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Share Name | Share Symbol | Market | Type |
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NeXGold Mining Corp | TG:TRC | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.556 | 0.506 | 0.55 | 0.00 | 16:17:41 |
RNS Number:6698I Transcomm PLC 13 March 2003 FOR IMMEDIATE RELEASE 13 MARCH 2003 TRANSCOMM PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002 Transcomm plc ("Transcomm"), the wireless data network services group, announces its audited preliminary results for the year ended 31 December 2002. KEY POINTS: * Profitability and cash generation at an operating level for the full year; * The results for the year were: Turnover #13.8m (2001 : #15.7m) Operating Profit* # 0.8m (2001 : Loss #(4.3)m) EBITDA** # 1.7m (2001 : Loss #(3.6)m) Earnings per share* 0.72p (2001 : Loss (4.23)p) *Before exceptional costs and amortisation of goodwill. **Before exceptional costs * Subscriber growth of 14.5% (2001: 19.3%) * Cash generated from operating activities #1.3m (2001: #(1.0)m) * Operating exceptional items of #0.4m (2001: #nil) * New business secured with Securicor and Sainsbury's * Investment in network upgrade of #1.1m in 2003 On future prospects, Chairman, Rod Matthews MBE stated: "Continued focus on those market sectors that require high levels of wireless data integrity together with enhanced cash generation and a stronger balance sheet, places us in a strong position to further build on the successes of 2002. The implementation of our network upgrade will enable us to reduce our cost base further whilst achieving even higher standards of network integrity. These initiatives will further improve operating efficiencies and provide a platform from which both organic and non organic growth and development can be achieved." FOR FURTHER INFORMATION, PLEASE CONTACT: Transcomm: 0208 9909090 www.transcomm.uk.com Rod Matthews, Chairman Andrew Carver, Chief Executive Russell Backhouse, Finance Director ISSUED BY: Marshall Robinson Roe: 020 7489 2033 Richard Robinson Chairman's Statement Introduction I am very pleased to announce our results for the year ended 31 December 2002, which reflect the benefits of the strategic review of our business undertaken during 2001 and the resulting actions. The strategic review concluded that we needed to: * rationalise our business by disposing of non-performing entities; * clarify our strategy to ensure complimentary activities to our partners; * increase our focus in market segments where our key strengths could be exploited. The Board anticipated that implementing these changes would lead to Transcomm trading profitably by December 2001. This was achieved, and through 2002 the Company has continued to deliver operating profits despite an increase in competitive pricing pressure and the continued caution affecting the telecoms sector. Having made this progress it was appropriate to make a number of management changes, and in particular to appoint a new Chief Executive Officer, so that we could energetically deliver the more sales and marketing and customer orientated strategy adopted. In August 2002 Andrew Carver was appointed to steward the business through a new phase of growth and development. After a period of handover, and the departure of Andrew Fitton and Richard Pullin earlier this year, our management changes are now complete. I wish to thank them both for their contribution to the Company. It is testimony to the major turnaround achieved that we have been able to absorb the costs of these management changes, whilst delivering the first profitable year in the history of the Company. We now have an excellent foundation on which to build, and a management team well matched to meet our needs. We intend to further refine our sales focus to those market sectors where the high service levels and reliability of our wireless data solutions are most closely aligned to our customers' requirements. Our offerings and knowledge of our customer needs will be increasingly complemented by our chosen partners' products, expertise and relationships. The changes in the Company represent a major transformation from its historical loss-making position. Results Our business has achieved profitability at the operating level for the full year and for the first time in recent history the Group has been able to report positive earnings per share. Group revenue for the year ended 31 December 2002 was #13.83m, (2001: #15.67m). Group revenues reflect #1.03m in relation to retention monies secured following the successful implementation of the field service application to General Domestic Appliances. After operating expenses totalling #6.77m (2001: #10.25m), an operating profit before operating exceptional items of #0.43m (2001: #(5.06m)) resulted. Part of the Group's office space continues to remain vacant and provision has been made in respect of costs to reflect the obligations associated with this unused accommodation. In addition, provision has been made to reflect the doubt surrounding the Group's ability to recover a leasing receivable, which had been outstanding for some considerable time. These provisions, together with the appointment costs relating