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Share Name | Share Symbol | Market | Type |
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Rio Fortuna Exploration Corp | TSXV:RFT | TSX Venture | Common Stock |
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 | - |
RNS Number:6134M Raft International PLC 23 June 2003 For Immediate Release 23rd June 2003 Raft International plc Interim Results for the six months ended April 2003 Highlights *Encouraging performance despite challenging trading environment *Turnover increased by 23% to #4.2m (2002: #3.4m) *Gross margins increased to 40% reflecting increase in software license sales (2002: 32%) *Operating loss decreased by 55% to #0.5m (2002: #1.2m loss) despite a significant investment programme *Balance sheet remains strong with no debt and #2.6m of cash *Deferred income of #0.5m (2002: #0.2m) *6 new contract wins (2002: 3 contract wins) achieved so far this financial year *Sales pipeline stronger than comparable previous period *Channels to market significantly strengthened by the recent addition of SunGard to the Partnership programme *Trading improvements endorse the Group's strategy of focusing on energy credit risk and operational risk sectors. David Priestley, Chairman, commented: I am very encouraged by these results. We have continued to exploit our technology and begun to reap the benefits of the strategy set out last year. All but one of our significant contract wins this year have come from our strategically important sectors of operational risk management in banking and credit risk management in the energy markets. We have driven up margins by selling more licenses and controlling our expense. Our new Houston location was set up in October 2002 and has been successfully marketing the credit risk product to the US energy market. After a period of headcount restraint, we are now selectively hiring into both our sales and delivery groups to exploit the successes we are experiencing. We have further strengthened the management team by recruiting Gerry Wilkinson to head up our operational risk product in the UK, and Pete Pavluk to the role of Commercial Development Director for our energy products in the US. Both have substantial experience in their markets. Your Board remains committed to returning the Group to profitability and last year we set out our strategy to achieve this goal. The strategy is starting to deliver results after a very difficult two years for the technology sector generally and, along with this year's investment programme in the operational risk product, has positioned the Group to be able to take advantage of further market opportunities. Once again I would like to compliment all our staff for their loyalty, dedication and competence during the past six months and thank each of them for their contribution to our significantly improved performance. Trading Review In our last report we described our strategy to limit the number of products we actively market, continue downward pressure on costs, improve margins and widen our bandwidths to market. We have made good progress in executing this strategy and these interim results reflect this progress. Our products assist clients in managing credit and operational risk, business areas which are attracting increasing attention as the pressures to improve corporate governance intensify. The continuing adverse effects of difficult market conditions on the Group's results have been offset by the successful execution of our strategic steps. We are also pleased that the results are beginning to show a material diversification of our revenue mix across markets and a growth in license fees rather than per diem-based fees. One third of our revenues were generated by the strategically important operational and credit risk sectors. The proportion of license fee revenue has more than doubled to 20% compared with the equivalent period last year and it is management's aim to raise this to over 50% in the medium term. We have, however, managed to retain the revenue contribution from the investment banking sector largely because of our success in selling professional services into that market. Share of Turnover ------------------ 6 months to 30 6 months to 30 April 2003 April 2002 ---------- ---------- Operational risk 12% 5% ------------- ---------- ---------- Energy credit risk 21% 14% ------------- ---------- ---------- Investment Banking 59% 68% ------------- ---------- ---------- All other 8% 13% ------------- ---------- ---------- License Revenue 20% 8% ------------- ---------- ---------- We continue to pursue prudent revenue recognition polices and have deferred income of #0.5m (#0.2m at 30 April 2002). Our productivity measures have improved. Compared with the same period last