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Share Name | Share Symbol | Market | Type |
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Advantest Corporation | TG:VAN | 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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-0.375 | -1.03% | 36.115 | 36.60 | 37.40 | 36.715 | 36.115 | 36.715 | 330 | 14:37:21 |
RNS Number:0374K Vanco PLC 15 April 2003 Vanco Preliminary Results For the year ended 31 January 2003 FINANCIAL HIGHLIGHTS 2003 2002 #m #m TURNOVER Continuing operations 53.0 37.1 Discontinued operations 0.0 0.0 _________ _________ 53.0 37.1 ========= ========= OPERATING PROFIT (LOSS) Continuing operations 1.1 3.1 Discontinued operations (0.1) (0.2) _________ _________ 1.0 2.9 ========= ========= PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 0.4 2.6 ========= ========= NET ASSETS AT YEAR END 11.0 10.3 ========= ========= CASH IN HAND AT YEAR END 5.6 5.8 ========= ========= NET DEBT AT YEAR END 8.3 2.0 ========= ========= CONTRACTED REVENUE AT YEAR END 132.0 68.3 ========= ========= BASIC (LOSSES) EARNINGS PER ORDINARY SHARE (0.3) 3.5 (PENCE) ========= ========= DILUTED (LOSSES) EARNINGS PER ORDINARY SHARE (0.3) 3.4 (PENCE) ========= ========= VANCO ANNOUNCES YEAR END RESULTS Vanco plc ("Vanco"), the Global Virtual Network Operator, today announces its preliminary results for the year ended 31 January 2003. Key points are as follows * Turnover up 43.0% to #53.0 million (2002- #37.1 million); * Operating profit of #1.1 million (2002- #3.1 million) which is in line with expectations. Return to strong profitability in the second half of the financial year. This reflects the end of the investment phase which was explained when Vanco floated; * Operating profit for the six months to 31 January 2003 of #2.6 million (2002- #2.5 million). This compares to a loss of #1.5 million for the six months to 31 July 2002; * Contracted revenue up 93.3% to #132.0 million at 31 January 2003 (2002- #68.3 million); * Cash balance of #5.6 million (2002- #5.8million); * Net debt of #8.3 million (2002- #2.0 million); * Gross margin of 35.2% (2002- 35.4%); and * Customers in 65 countries globally (2002 - 39 countries). Commenting on the results, Allen Timpany, the Chief Executive said: "At the time of our flotation we set out very specific plans for the development of our business and international operations. I am delighted to report that these plans are on track and already delivering results. We believe that it demonstrates that Vanco's approach to delivering the network solutions needed by multinational clients is the right one in a mature deregulated telecoms market." For further information please contact: Vanco plc Allen Timpany, Chief Executive Officer Tel +44 208 636 1700 Simon Hargreaves, Finance Director Tel +44 208 636 1700 Andrew Brown, Public Relations Manager Tel +44 208 636 1700 FULL PRELIMINARY ANNOUNCEMENT FOLLOWS Introduction I am pleased to report that Vanco has made excellent progress in its first full year on the Official List of the London Stock Exchange. We have exceeded market expectations in both profit and turnover and continued our 15 year record of uninterrupted growth in revenue whilst continuing to make operating profits. We believe this demonstrates why Vanco's strategy of focusing on customer solutions and service, without being encumbered by the ownership of telecommunications infrastructure, continues to be the correct one. This approach has resulted in us continuing to attract large domestic and international corporate customers at the expense of our infrastructure based competitors. Summary of Vanco's business Vanco is a Global Virtual Network Operator (GVNO). Vanco provides the design, implementation, operation, security and management of business critical corporate data networks. World leading organisations rely upon Vanco for their network communications, including Ford, Avis, Pilkington, Virgin Retail, Accor and Tenovis. Vanco is virtual in the sense that it does not build or own the telecomunications infrastructure and assets underlying its customers' networks. The right to use the infrastructure is purchased from the most suitable telecommunications carrier to meet our customers' network requirements anywhere in the world. The virtual concept conveys a number of benefits to the end-user: * The greatest in-depth global network coverage. We now have the capability to provide our services in 230 countries and territories; * Flexibility to select from all the available carriers and technologies; * Freedom to adapt the solution to meet changing customer priorities within the contract; * An ongoing flexibility to incorporate the lowest cost solutions; and * Vanco's core business is delivering