Interim Results

RNS Number:1169M
Cyberes PLC
10 June 2003



                                  Cyberes Plc

             Interim results for the six months ended 31 March 2003


Highlights

*    Gross booked revenue up 21% to #10.16m (31 March 2002, #8.41m)

*    Turnover up 38% to #7.08m (31 March 2002, #5.13m)

*    Gross margin increased to 6.1% (31 March 2002, 4.7%)

*    Net loss reduced to #0.63m (31 March 2002, #1.22m)

*    Active customers during March were 295 (March 2002, 306) as focus on
     margins sees less profitable tail shortened

*    Cyberes Technology Services launched Cyberes Sweden in April 2003


Ian McNeill, Cyberes' Chairman said:

'It has been another challenging period for the travel industry punctuated by
the build up to and then conflict in Iraq and the SARS outbreak. This has led to
a well-documented drop off in travel as uncertainty has reigned in the mind of
customers.

Against this turbulent market, Cyberes has once again lifted its turnover,
gained market share, improved its margins and halved losses.

It is clear that the Cyberes technology platform is a winner and when some
normality in trading conditions returns then the target of profitability is
achievable.

However, customer confidence remains fragile and until this begins to improve,
achieving substantive revenue growth will be challenging.'


For further information:

Tariq Malik, CEO                Matthew Moth / Miles Bake
Cyberes plc                     Bell Pottinger Financial
Tel: [phone]              Tel: [phone]



Chairman's Statement

Overview

The challenges for the international travel industry have been well documented
over recent months. It has been buffeted once again by major world events,
particularly the war in Iraq and the SARS outbreak. These upheavals have served
to further undermine the travelling public's confidence, resulting in more
journeys being postponed.

Against this uncertain backdrop the Cyberes management team has worked hard to
increase its market share in supplying solutions to Independent Travel Agents
(ITAs) in the UK through its proprietary travel booking and fares system. We
have had some success growing turnover and margins, whilst halving losses by
continued tight cost control.

In Europe, our first international Cyberes Technology Services operation under
the agreement with Sabre was successfully launched in April 2003 within Sweden.
This Swedish joint venture with NTT International Tours and Travel combines
Cyberes travel technology and e-commerce methodologies with NTT's content and
local market knowledge. It also supports and fulfils part of our Sabre
outsourcing agreement by providing Cyberes to over 70 select Sabre customers
throughout the country.

Financial and operating review

The Cyberes team has continued to increase sales despite the turbulent market
place over the past six months.

Gross booked revenue (equating to all bookings made through the Cyberes
interface; including ticketed bookings via third party branded versions) was
#10.16m against #8.41m in the comparable period.

Turnover has grown by 38% over the comparable period in 2002, where global
bookings have been reported as falling by as much as 24%. We are, however,
disappointed with our top-line growth which clearly has been directly affected
by prevailing adverse market conditions.

Over the course of the year Cyberes has continued to concentrate on the selling
of consolidated fares. It has also introduced flat ticketing charges for
published fares that have seen margins on these fares improve to over 6%. This
change along with a margin enhancement programme has seen total margins increase
to 6.1% (31 March 2002, 4.7%).

As at the end of March 2003 Cyberes had cash balances of #2.3m of which #900k
was committed to the airlines. Current operating cash burn is #85k per month
excluding any expenditure on the new product development.

Cyberes cost base reductions have been implemented with a further halving of
losses to #634k from #1.22m during the comparable period in 2002.

Cyberes Travel Services

The Travel Services division uses The Cyberes technology solution to make travel
content available to ITAs. As well as providing a highly cost-effective link to
published fares, Cyberes Travel Services has also developed it's own content for
ITAs.

As we stated in our last report and accounts, we have reorganised our customers
into specific segments to focus on profitability. In the 6 month period 50
customers who did not meet the minimum booking criteria of #3,000 per month were
replaced by 56 new customers who met all the criteria. In addition there was a
churn of 33 customers. As a result the number of active customers decreased by a
net 27.

Overall our active customer base (actives and irregular purchasers) in the last
quarter was 350 of which 295 purchased in March. Yet, over the last quarter due
to uncertainty we have seen an increasing reluctance for customers willing to
make any commitment on sales levels and the interval between purchases by our
irregular customers has increased.

Interest from ITAs in the product has remained high with 105 companies holding
temporary passwords and 20 companies in the training pipeline.

Instant ticketing customers (ITS) have continued to grow in numbers and
historically proven to produce 2.5 times the average sales of non-ITS customers.
The target of 40 customers in England is half way to being achieved.

Over the reporting period we have added new travel content and functionality
through the launch of ferries and low cost hotels.