year, gross margins are up from 32% to 40%; administrative expenses have dropped from 65% to 53% of turnover and are at the same absolute level as a year ago despite the 23% increase in turnover and the opening of a new office in Houston. In pursuit of increasing our license fees and widening our bandwidth to market, we have built more partnerships with other industry players. We have cooperative arrangements with most of the major solution providers and we are particularly proud of the recently announced global arrangement with SunGard. A comprehensive and effective partnership programme significantly widens our bandwidth to market and is a key prerequisite to achieving the Group's strategic goals. We continue to improve the functionality and scope of our strategic risk management products by leveraging our extensive sector reach and technical competence. We are part way through a significant investment programme in our two key products, most of which will be completed by the end of this year and which will result in increased R&D costs for the period. We believe that the scale of this programme is appropriate at this time as it raises the barriers to entry in these sectors and positions us well for an increase in demand for risk management solutions which we expect in the near term. We will continue to develop our products in the future and the proportion of work done at our R&D centre in Mumbai will grow. We now have well over 1500 re-usable components in the inventories across all products maintained in Mumbai. We are recognised as one of the market leaders and we consolidate that position with each successful contract win. We have had 5 contract wins this year for our two chosen sectors of operational risk and energy credit risk management: *Operational risk management contract with Abbey National Plc and a major US bank *Energy credit risk management contracts with Entergy and Reliant in the US and Nuon in Europe We have also made one sale of the underlying component technology to the Danish Stock Exchange reflecting a wider aspect of the Group's strategy which is to remain alert to entrepreneurial opportunities to exploit our expertise and technology. Outlook In our report for the year ended 31 October 2002, we commented that our organisation and structure is able to take maximum advantage of opportunities. We have proved this and are positioned to support an increased rate of growth in the second half of the year. We are confident that activity in our target markets will increase as the regulatory requirements become more acute and as companies seek to improve their corporate governance. We will remain focussed on our two target markets of operational risk and energy credit risk management. We will continue to control expenses and remain committed to returning the Group to profitability. In the longer term, we intend to remain in the risk management space and to exploit other market sectors with our existing products. We will grow license rather than per diem-based fees. We will continue to pursue high-margin services in sectors where we have specific expertise and which are under-served by existing providers. Press enquiries: Sandra Kelly, CFO Raft International plc + 44 (0)20 7847 0400 Shane Dolan Biddicks + 44 (0)20 7448 1000 Consolidated profit and loss account For the six months ended 30 April 2003 6 months to 30 6 months to 30 Year to 31 April 2003 April 2002 October 2002 (unaudited) (unaudited) (audited) Notes #'000 #'000 #'000 ------- ---------- ---------- ---------- Turnover 4,175 3,394 6,666 Cost of sales (2,499) (2,322) (4,579) ---------- ---------- ---------- Gross profit 1,676 1,072 2,087 Administrative (2,223) (2,297) (4,355) expenses ---------- ---------- ---------- Operating loss (547) (1,225) (2,268) Interest receivable and 49 77 155 other income ---------- ---------- ---------- Loss on ordinary (498) (1,148) (2,113) activities before taxation Tax on loss on ordinary 2 (1) (1) 75 activities ---------- ---------- ---------- Loss after taxation (499) (1,149) (2,038) retained for the ---------- ---------- ---------- period Loss per share (pence) 3 (0.76) (1.75) (3.10) ---------- ---------- ---------- Fully diluted loss per 3 (0.76) (1.75) (3.10) share (pence) ---------- ---------- ---------- Consolidated balance sheet As at 30 April 2003 30 April 2003 30 April 2002 31 October 2002 (unaudited) (unaudited) (audited) #'000 #'000 #'000 ---------- ---------- ---------- Tangible Fixed Assets 231 440 322 ---------- ---------- ---------- Current Assets Debtors 2,435 1,438 1,562 Cash at bank and in hand 2,643 4,478 3,709 ---------- ---------- ---------- 5,078 5,916 5,271 Creditors: amounts falling (1,584) (1,193) (1,355) due within one year ---------- ---------- ---------- Net current assets 3,494 