to Andrew Carver have been reflected as operating exceptional items totalling #0.36m, further details of which are shown in note 2. After operating exceptional items, an operating profit for the year of #0.08m results, a significant improvement to the operating loss of #(5.06)m reported for 2001. After financing charges, the Group reported retained earnings of #0.03m (2001: #(11.09)m) and adjusted earnings per share of 0.72p (2001: (4.23) p). As anticipated, the cash generation in the business improved during the latter part of the year, once the cash outflows associated with the reorganisation totalling #1.28m had been discharged. Operations During the course of the year the business has continued to develop its reseller channels and reinforce its market position as a leading provider of business critical, wireless data services. The Group's core network service revenue streams accounted for #11.34m of turnover (2001: #10.71m) representing growth of core network services of 6%. The advent of low cost GPRS data services offered over voice-based, mobile phone networks has introduced some uncertainty and severe price-based competition into the market. However, it is already clear that the lack of service level agreements and the variable performance of GPRS services inhibit their ability to compete with Transcomm in many of our core sectors. During the year the business secured new contracts with Securicor and TNT Hagermayer. New business was won through reseller channels with Sainsbury's, Woolworths and New Look. Significant additions were also made to the network by existing resellers, Isotrak in the logistics sector and Schlumberger Sema for pay & display machines. For the year, network service revenues derived through our reseller channels totalled #2.59m a growth of 40% over 2001. As we reported in January, the Group lost a significant contract with United Parcel Services at the end of 2002, which resulted in a reported churn figure of the year of 11.7% (2001:11.5%). Whilst this loss, largely driven by our inability to offer an international solution, will impact revenues during 2003, our churn result continues to fair significantly better than that of the mobile phone operators. Without this loss reported churn would have been at a rate of less than 0.7% per month. Connections to our network grew by 15% during the year (2001: 19%), with data volumes per unit rising steadily as dependency on our services increases. With ever changing customer needs, new methods by which our customers connect to our network via Internet gateways and the security of those connections have been introduced. 2003 Plans The foundation is now in place to allow the Board to focus on further enhancing cash generation during 2003 in order to substantially reduce Transcomms borrowing requirements by the end of the year. With network integrity continuing to remain a high priority for the Group, we have committed to upgrading our network platform during the course of 2003, and the Group is now in a position to afford this and thus to deliver further on-going reductions in operating expenditure. For our customers, this commitment will help us to provide a greater level of network integrity and significantly reduce the time to recovery in the event of network failure. The recent restructuring of our organisation and tighter sales focus in the latter half of 2002 has strengthened our position in markets requiring the unique benefits of our service and reduced our dependency on those areas subject to greater price pressures. During 2003 the fruits of these changes should become apparent. We will further refine our overhead base whilst continuing to align our resources to support greater penetration of existing markets and the exploitation of specific market segments that will benefit from our unique capabilities. The emergency services sector remains a key area of focus. We are working, in conjunction with our partners, with a number of police forces, on contracts which will contribute significantly to our business's earnings this year and for several years to come. We have also identified new market opportunities in sectors that include financial transactions, mobile payment and pay-and-display machine managementwhere we are already seeing early signs of success. Prospects Continued focus on those market sectors that require high levels of wireless data integrity together with enhanced cash generation and a stronger balance sheet, place us in a strong position to further build on the successes of 2002. The implementation of our network upgrade will enable us to reduce our cost base further whilst achieving even higher standards of network integrity. These initiatives will further improve operating efficiencies and provide a platform from which both organic and non-organic growth and development can be achieved. R A Matthews MBE Chairman 13 March 2003 Consolidated Profit and Loss Account For the year ended 31 December 2002 Note Year ended Year ended 31 December 31 December 2002 2001 # # Group turnover - Continuing operations 1.1 13,827,297 15,669,742 EBITDA before exceptional items - Continuing operations 1.2 1,724,773 (3,568,308) 1,724,773 (3,568,308) Depreciation (940,519) (775,154) Amortisation of capitalised goodwill (349,350) (711,691) Operating profit/(loss) before operating exceptional 434,904 (5,055,153) items Operating exceptional items 2 (359,679) - Total operating profit/(loss) - continuing operations 75,225 (5,055,153) Exceptional write down of goodwill - continuing operations - (3,562,134) Exceptional costs of fundamental reorganisation - continuing operations - (2,510,423) 75,225 (11,127,710) Net interest (41,904) 41,788 Profit/(loss) on ordinary activities before taxation 33,321 (11,085,922) Taxation - - Retained profit/(loss) for the financial year 33,321 (11,085,922) Earnings per share 3 Pence Pence - Basic profit/(loss) per share 0.03 (10.90) - Adjusted basic profit/(loss) per share 0.72 (4.23) - Diluted profit/(loss) per share 0.03 (10.15) There were no recognised gains or losses other than the profit/(losses) for the periods shown above. Consolidated Balance Sheet At 31 December 2002 Note 31 December 2002 31 December 2001 # # # # Fixed assets Intangible fixed assets 2,620,123 2,969,473 Tangible fixed assets 4,547,483 5,107,202 7,167,606 8,076,675 Current assets Stocks 524,272 834,757 Debtors 4,510,997 5,036,030 Cash at bank and in hand 93,466 470,593 5,128,735 6,341,380 Creditors: Amounts falling due within one year (4,686,549) (5,755,317) Net current assets 442,186 586,063 Total assets less current liabilities 7,609,792 8,662,738 Creditors: Amounts falling due after more than one year (34,970) (86,625) Provisions for liabilities and charges 4 (235,274) (1,392,633) Net assets 7,339,548 7,183,480 Capital and reserves Called up share capital 5,141,004 5,104,363 Share premium account 5 17,059,625 16,973,519 Merger reserve 5 4,412,191 4,412,191 Profit and loss account 5 (19,273,272) (19,306,593) Equity shareholders' funds 7,339,548 7,183,480 Consolidated Cash Flow Statement For the year ended 31 December 2002 Note Year ended Year ended 31 December 2002 31 December 2001 # # # # Net cash inflow/(outflow) from operating activities 7(ii) 1,281,458 (999,654) Servicing Finance Interest received 31,399 95,568 Interest paid (46,553) (2,802) Loan stock interest paid (4,088) (9,900) Interest element of finance lease rentals (13,955) (34,680) Other interest paid (8,707) (6,398) (41,904) 41,788 Tax paid - - Capital expenditure Purchase of tangible fixed (451,193) (1,002,888) assets Sale of tangible fixed assets 80,962 22,256 (370,231) (980,632) Acquisitions and disposals Exceptional costs of reorganisation (1,275,349) (1,092,644) (1,275,349) (1,092,644) Financing Issue of share capital - 16,150 Costs of issue of share capital - (40,143) Redemption of loan notes (44,000) (172,000) Hire purchase and finance lease obligations (112,923) (203,298) (156,923) (399,291) Decrease in cash (562,949) (3,430,433) Reconciliation's of Movements in Shareholders' Funds For the year ended 31 December 2002 Group Company Note 31 December 31 December 31 December 31 December 2002 2001 2002 2001 # # # # Retained profit/(loss) for the financial year 33,321 (11,085,922) (697,434) (11,713,123) New share capital 122,747 251,972 122,747 251,972 subscribed Net addition/(reduction) to shareholders' funds 156,068 (10,833,950) (574,687) (11,461,151) Opening shareholders' 7,183,480 18,017,430 12,166,539 23,627,690 funds Closing shareholders' 7,339,548 7,183,480 11,591,852 12,166,539 funds Notes to the Financial Statements Statement of Accounting Policies Basis of accounting The Consolidated financial statements have been prepared in accordance with applicable accounting standards and conform with generally accepted accounting principles in the United Kingdom ("UK GAAP"). During the financial year the Group has adopted Financial Reporting Standard 18 "Accounting Policies" and Financial Reporting Standard 19, "Deferred tax", issued by the Accounting Standards Board. As a result, deferred tax is now stated on a full liability basis. There was no impact of adopting FRS 19. Adoption of this Financial Reporting Standard has not required any re-statement of prior year comparatives. 1 Segmental analysis 1.1 Turnover During the year, the Group operated substantially one class of business, the supply of wireless data services and products. Year ended Year ended 31 December 2002 31 December 2001 # # Continuing Operations Wireless data services and products 13,827,297 15,669,742 1.2 Operating profit/(loss) after operating exceptional items Year ended Year ended 31 December 2002 31 December 2001 # # Group turnover - continuing operations Wireless data services & products 13,827,297 15,669,742 Cost of sales Wireless data services & products (6,617,552) (10,476,337) Gross profit 7,209,745 5,193,405 Sales and marketing (1,683,053) (2,681,084) Administration (5,451,467) (7,567,474) Operating profit/(loss) after operating 75,225 (5,055,153) exceptional items 2 Operating exceptional items Operating exceptional costs incurred during the year relate to the following: Year ended 31 December 2002 # Management recruitment costs 82,474 Provision for onerous contract 159,215 Vacant property provision 117,990 359,679 Management recruitment costs relate to the recruitment fees associated with the appointment of A Carver as Chief Executive of the Group. The provision for onerous contract relates to the write down of a leasing receivable which the Group had failed to recover during the year. A further provision for rent and associated costs has been made in respect of part of the Group's vacant property at West Drayton. 