Cyberes Technology Services

The Cyberes technology system, as used within the framework of the agreement
with Sabre, works in three parts. It acts as a warehouse for Sabre's published
fares and any third party negotiated content. It acts as a system to distribute
those fares and other special offers to ITAs and it allows those ITAs to book
and ticket on-line.

The successful launch of Cyberes Sweden has been the first stage in the
international rollout of the Sabre contract. The implementation of this contract
has been delayed owing to a variety of licensing and technical problems and
factors which have affected the worldwide airline market. However we remain
confident that the roll-out of this contract will now gain momentum.

Outlook

The third quarter of the 2003 financial year has begun in a most challenging
way. As widely reported by the media the war in Iraq, SARS and increased
terrorist activities has meant that bookings are down on last year's levels.

Visibility is limited but we remain convinced that the Cyberes technology
platform is a cost effective solution given current market conditions. This is
evidenced by our gain of market share and improvement in margins. What we now
need is a period of some stable trading to consolidate our successes and drive
top-line revenue growth to achieve our target of breakeven as soon as possible.

We are excited by the prospects of the European rollout of our technology
platform with Sabre and expect that to bear fruit as the year progresses.



Consolidated Profit & Loss Account
for the six months ended 31 March 2003


                           Six months       Six months   Twelve months
                                ended            ended           ended
                             31 March         31 March         30 Sept
                                 2003             2002            2002
                Note             #000             #000            #000
                            Unaudited        Unaudited         Audited

Gross booked                                        
revenue -                            
(unaudited)        1           10,157            8,413          18,351
                              -----------      -----------   -------------

Turnover           1            7,082            5,127          12,028

Cost of sales                  (6,653)          (4,885)        (11,362)
                              -----------      -----------   -------------

Gross profit                      429              242             666


Administrative                                    
expenses                       (1,099)          (1,485)         (2,680)
                              -----------      -----------   -------------
Operating loss                   (670)          (1,243)         (2,014)


Net interest                                                   
receivable                         36               28              53
                              -----------      -----------   -------------
Loss on
ordinary
activities
before
taxation                         (634)          (1,215)         (1,961)


Taxation           2                -                -               -
                              -----------      -----------   -------------


Loss for the                                       
financial                   
period                           (634)          (1,215)         (1,961)
                              -----------      -----------   -------------


Basic and                                         
diluted loss                
per share          3            (2.26)p          (6.08)p         (9.37)p               
                              -----------      -----------   -------------

Turnover is derived from the Group's continuing operations.

No separate statement of total recognised gains and losses has been
presented as all such gains and losses have been dealt with in the
profit and loss account.



Consolidated Balance Sheet
as at 31 March 2003


                                    31 March     31 March      30 Sept
                                        2003         2002         2002
                                        #000         #000         #000
                           Note    Unaudited    Unaudited      Audited

Fixed assets

Intangible assets                        440          265          256

Tangible assets                          138          216          180
                                   -----------  -----------  -----------

                                         578          481          436

Current assets

Debtors                                  496          547          594

Cash at bank and in hand               2,339        1,624        3,521
                                   -----------  -----------  -----------

                                       2,835        2,171        4,115

Creditors: amounts
falling due
within one year                       (1,525)      (1,402)      (2,029)
                                   -----------  -----------  -----------

Net current assets                     1,310          769        2,086
                                   -----------  -----------  -----------



Total assets less
current liabilities                    1,888        1,250        2,522
                                   -----------  -----------   ----------

Creditors: amounts
falling due after
more than one year            4         (740)           -         (740)
                                   -----------  -----------  -----------



Net assets                             1,148        1,250        1,782
                                   -----------  -----------  -----------

Capital and reserves

Called up share capital       5        2,911        2,111        2,911

Share premium                          3,840        3,362        3,840

Profit and loss account               (5,603)      (4,223)      (4,969)
                                   -----------  -----------  -----------


Shareholders' funds                    1,148        1,250        1,782
                                   -----------  -----------  -----------




Consolidated Cash flow statement
For the six months ended 31 March 2003


                             Six months    Six months    Twelve months
                                  Ended         Ended            Ended
                               31 March      31 March     30 September
                                   2003          2002             2002
                                   #000          #000             #000
                              Unaudited     Unaudited          Audited

Net cash outflow from                                    
operating activities               (981)         (678)             (46)

Returns on investments and                                     
servicing of finance                 36            28               53   

Capital expenditure                (237)         (126)            (164)
                              -----------   -----------    -------------

Cash outflow before                                  
financing                        (1,182)         (776)            (157)