4,723 3,916 ----------------------------- ---------- ---------- ---------- Total assets less current 3,725 5,163 4,238 liabilities Creditors: amounts falling due after more than one year - (34) - ---------- ---------- ---------- 3,725 5,129 4,238 ---------- ---------- ---------- Capital and reserves Called up share capital 3,286 3,286 3,286 Share premium account 5,765 5,765 5,765 Profit and loss account (5,326) (3,922) (4,813) ---------- ---------- ---------- Equity shareholders' funds 3,725 5,129 4,238 ---------- ---------- ---------- Consolidated cash flow statement For the six months ended 30 April 2003 6 months to 30 6 months to 30 Year to 31 April 2003 April 2002 October 2002 (unaudited) (unaudited) (audited) Notes #'000 #'000 #'000 ---------- ---------- ---------- Net cash outflow from 4 (1,132) (808) (1,642) operating activities Return on Investments and servicing of financing Interest received 49 77 155 ---------- ---------- ---------- Taxation 63 (52) (67) Capital Expenditure Purchase of tangible (46) (19) (31) fixed assets ---------- ---------- ---------- Net cash outflow before (1,066) (802) (1,585) financing Financing Capital element of hire purchase contract payments (8) (8) (16) Repayment of loans - (7) (7) ---------- ---------- ---------- Decrease in cash in the (1,074) (817) (1,608) period ---------- ---------- ---------- Notes to the accounts For the six months ended 30 April 2003 1. Basis of preparation This interim statement has been prepared on the basis of accounting policies set out in the Group financial statements for the year ended 31 October 2002. This statement does not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The statement is unaudited but has been reviewed by the group's auditors, Baker Tilly. The figures for the year ended 31 October 2002 have been extracted from the full Annual Report and Accounts filed with the Registrar of Companies on which the auditors gave an unqualified report. 2. Taxation The charge to taxation is an estimated based on the anticipated effective rate of tax for the year ending 31 October 2003. 3. Loss per share The calculations of loss per 5p ordinary share are based on the loss on ordinary activities after taxation and the weighted average number of shares detailed below: 30 April 30 April 2002 31 October 2002 2003 (unaudited) (audited) (unaudited) #'000 #'000 #'000 ----------- ---------- ----------- Basic and diluted loss attributable to ordinary shareholders (499) (1,149) (2,038) ----------- ---------- ----------- Number Number Number ----------- ---------- ----------- Weighted average number of 65,720,874 65,720,874 65,720,874 ordinary shares Dilutive share options - - - ----------- ---------- ----------- Adjusted weighted average number of ordinary Shares 65,720,874 65,720,874 65,720,874 ----------- ---------- ----------- Loss per share (pence) (0.76) (1.75) (3.10) ----------- ---------- ----------- Dilutive loss per share (0.76) (1.75) (3.10) (pence) ----------- ---------- ----------- Notes to the accounts For the six months ended 30 April 2003 4. Cash Flow Reconciliation of operating loss to net cash outflow from operations 6 months to 6 months to Year to 31 30 April 2003 30 April 2002 October 2002 (unaudited) (unaudited) (audited) #'000 #'000 #'000 ----------- ----------- ----------- Operating loss (547) (1,225) (2,268) Depreciation 141 161 287 Increase in provisions - - (2) (Increase)/decrease in (899) 152 124 debtors Increase in creditors 173 104 217 ----------- ----------- ----------- (1,132) (808) (1,642) Reconciliation of net cash outflow to movement in funds 6 months to 30 6 months to 30 Year to 31 April 2003 April 2002 October 2002 (unaudited) (unaudited) (audited) #'000 #'000 #'000 ------------ ----------- ----------- Decrease in cash in the (1,074) (817) (1,608) period Exchange adjustments on foreign currency Investments 8 - 22 Cash outflow from hire 8 8 16 purchase Cash outflow from loans - 7 7 ------------ ----------- ----------- Change in net funds (1,058) (802) (1,563) arising from cash flow Movement in funds in the (1,058) (802) (1,563) period Net funds at the start of 3,697 5,260 5,260 the period ------------ ----------- ----------- Net funds at the end of 2,639 4,458 3,697 the period ------------ ----------- ----------- Analysis of net funds Exchange 1 November 2002 differences Cash flow 30 April 2003 #'000 #'000 #'000 #'000 ----------- ------------ ---------- ---------- Cash at Bank 3,709 8 (1,074) 2,643 Hire Purchase (12) - 8 (4) Contracts ----------- ------------ ----------- ----------- 3,697 8 (1,066) 2,639 ----------- ------------ ----------- ----------- This information is provided by RNS The company news service from the London Stock Exchange END IR EAKKEALNDEFE
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