #'000 #'000 #'000
Net cash inflow from operating activities 12 11,957 9,721
Returns on investments and servicing of finance
Interest received 632 311
Interest paid (22) (2)
Income from other fixed asset investments 39 -
Net cash inflow from returns on investments
and servicing of finance 649 309
Taxation
United Kingdom tax paid (1,378) (876)
Overseas tax paid (1,403) (1,106)
Tax paid (2,781) (1,982)
Capital expenditure and financial investments
Purchase of tangible fixed assets (1,779) (3,287)
Sale of tangible fixed assets 50 26
Sale of own shares held by Employee Benefit Trust 155 181
Sale of fixed asset investment 3,683 -
Repayment of loan notes 500 -
Purchase of fixed asset investment - (142)
Purchase of loan notes - (898)
Net cash inflow/(outflow) for capital expenditure
and financial investments 2,609 (4,120)
Acquisition and disposal
Costs of disposal - (1,276)
Net cash (outflow) for acquisition and disposal - (1,276)
Equity dividends paid (1,452) (1,354)
--------- ---------
Net cash inflow before use of liquid resources
and financing 10,982 1,298
Management of liquid resources
Cash taken off/(placed on) deposit 2,150 (1,000)
Financing
Share options exercised 96 33
Net cash inflow from financing 96 33
--------- ---------
Increase in cash 13,228 331
--------- ---------
Notes
1 The results for the years ended 31st December 2002 and 31st December 2001
are extracted from the audited accounts of royalblue group plc on which the
auditors have issued an unqualified opinion which did not contain a statement
under Section 237 (2) or (3) of the Companies Act 1985.
In December 2000 the Accounting Standards Board published Financial
Reporting Standard 19 Deferred Tax. Compliance with the new standard is
mandatory for accounting periods ending on or after 23rd January 2002 and the
standard has been adopted in the preparation of these financial statements.
Comparative figures have been restated. The restated figures solely relate to
the adoption of this standard.
2 The audited accounts for the year ended 31st December 2001 have been
delivered to the Registrar of Companies. The Annual Report and Financial
Statements for the year ended 31st December 2002 will be mailed to shareholders
on 3rd March 2003 and will be delivered to the Registrar of Companies following
the Annual General Meeting which will be held at 10.00 am on Thursday 3rd April
2003 at 2 Suffolk Lane, London. Copies will be available to the public at the
Company's registered office, Dukes Court, Duke Street, Woking, Surrey GU21 5BH.
3 Turnover, all of which relates to the group's principal activity of
developing and selling computer software and providing associated services, is
analysed by geographical destination as follows:
2002 2001 2001 2001
#'000 #'000 #'000 #'000
Continuing Discontinued Total
operations operation operations
United Kingdom 26,534 29,674 7,896 37,570
USA and Canada 18,465 15,810 1,758 17,568
Continental Europe 3,755 2,179 425 2,604
Rest of World 8,252 8,511 - 8,511
--------- --------- --------- ---------
57,006 56,174 10,079 66,253
--------- --------- --------- ---------
4 Operating profit
2002 2001 2001 2001
#'000 #'000 #'000 #'000
Continuing Discontinued Total
operations operation operations
Turnover 57,006 56,174 10,079 66,253
Cost of sales 55 - 330 330
Staff costs - salaries 29,556 28,211 6,217 34,428
Staff costs - social security 2,780 2,734 723 3,457
Depreciation 2,876 2,442 589 3,031
Goodwill amortisation - - 17 17
Auditor's remuneration for the company 28 23 - 23
Auditor's remuneration for other companies
in the group 82 82 - 82
Fees paid to auditor for non-audit related 66 67 - 67
work
Other operating leases 37 31 173 204
(Profit)/loss on sale of tangible fixed (7) (4) 7 3
assets
Exchange (gains)/losses 394 36 (163) (127)
Share options granted at less than market - 46 - 46
price
Other operating expenses 13,776 14,784 3,736 18,520
Other income (863) (374) - (374)
--------- --------- --------- ---------
Operating expenses 48,780 48,078 11,629 59,707
--------- --------- --------- ---------
Operating profit/(loss) 8,226 8,096 (1,550) 6,546
--------- --------- --------- ---------
5 Staff numbers
The average number of people employed by the group, including executive
directors, during the year was as follows:
2002 2001 2001
Number Number Number
Continuing Total
operations operations
United Kingdom 324 307 417
USA 145 131 148
Continental Europe 1 3 9
Rest of World 46 40 40
----- ----- -----
516 481 614
----- ----- -----
The number of people employed by the group, including executive directors,
at the end of the year was as follows:
At 31st At 31st
December 2002 December 2001
Number Number
United Kingdom 312 337
USA 141 148
Continental Europe 1 4
Rest of World 44 46
----- -----
498 535
----- -----
6. Exceptional items
In July 2001 the royalblue technologies help desk and rostrvm business was
divested, the business subsequently changing its name to Touchpaper. As part of
the transaction Touchpaper issued to royalblue 'B' Loan Notes with a principal
amount of #3,802,245 in order to re-finance inter-company facilities and 'A'
Loan Notes with a principal amount of #897,755 to provide additional working
capital. The 'B' Loan Notes are unsecured and repayable first and the 'A' Loan
Notes are secured by way of a fixed and floating charge over the assets of
Touchpaper. The value of the unsecured loan notes, as well as the shares and
warrants, received from the divestment will not be recognised in the balance
sheet until there is evidence that they will be redeemed or repaid within a
reasonable period. During the year the first scheduled repayment of the
unsecured loan occurred and provided an exceptional gain of #500,000.