the highest quality customer service, without the need to deploy and manage basic telecommunications infrastructure. Market development and customer priorities IT departments are facing intense pressure. They are increasingly being asked to deliver more time critical applications over their existing networks and systems to an increasing number of staff, suppliers and customers. This places great pressure on the existing network and systems. When coupled with a continuing end-user focus on cost optimisation, the opportunities for the Vanco approach are significant. In the carrier marketplace consolidation has continued with many telecoms operators being reduced to domestic and regional players. The desire of carriers to maximise both the traffic through their infrastructure and revenues has often resulted in customers being locked into sub-optimal network management contracts, both technologically and financially, with declining levels of service. Being independent of any of the carriers, Vanco is able to focus on designing network solutions which not only utilise the most appropriate technologies but which also only use the bandwidth the customer requires to deliver their business critical applications. Through our knowledge of the available carriers and technologies, and a high quality service culture, Vanco achieves the customers' objective of delivering a solution at the best cost-to-quality ratio. The strength of Vanco as a network solution provider is demonstrated by the decision of a number of global IT outsourcing companies to bid Vanco solutions in the year ended 31 January 2003, one of which has already resulted in a significant contract. In this situation the IT outsourcer has put forward a Vanco solution for the network component of the larger IT outsourcing contract. This represents a new route to market for Vanco's services. Financial information In the year ended 31 January 2003, turnover amounted to #53.0 million which represents an increase of 43.0% over the previous year. Operating profit on continuing activities amounted to #1.1 million down from the #3.1 million achieved in the previous year. This is in line with information provided at the time of flotation, and results from the execution of the planned expansion of our global network service operations. Basic losses per share were 0.3p (2002- earnings per share 3.5p) and diluted losses per share were 0.3p (2002- earnings per share 3.4p). The losses per share have arisen as a result of a disproportionately high tax charge due to a timing difference on the ability to relieve losses in non- UK companies. Cash generated from operating activities was #1.6 million which demonstrates that the business model continues to be intrinsically self-funding. As at 31 January 2003 our cash balances amounted to some #5.6 million and net debt was #8.3 million. The value of our future contracted revenue at 31 January 2003 was up 93.3% to #132.0 million (2002- #68.3 million), of which some #43.0 million will be recognised in the year ending 31 January 2004 (2003- #25.8 million). New contracts won Many major organisations have selected Vanco to design, implement and manage their business critical networks over the last 12 months. These include Avis Europe, who contracted Vanco to design and manage a 1,000 site solution across 14 countries and Pilkington, one of the world's largest manufacturers of glazing products, who also selected Vanco to design, implement and manage its network of 266 sites covering 21 countries globally. It is especially pleasing that all the new international offices are trading ahead of expectations, with eight customers in France, two of which are members of the CAC40 including a major contract with Accor, five in Italy, and two in Singapore. Additionally, Vanco has deployed over 100 sites for Pilkington in the USA. The investment phase of the international expansion has been executed successfully both on time and on budget and strong results are now being achieved from this. Vanco also has an excellent track record in retaining its existing customers. One example is the recent five year contract extension signed with British Car Auctions, who were Vanco's first customer, signing their original contract in 1989. Another route of increased expansion is the additional work from larger existing customers. An example of this is the relationship with Ford, where Vanco has been certified by Ford be the sole provider their 3rd Generation VPN (3GX VPN) Management Service. This new strategic solution will be available to all dealers and suppliers across Europe. The Ford brands also include Volvo, Jaguar, Land Rover, Mazda and Aston Martin. Development of global customer service and sales operations At the time