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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Bus.Sys.Grp | LSE:BSG | London | Ordinary Share | GB0008222043 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 18.75 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number : 6254I Business Systems Group Hldgs PLC 21 November 2008 21 November 2008 Business Systems Group Holdings plc ('BSG' or the 'Group') Interim results for the six months ended 30 September 2008 Business Systems Group Holdings plc, which designs, deploys and operates a range of managed services, information technology products and solutions, today announces interim results for the six months ended 30 September 2008. Contacts: Business Systems Group Holdings plc Nick Gerard, Group Chief Executive Tel: 020 7880 8888 James Wheaton, Group Finance Director Nominated adviser and broker: KBC Peel Hunt Oliver Scott Tel: 020 7418 8900 Richard Kauffer CHAIRMAN'S STATEMENT I am pleased to present the results for the Group for the six months ended 30 September 2008. It has been an encouraging six months which has seen increased profitability and continued growth in Managed Services. Business Systems Group (BSG) has three businesses; Managed Services, Hardware supply and Solutions (application development). While all three businesses are targeted to increase profitability, it is growth of the Managed Services business that is core to the Group's strategy. Managed Services typically are sold to medium sized businesses for an initial contract period of three to five years. The service will usually entail the monitoring and support of customer applications on a system that has been designed and deployed by BSG, and often on a platform owned by the Group. Hence we aim to have a long-term and strategic partnership with our customers, which should produce predictable cash flows and lower sales costs. The key points to note for the period were: * In the first six months of the year, the Group produced an operating profit of £544k compared with £225k in the corresponding period of the prior year, a rise of 142%. The profit before tax was £808k, up from £465k in the same period of the prior year, a rise of 74%. * EBITDA* grew to £975k for the six months, up from £552k in the corresponding period of the prior year, a rise of 77%. * Revenue rose by 14% from £15.8m to £18.0m. This reflected growth in all divisions. Compared to the same period a year before Hardware grew by 14%, Managed Services by 12% and Solutions by 18%. * Contractual revenues grew to an annualised £8.8m in September 2008, from an annualised £8.4m in March 2008, an increase of £400k. * Gross margins reflected the rise in services sales with an increase from 21% in the previous financial year to 22% in the first six months of this year. Importantly the gross margin on Managed Services rose from 28% last year to 32%, demonstrating the economies of scale possible in this business. * The Group's balance sheet remains strong with £8.1m cash and no debt. This compares with £7.1m of cash a year ago. * Earnings per share were 1.04p, up from 0.61p in the same period in 2007, a rise of 70%. *Earnings before interest tax depreciation and amortisation (EBITDA) is operating profit plus depreciation. Outlook The Group has performed strongly in the first six months of this year. It is particularly pleasing to report that contractual revenues have reached a new record for the Group, and that profit margins in this business are improving. The Board expects these trends to continue in the second half of the year, with the share of gross profit arising from Managed Services likely to reach 50% of the Group's total for the first time. This will help to protect the Group from any wider slow down in demand for IT as the macro economic environment deteriorates. While there is likely to be some impact on project driven revenues, we will work hard with our customers to ensure they reap the benefits from harnessing the latest advances in information technology as they address the challenges in their own markets. At the same time our investment in Managed Services, and the growth of contractual revenues, will continue. Vin Murria Chairman 20 November 2008 CONSOLIDATED INCOME STATEMENT Unaudited Unaudited AuditedYear ended 31 Six months to 30 Six months to 30 March2008 September September 2008 2007 Notes £*000 £*000 £*000 Revenue 2 17,970 15,823 31,427 Cost of sales (14,078) (12,664) (24,891) Gross profit 2 3,892 3,159 6,536 Administrative expenses (3,348) (2,934) (6,120) Operating profit 2 544 225 416 Finance income 264 240 509 Profit before taxation 808 465 925 Taxation 3 - - - Profit for the period 2 808 465 925 Basic earnings per share 5 5 1.04p 1.02p 0.61p 0.60p 1.22p 1.18p Diluted earnings per share CONSOLIDATED BALANCE SHEET Unaudited at Unaudited at Audited at 30 September 30 September 31 March 2008 2007 2008 £'000 £'000 £'000 Non-current Assets Property, plant and equipment 1,603 1,393 1,534 1,603 1,393 1,534 Current Assets Inventories 131 78 95 Trade and other receivables 7,084 7,811 5,784 Cash and cash equivalents 8,099 7,140 9,331 15,314 15,029 15,210 Current Liabilities Trade and other payables (7,874) (8,452) (8,217) Net Current Assets 7,440 6,577 6,993 Net Assets 9,043 7,970 8,527 Equity Share capital 4,209 4,209 4,209 Own shares held (749) (872) (749) Retained earnings 5,609 4,725 5,114 EBT reserve (26) (92) (47) Total Equity 9,043 7,970 8,527 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Own Retained earnings EBT Total capital shares reserve held £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2007 4,209 (872) 4,255 (93) 7,499 Profit for the period - - 465 - 465 Movement in reserves from EBT redemptions - - - 1 1 Share-based payment - - 5 - 5 Balance at 30 September 2007 4,209 (872) 4,725 (92) 7,970 Share Own Retained earnings EBT Total capital shares reserve held £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2008 4,209 (749) 5,114 (47) 8,527 Profit for the period - - 808 - 808 Movement in reserves from EBT redemptions - - (5) 21 16 Dividends - - (311) - (311) Share-based payment - - 3 - 3 Balance at 30 September 2008 4,209 (749) 5,609 (26) 9,043 CONSOLIDATED CASH FLOW STATEMENT Audited Unaudited Unaudited Six Six Year ended months to months to 30 30 31 March September September 2008 2007 2008 £*000 £*000 £*000 Cash flows from operating activities Profit