On 4th July 2002 the Group disposed of its trade investment in ICIS
Technology Limited. ICIS was formed in 1989 as an operating division of
royalblue. Following a strategic review of its operations in 1992, royalblue
divested the business by means of a buy-out, backed by the ICIS management team,
and retained a minority shareholding. Since that date royalblue had no
operational involvement in the business and treated its holding as a trade
investment at cost. The disposal generated an exceptional profit of #3,683,000.
#'000
Sale of shareholding in ICIS Technology Limited
Proceeds 4,100
Book value of investment in shares (49)
Costs of sale (368)
---------
Profit on sale 3,683
---------
7 The total dividend of 5.3p per share (2001: 4.8p) comprises an interim
dividend of 1.75p per share which was paid on 30th September 2002 and a final
dividend of 3.55p per share which will be paid on 12th May 2003, when approved,
to shareholders on the register on 11th April 2003.
8 Earnings per share
The calculation of basic earnings per share is based on attributable
profit of #6,237,000 for continuing operations, pre-exceptional gain and
attributable profit of #10,420,000 for total operations (2001: #5,700,000 for
Continuing Business and #2,052,000 for Total Business) and divided by 29,400,726
shares (2001: 28,851,677 shares). The number of shares is based on the weighted
average number of shares in issue during the year less the shares owned by the
royalblue group plc Employee Benefit Trust. The number of shares in issue at
31st December 2002 was 31,420,720 (2001: 30,455,240).
The diluted earnings per share is based on 31,638,589 (2001: 31,942,538)
ordinary shares. The diluted earnings per share have been calculated using an
average share price of 387p (2001: 839p) for the year.
9 Debtors
2002 2001
restated(note1)
#'000 #'000
Trade debtors 10,335 11,803
Amount due from subsidiaries - -
Other debtors: amounts falling due within one year 1,034 1,007
Other debtors: amounts falling due after more than one year 898 898
Corporation tax recoverable 251 469
Deferred tax 789 1,033
Prepayments 1,131 1,060
Accrued income 323 326
--------- ---------
14,761 16,596
--------- ---------
10 Creditors - amounts falling due within one year
2002 2001
#'000 #'000
Trade creditors 1,726 1,229
Amount due to subsidiaries - -
Dividend payable 1,072 933
UK corporation tax 1,783 2,090
Overseas corporation tax 430 739
Deferred tax 6 -
Other taxes and social security 1,096 1,808
Accruals and other creditors 5,482 6,525
Deferred income 5,204 4,324
--------- ---------
16,799 17,648
--------- ---------
11 Reconciliation of movements in shareholders' funds
2002 2001
restated(note1)
#'000 #'000
Profit for the financial year 10,420 2,052
Dividends paid (1,591) (1,396)
--------- ---------
Retained profit for the period 8,829 656
Reserves of disposed operation - (309)
Other recognised gains/(losses) relating to the year (376) 44
Share capital on share options exercised 96 33
Share premium on share options exercised 1,627 1,611
Transfer in respect of issue of shares to employee trusts (1,627) (1,611)
Charge for share options granted at less than market price - 46
--------- ---------
Net increase in shareholders' funds 8,549 470
Opening shareholders' funds (originally #17,515,000 before
adding prior year adjustment of #1,033,000) 18,548 18,078
--------- ---------
Closing shareholders' funds 27,097 18,548
--------- ---------
12 Reconciliation of operating profit to net cash inflow from operating
activities
2002 2001 2001 2001
#'000 #'000 #'000 #'000
Continuing Discontinued Total operations
operations operations
Operating profit/(loss) before taxation and 8,226 8,096 (1,550) 6,546
interest
Depreciation charges 2,876 2,442 589 3,031
Goodwill amortisation charge - - 17 17
Charge for share options granted at less
than
- 46 - 46
market price
Loss/(profit) on sale of tangible fixed (7) (4) 7 3
assets
(Increase)/decrease in debtors 1,212 (1,881) 1,332 (549)
Increase/(decrease) in creditors (350) 2,524 (1,897) 627
--------- --------- --------- ---------
Net cash inflow/(outflow) from operating 11,957 11,223 (1,502) 9,721
activities --------- --------- --------- ---------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UUUGAPUPWGRM
1 Year RYB Education Chart |
1 Month RYB Education Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
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