of the company flotation in November 2001 and in our results statement last year we made commitments to invest in our global customer service operations. In the year ended 31 January 2003 we have delivered upon these commitments. This included investment in our network management facilities in the UK, USA, Singapore, Italy and France. In addition, Vanco has recently opened an office in Sydney to support existing orders for in excess of 100 sites. We have launched O-zone, one of the industry's most advanced on-line service provision system. We are rolling out v:spond, a real-time customer service call handling system to UK customers. Investment has also been made in our global supplier relations team, enabling us to offer services to customers in 230 countries and territories. This investment is paying dividends. In an independent pan-European research study conducted by ICM among senior IT decision makers from Europe's largest companies, Vanco was rated as the leading provider in the network industry for customer satisfaction. The study also revealed that in terms of awareness, Vanco is the 8th leading brand in the network outsourcing services market, equal with Infonet and that we are the leading non-carrier brand, ahead of companies such as IBM and EDS. This reflects the continuing success of our very targeted and well-established direct marketing strategy. The group has made a substantial financial and time investment in processes and systems to support future growth. Development of global customer service and sales operations (continued) Finally, customer service depends heavily on recruiting, training and motivating high quality staff. Again, unlike many of our competitors, Vanco has increased its staff numbers by 30.2%, with the majority in customer facing roles. Recognising the drive and diversity of our staff, we have launched v:choice, a unique programme of flexible benefits. We believe this is the first flexible benefits scheme to be launched on a global basis. Current trading and future prospects The decision to enhance our international presence, at a time when most competitors were scaling back and retrenching into core markets, places Vanco in a very strong position. Global customers now, more than ever, require international network operations, and as our revenue growth suggests are increasingly viewing Vanco as the provider most capable of doing this for them. A track record of consistent growth in revenue, profitability and high quality service, combined with the considerable market opportunity gives us the confidence that we can achieve the market's financial expectations in the year ahead. CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 31 JANUARY 2003 Note 2003 2002 # # TURNOVER Continuing operations 52,993,656 37,066,107 Discontinued operations - 29,220 ____________ ____________ 3 52,993,656 37,095,327 Cost of sales (34,350,951) (23,993,555) ____________ ____________ Gross profit 18,642,705 13,101,772 Administrative expenses (17,664,096) (10,198,191) ____________ ____________ OPERATING PROFIT (LOSS) Continuing operations 1,103,212 3,102,705 Discontinued operations (124,603) (199,124) ____________ ____________ 978,609 2,903,581 Interest receivable and similar income 573,788 245,999 Interest payable and similar charges (1,129,732) (591,193) ____________ ____________ PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 422,665 2,558,387 Tax on profit on ordinary activities (551,469) (816,214) (LOSS) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION (128,804) 1,742,173 Equity minority interests - (23,781) Non-equity minority interests - (236,003) ____________ ____________ (LOSS) PROFIT FOR THE FINANCIAL YEAR (128,804) 1,482,389 Equity dividends 4 - (519,731) ____________ ____________ RETAINED (LOSS) PROFIT FOR THE YEAR 1,2 (128,804) 962,658 ============ ============ Basic (loss) earnings per ordinary share (pence) 5 (0.25) 3.46 ============ ============ Diluted (loss) earnings per ordinary share (pence) 5 (0.25) 3.41 ============ ============ Adjusted diluted (loss) earnings per ordinary share (pence) 5 (0.25) 2.92 ============ ============ CONSOLIDATED BALANCE SHEET 31 JANUARY 2003 2003 Restated # 2002 Note # FIXED ASSETS Intangible assets 4,420,575 4,214,035 Tangible assets 11,881,617 7,292,851 ___________ ___________ 16,302,192 11,506,886 CURRENT ASSETS Stock of components 17,572 23,870 Debtors Due within one year 21,426,227 14,994,671 Due after more than one year 9,517,502 6,886,667 Investments 234,057 248,732 Cash at bank and in hand 5,569,472 5,800,561 ___________ ___________ 36,764,830 27,954,501 CREDITORS: amounts falling due within one year Trade creditors 12,603,319 9,734,159 Other creditors 6,238,541 4,263,888 ___________ ___________ 