3 Earnings per share Weighted average number of shares in issue during the year and used to calculate: Year ended Year ended 31 December 2002 31 December 2001 Number Number Basic and adjusted basic earnings per share 102,735,759 101,750,746 Dilutive effect of share options 4,208,017 7,507,415 Diluted earnings per share 106,943,776 109,258,161 Year ended Pence per Year ended Pence per 31 December share 31 December share 2002 2001 # # Basic earnings per share 33,321 0.03 (11,085,922) (10.90) Goodwill amortisation and impairment 349,350 0.34 4,273,825 4.20 Operating Exceptional items 359,679 0.35 2,510,423 2.47 Adjusted basic earnings per 742,350 0.72 (4,301,674) (4.23) share 3 Earnings per share - continued Earnings for basic earnings per share represents the net profit attributable to ordinary shareholders, being the profit on ordinary activities after taxation, and has also been used to calculate diluted earnings per share. Adjusted basic earnings per share has been presented in order to highlight the underlying performance of the Group. 4 Provisions for Liabilities and Charges Reorganisation Deferred Provision Taxation # # At 1 January 2002 1,392,633 - Additions - onerous contracts 117,990 Amounts used and written back (1,275,349) - At 31 December 2002 235,274 - At 31 December 2002, part of the Group's office premises remained vacant following the reorganisation during 2001. As such an additional provision of #117,990 has been made to reflect the rental and associated costs of this onerous contract. At 31 December 2002, tax losses available to the Group exceeded #89m. On the basis of the profitability of the Group achieved during 2002 it is not expected that these losses will be relieved in the short term and as such the recoverability of the resultant deferred tax asset remains relatively uncertain. As such it is not considered appropriate to recognise a deferred tax asset at 31 December 2002. 5 Reserves Group Share Profit Premium Merger and loss Account Reserve account # # # At 1 January 2002 16,973,519 4,412,191 (19,306,593) Premium on shares issued during the year 86,106 - - Retained profit for the year - - 33,321 At 31 December 2002 17,059,625 4,412,191 (19,273,272) On 12 February 2002, 732,822 Ordinary shares of 5p were issued as part of a supply agreement with Communication Network Interface, Inc. dated 7 March 2001 at a premium of 11.75p per share. The issue of shares represents part payment in respect of a deposit for the supply of hand held devices. 6 Capital Commitments At 31 December 2002, the Group had entered in to a commitment with Ericsson AB for the upgrade of its Mobitex network operating platform. The agreement provides for this upgrade to be undertaken during 2003 for a sum of $1.9m (approx #1.1m) payable over three years commencing July 2003. No provision has been made in the financial statements for the Group or the Company at the 31 December 2002 in respect of this agreement. 7 Notes to the Cash Flow Statement (i) Reconciliation to Net Funds 31 December 2002 31 December 2001 # # Decrease in cash in the year (562,949) (3,430,433) Decrease in debt and lease financing 156,923 375,298 Change in net debt from cash flows and movement in debt in the year (406,026) (3,055,135) Net funds at 31 December 2001 222,654 3,277,789 Net (debt)/funds at 31 December 2002 (183,372) 222,654 (ii) Net Cash Outflow From Operating Activities 31 December 2002 31 December 2001 # # Operating profit/(loss) before exceptional items 434,904 (5,055,153) Depreciation and amortisation 1,289,869 1,486,845 (Profit)/loss of sale of tangible fixed assets (10,568) 20,941 Decrease in stocks 310,485 1,708,615 Decrease in debtors 295,762 846,173 (Decrease) in creditors (1,038,994) (7,075) Net cash inflow/(outflow) from operating activities 1,281,458 (999,654) (iii) Analysis of Net Funds 31 December Cash Flow 31 2001 December 2002 # # # Cash at bank and in hand 470,593 (377,127) 93,466 Bank overdraft - (185,822) (185,822) (562,949) Loan notes due within one year (44,000) 44,000 - Finance leases (203,939) 112,923 (91,016) 222,654 (406,026) (183,372) 8 Subsequent Events On 10 January and 31 January 2003 respectively, A Fitton and R Pullin resigned as directors of both the parent company and subsidiary undertakings. According to the terms of their service contracts #nil and #120,750 are to be paid respectively to these directors. 9 Annual Report The annual report will be posted to shareholders on 14 March 2003 and copies will be available from: The Company Secretary, Transcomm plc, Heathrow Boulevard, 280 Bath Road, West Drayton, Middlesex UB7 0DQ. 10 Annual General Meeting The Annual General Meeting of Transcomm plc will be held at 280 Bath Road, West Drayton, Middlesex, UB7 0DQ on 15 April 2003. END This information is provided by RNS The company news service from the London Stock Exchange END FR DGGDXDUBGGXD
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