Financing - issue of                                        
shares                                -             -            1,278    
                              -----------   -----------    -------------
(Decrease)/increase in                               
cash                             (1,182)         (776)           1,121


Reconciliation of net cash
flow to movement in net
debt

(Decrease)/increase in cash                          
in period                        (1,182)         (776)           1,121

Opening net cash                  3,521         2,400            2,400
                              -----------   -----------    -------------

Closing net cash                  2,339         1,624            3,521



Reconciliation of operating
loss to net cash outflow
from operating activities

Operating loss                     (670)       (1,243)          (2,014)

Depreciation                         70            58              117

Amortisation                         25            27               51

Movement in debtors                  98           (91)            (138)

Movement in creditors              (504)          571              998

Movement in deferred                                           
income                                -             -              940         
                              -----------   -----------    -------------    
Net cash outflow from                                    
operating activities               (981)         (678)             (46)
                              -----------   -----------    -------------


Reconciliation of movement
in shareholders' funds

Loss for the financial                              
period                             (634)       (1,215)          (1,961) 

New share capital                                             
subscribed net of issue                                       
costs                                 -             -            1,278
                              -----------   -----------    -------------
Net movement in                                       
shareholders' funds                (634)       (1,215)            (683)

Opening shareholders'                                  
funds                             1,782         2,465            2,465
                              -----------   -----------    -------------
Closing shareholders'                                  
funds                             1,148         1,250            1,782
                              -----------   -----------    -------------




Notes

 1. Accounting policies

    The financial information has been prepared on the basis of the accounting
    policies as set out in the Group's financial statements for the twelve
    months ended 30 September 2002.

    Gross booked revenue

    Gross booked revenue represents the value of travel services purchased
    utilising the Cyberes system. It includes bookings made by certain third
    party super distributors who have access to the Cyberes system via an
    electronic own branded interface providing a service to specific niche
    markets. Gross booked revenue is not a statutory item and is shown
    unaudited.

    Turnover

    Turnover represents the amounts derived from electronic wholesale
    distribution of travel products and services to Independent Travel Agents.

    Cash

    Cash comprises cash in hand and deposits repayable on demand, less
    overdrafts payable on demand.

 2. Taxation

    There is no charge for taxation based on the result in the period. The Group
    has accumulated tax losses available for carry forward against future
    taxable profits. The potential deferred tax asset of #1.2m has currrently
    not been recognised.

 3. Loss per share

    Basic and diluted loss per share has been calculated in accordance with FRS
    14. By following the rules the diluted loss per share is the same as the
    basic loss per share as the share options are anti-dilutive and have
    therefore not been used in the calculation. The rules of FRS 14 require that
    the company should treat potential shares as dilutive if their conversion to
    ordinary shares would decrease net profit or increase net loss per share.

 4. Creditors amounts falling due after one year

    This represents deferred income which occurs as part of a contracted
    agreement covering transaction fees advanced as part of the contract in
    duration until 21 March 2007. An amount of #200,000 (31 March 2002 nil) is
    included within creditors amounts falling due within one year.

 5. Placing and open offer

    On 19 July 2002 the company issued 8,000,107 ordinary shares of 10p each via
    a placing and open offer to provide additional working capital. The
    consideration received after expenses was #1,278,000.

 6. Interim financial information

    The unaudited financial information for the six months ended 31 March 2003
    and six months ended 31 March 2002 do not constitute full statutory accounts
    within the meaning of section 240 of the Companies Act 1985. The financial
    information for the twelve months to 30 September 2002 is based on the
    audited accounts for that period which have been reported upon, without
    qualification, by the auditors and have been delivered to the Registrar of
    Companies.

 7. Approval of interim report

    The interim report was approved by the board on 09 June 2003.

 8. Address for copies of this report

Copies of this report are available from the Company Secretary, Cyberes plc,
Mitre House, North Park Road, Harrogate HG1 5RX.



Independent review report by KPMG Audit Plc to Cyberes Plc

Introduction

We have been engaged by the company to review the financial information set out
on pages 4 to 7 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual accounts except where they are to be changed in the next annual
accounts in which case any changes, and the reasons for them, are to be
disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003.


KPMG Audit Plc
Chartered Accountants
1 The Embankment
Neville Street
Leeds LS1 4DW



Notes to editors

Cyberes provides bookings systems and software to independent travel agents
("ITAs"). In the UK, it is also a flight consolidator in its own right, selling
travel tickets. The business comprises two divisions, Cyberes Travel Services
which deals directly with the ITAs, and Cyberes Technology Services, which is
used within the framework of the Sabre agreement.






                      This information is provided by RNS
            The company news service from the London Stock Exchange

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