18,841,860 13,998,047 ___________ ___________ NET CURRENT ASSETS 17,922,970 13,956,454 ___________ ___________ TOTAL ASSETS LESS CURRENT LIABILITIES 34,225,162 25,463,340 CREDITORS: amounts falling due after more (9,792,466) (5,016,795) than one year PROVISIONS FOR LIABILITIES AND CHARGES (409,193) (222,856) ___________ ___________ 24,023,503 20,223,689 =========== =========== ACCRUALS AND DEFERRED INCOME 10,844,112 7,357,127 CAPITAL AND RESERVES Called up share capital 2,633,802 2,598,467 Share premium account 1 7,778,140 7,099,697 Profit and loss account 1 568,132 613,255 ___________ ___________ EQUITY SHAREHOLDERS' FUNDS 2 10,980,074 10,311,419 MINORITY INTERESTS Non-equity 2,199,317 2,555,143 ___________ ___________ 24,023,503 20,223,689 =========== =========== CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 JANUARY 2003 2003 2002 Note # # Net cash inflow from operating activities 7 1,591,368 1,750,448 Returns on investments and servicing of finance Interest received 14,937 48,037 Interest paid (701,324) (358,216) Dividend paid to minority interests - (236,003) __________ __________ Net cash outflow from returns on investments and servicing of finance (686,387) (546,182) __________ __________ Taxation paid (376,272) (413,020) Capital expenditure and financial investment Payments to acquire tangible fixed assets (1,644,451) (635,013) Payments to acquire intangible fixed assets (13,871) (40,807) Receipts from sales of tangible fixed assets - 130,415 ___________ __________ Net cash outflow from capital expenditure and financial investment (1,658,322) (545,405) ___________ __________ Acquisitions Investment in subsidiary undertaking (130,925) (121,337) Investment in own shares by Employee Benefit (45,326) - Trust ___________ __________ Net cash outflow from acquisitions (176,251) (121,337) ___________ __________ Equity dividends paid - (519,731) ___________ __________ Net cash outflow before financing (1,305,864) (395,227) Financing Redemption of shares from non-equity minorities - (94,185) Issue of shares to non-equity minorities - 1,737,663 Issue of ordinary share capital - 4,298,254 Capital element of finance lease payments (2,292,504) (1,924,799) New medium term loans 2,895,080 2,000,000 New loans 884,639 201,205 Capital element of loan repayments (159,304) (64,384) Medium term loan repayments (383,401) (419,700) ___________ __________ Net cash inflow from financing 944,510 5,734,054 ___________ __________ ___________ __________ (Decrease) increase in cash in the year 8 (361,354) 5,338,827 =========== ========== NOTES TO THE ACCOUNTS YEAR ENDED 31 JANUARY 2002 1. STATEMENT OF MOVEMENTS ON RESERVES Profit and Share premium loss account Total account # # # At 1 February 2002 613,255 7,099,697 7,712,952 Retained loss for the year (128,804) - (128,804) Foreign currency translation differences 83,681 - 83,681 Share premium arising on issue of new ordinary shares - 678,443 678,443 _________ _________ _________ At 31 January 2003 568,132 7,778,140 8,346,272 ========= ========= ========= 2. STATEMENT OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2003 2002 # # (Loss) profit for the financial year (128,804) 1,482,389 Dividends - (519,731) ___________ ___________ (128,804) 962,658 Purchase of shares from non-equity minority - (90,049) Foreign currency translation differences 83,681 (16,641) Issue of new ordinary shares 713,778 9,546,137 Cost of issuing new shares on listing - (1,658,975) ___________ ___________ Net increase in shareholders' funds 668,655 8,743,130 Opening shareholder's funds 10,311,419 1,568,289 ___________ ___________ Closing shareholders' funds 10,980,074 10,311,419 =========== =========== 3. TURNOVER All turnover is derived from telecommunication services. The geographical analysis of turnover is as follows: 2003 2002 # # United Kingdom 41,349,421 29,787,446 Other European countries 11,518,804 7,307,881 Other 125,431 - ___________ ___________ 52,993,656 37,095,327 =========== =========== The above analysis is based on the country in which invoices are raised. Due to the nature of the Packaged Network Solutions provided by the Group, it is difficult to accurately split turnover according to the location in which the service is provided. However in the opinion of the Directors, of the total turnover for the year ended 31 January 2003, approximately #23.3 million (2002- #14.5 million) relates to services provided outside the United Kingdom. 