after taxation 808 465 925 Adjustments for: Depreciation 431 327 692 Share-based payment 3 5 13 Interest income (264) (240) (509) Decrease in provisions - (150) (150) Operating cash flows before 978 407 971 movement in working capital (Increase)/decrease in (36) 63 46 inventories (Increase)/decrease in trade (1,300) (1,593) 434 and other receivables (Decrease)/increase in trade (345) 263 28 payables Cash (used)/generated from (703) (860) 1,479 operations Income taxes paid - - - Net cash (outflow)/inflow from (703) (860) 1,479 operating activities Cash flows from investing activities Purchase of property, plant (501) (485) (991) and equipment Interest received 264 240 509 Net cash used in investing (237) (245) (482) activities Cash flows from financing activities Proceeds of sale of shares 16 1 6 from EBT Purchase of shares from 3 - 84 treasury Dividends paid (311) - - Net cash (used)/generated from (292) 1 90 financing activities Net (decrease)/increase in (1,232) (1,104) 1,087 cash and cash equivalents Cash and cash equivalents at 9,331 8,244 8,244 beginning of period Cash and cash equivalents at 8,099 7,140 9,331 end of period NOTES 1. Basis of Preparation These interim condensed consolidated financial statements are for the six months ended 30 September 2008. They have been prepared on a basis consistent with anticipated IFRS (International Financial Reporting Standards) accounting policies based on those IFRS which are expected to be endorsed by the European Commission by the time the Group prepares its consolidated financial statements as at 31 March 2009. They do not include all the information required for full annual financial statements. These financial statements have been prepared under the historical cost convention. The financial information for the six months ended 30 September 2008 and 30 September 2007 have been neither audited nor reviewed and does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial statements and statutory accounts for the year ended 31 March 2008 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985. The interim results for the six months ended 30 September 2008 were approved by the Board of Directors on 20 November 2008. The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting policies, the reported amounts of balance sheet items at the period end and the reported amount of revenue and expense during the reporting period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. However, the actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. The recognition of revenue and profit on projects which span the period end constitutes the main area of judgement exercised by the Board in respect of the Group's results. The Board has relied on its experience and that of the teams involved and project management methodologies used by the business to estimate the final outcome of each project, and to recognise the appropriate portion for the period. Additionally the Board exercises judgement in assessing the extent to which a deferred tax asset is recognised, based on the probability that future profit will be available to utilise the asset. The accounting policies which the Group has adopted under IFRS have been applied consistently to all periods presented. Basis of Consolidation The Group accounts incorporate the results of the Company and its subsidiaries, Business Systems Group Limited and Webgenerics Limited. The principal activities of the Group are the provision of managed IT services to customers, and the design and deployment of IT infrastructure solutions. 2. Business Segmentation The Group's turnover and profit on ordinary activities are derived entirely from its principal activity. For management purposes the Group had three operating units during the period; Hardware, Managed Services and Solutions (application development). These units are the primary segments of the Group. Unaudited Unaudited Audited Six months to Six months to Year ended 30 September 30 September 31 March 2008 2007 2008 £'000 £'000 £'000 Revenue Hardware 10,690 9,392 18,223 Managed Services 5,480 4,910 10,163 Solutions 1,800 1,521 3,041 Total 17,970 15,823 31,427 Gross Profit Hardware 1,310 1,181 2,410 Managed Services 1,755 1,348 2,892 Solutions 827 630 1,234 Total 3,892 3,159 6,536 Operating profit Hardware Managed Services 672 546 1,151 Solutions 879 589 1,297 Central costs 647 522 981 Operating profit (1,654) (1,432) (3,013) Finance income 544 225 416 Profit for the period 264 240 509 808 465 925 The operations are integrated to such an extent that it is not practical to disaggregate the assets and liabilities of the Group into segments. 3. Taxation The Group has not incurred any taxation in the period due to the losses available for relief. A deferred tax asset has not been recognised in respect of timing differences relating to depreciation in excess of capital allowances claimed and losses carried forward as there is insufficient evidence that the asset will be recovered. 4. Dividend No interim dividend will be paid in respect of the six month period ending 30 September 2008 (2007: nil). 5. Earnings per share Basic earnings per share has been calculated by dividing the profit on ordinary activities after taxation by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential ordinary shares. The Group has only one category of dilutive potential ordinary shares, those share options granted under the Enterprise Management Incentive Plan. Unaudited Unaudited Unaudited Six months to 30 Six months to 30 Year ended September September 31 March 2008 2007 2008 Profit for the financial period and basic and diluted earnings attributable to ordinary shareholders (£'000) 465 808 925 Weighted average number of ordinary shares ('000) 77,633 75,946 76,079 Effect of dilutive share 2,204 options ('000) 1,405 1,985 Adjusted weighted average number of ordinary shares 79,038 78,150 78,064 ('000) Earnings per share 1.04p 0.61p 1.22p Diluted earnings per share 1.02p 0.60p 1.18p 6. Copies of Interim Report The interim report will be mailed to shareholders and copies will also be available at the Company's registered office at BSG House, 226-236 City Road, London, EC1V 2TT and at the Company's website at www.bsg.co.uk. This information is provided by RNS The company news service from the London Stock Exchange END IR URVNRWARAUAA
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