4. DIVIDENDS 2003 2002 # # Equity dividends - paid #nil per share (2002 - #47.24) - 519,731 ======= ======== 5. (LOSS) EARNINGS PER SHARE Earnings per ordinary share have been calculated by dividing the (loss) profit after taxation, minority interests and non-equity share dividends for each year by the weighted average number of ordinary shares of the Company during the year. The diluted weighted average number of ordinary shares has been calculated after taking into account the effect of the vesting of shares issued to certain employees of the Group which are due to vest providing only that the employees concerned are still employed by the Group at the due date for vesting. The weighted average number of ordinary shares and the diluted weighted average number of ordinary shares used in the calculations are as follows: 2003 2002 Number Number Weighted average number of ordinary shares 52,017,147 42,840,570 ========== ========== Diluted weighted average number of ordinary shares 53,994,800 43,468,817 ========== ========== Adjusted diluted weighted average number of ordinary shares has been calculated after taking into account the dilutive effect of the conversion of deferred ordinary shares in Vanco Group Limited into ordinary shares of 5p each in Vanco plc. At 31 January 2003, none of the targets regarding the contingently issuable shares to Directors and senior executives had been met. Accordingly, these shares are not dilutive for the purposes of calculating earnings per share. This additional disclosure has been provided in order to demonstrate the potential impact of the share conversion referred to above. The adjusted diluted weighted average number of ordinary shares used in the calculation is as follows: 2003 2002 Number Number Weighted average number of ordinary shares 52,017,147 42,840,570 Dilutive shares 6,535,589 7,887,286 __________ __________ Adjusted diluted weighted average number of ordinary shares 58,552,736 50,727,856 ========== ========== The (loss) profit for the financial year used in the calculation is as follows: 2003 2002 # # (Loss) profit on ordinary activities after taxation (128,804) 1,742,173 Less: non-equity dividends and other appropriations - (259,784) _________ _________ (Loss) earnings attributable to ordinary shareholders (128,804) 1,482,389 +======== ========= 6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT 2003 2002 # # (Decrease) increase in cash in the year (361,354) 5,338,827 Cash outflow from changes in lease and hire purchase 2,292,504 1,924,799 financing New loans (3,779,719) (2,201,205) Cash outflow from loan repayments 542,705 484,084 ___________ ___________ (1,305,864) 5,546,505 New finance leases (5,116,182) (2,569,468) Foreign currency translation differences 103,330 6,094 ___________ ___________ Movement in net debt (6,318,716) 2,983,131 Opening net debt (2,019,826) (5,002,957) ___________ ___________ Closing net debt (8,338,542) (2,019,826) =========== =========== 7. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOWS FROM OPERATING ACTIVITIES 2003 2002 # # Operating profit 978,609 2,903,581 Depreciation 2,478,300 2,450,598 Profit on disposal of fixed assets - (9,789) Amortisation of intangible fixed assets 296,370 195,911 Decrease in stock 6,298 18,949 Increase in debtors (8,784,165) (6,472,140) Increase in creditors 3,068,966 1,898,644 Increase in accruals and deferred income 3,486,990 863,426 Decrease (increase) in other non-cash items 60,000 (98,732) _________ _________ Net cash inflow from operating activities 1,591,368 1,750,448 ========= ========= 8. ANALYSIS OF NET DEBT 31 January Cash flow Exchange Other 31 January 2002 Movements Movements 2003 # # # # # Cash at bank and in hand 5,800,561 (361,354) 130,265 - 5,569,472 Bank loans due in less than one year (504,722) 383,401 - (382,569) (503,890) due in more than one year (1,537,489) (2,895,080) - 382,569 (4,050,000) Loans due in less than one year (117,520) 159,304 - (373,845) (332,061) due in more than one year (207,634) (884,639) - 373,845 (718,428) Finance leases and hire purchase agreements (5,453,022) 2,292,504 (26,935) (5,116,182) (8,303,635) ___________ ___________ __________ __________ ___________ (2,019,826) (1,305,864) 103,330 (5,116,182) (8,338,542) =========== =========== ========== ========== =========== 9. RESTATEMENT Certain comparative information has been restated to reflect consistent presentation with the current year. This relates to the presentation of accruals and deferred income in the balance sheet. 10. STATUS OF AUDIT The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 31 January 2003 or 31 January 2002. The financial information for the year ended 31 January 2002 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 January 2003 will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and will be delivered to the Registrar of Companies following the company's Annual General Meeting. This information is provided by RNS The company news service from the London Stock Exchange END FR NKQKBCBKDQQD
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