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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Intechnology | LSE:ITO | London | Ordinary Share | GB0001388932 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 24.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1317U
InTechnology PLC
15 November 2000
INTECHNOLOGY PLC ANNOUNCES MAIDEN INTERIM RESULTS FOR THE
PERIOD ENDED 30 SEPTEMBER 2000
Continued high demand for data storage boosts revenues and
profits, supported by strong interest in new online data
management services
FINANCIAL HIGHLIGHTS
* Profit before tax and goodwill for the post acquisition
period 24 July to 30 September 2000 of #1.5 million and
revenues of #29.9 million
DIVISIONAL TRADING HIGHLIGHTS
* SSS (Storage Solutions and Services) division posts
record performance
6 months to 12 months to
30 Sept 2000 31 March 2000
#M #M
Revenue 71.9 101.7
Profit before tax 3.6 5.5
* VBAK (Online back up and restore service) launched, #1
million contracts won in first month's trading
* AIP (Advanced Infrastructure Provisioning) #6.1 million
contracts won including BSkyB and Total Systems Services
Inc.
* Customers and major suppliers respond positively to new
added value services
Commenting on the results, Lord Parkinson, Chairman,
InTechnology plc said:
"These above expectation results reflect the continuing
success of SSS and are a very encouraging start for our new
advanced data service businesses.
"The long standing and unique relationships with world class
manufacturers and corporate resellers enable us to take
advantage of the fast developing service provider and
utility computing markets.
"Our high margin recurring revenues through VBAK and AIP,
provide exciting prospects both in the UK and Europe for the
Company and its shareholders."
For further information:
Lord Parkinson Mark Way/Jonathon Brill
Chairman Bell Pottinger Financial
020 7353 9203 020 7353 9203
CHAIRMAN'S STATEMENT
I have pleasure in announcing the interim results of
InTechnology plc for the period 26 January 2000 to 30
September 2000. Although reflecting only two months post
acquisition trading, I hope these results will be reassuring
and confirm the shareholders' confidence in the commercial
and financial strategy which is now being implemented.
InTechnology plc was admitted to the Alternative Investment
Market (AIM) in March 2000, and on 24 July 2000 acquired
HOLF Technologies Limited (HOLF) and VData Limited (VData),
two complementary private companies controlled by Peter
Wilkinson, our CEO and majority shareholder. The commercial
strategy which I explain later clearly bears the stamp of
Peter Wilkinson and his experienced, talented team who have
worked together for many years and with whom I have been
associated as a non-executive director since 1996.
The Group's strategy outlined to shareholders at the time of
the HOLF and VData acquisitions has expanded further but
remains in broad terms the developing and selling of
"Advanced Data Technology Services".
Before moving to the interim results, I would like to take
this opportunity by thanking Mr Chris Akers who floated our
Company on AIM and successfully negotiated the acquisitions.
As you know Chris Akers subsequently resigned as a director
in order to pursue new business opportunities.
HIGHLIGHTS FROM THE INTERIM RESULTS
Interim results contain the post acquisition trading for the
period from 24 July to 30 September 2000.
#M
Turnover 29.9
====
EBITDA 1.7
Depreciation (0.3)
Goodwill (1.5)
----
Operating loss (0.1)
Net interest receivable 0.1
----
Profit before taxation 0.0
Taxation (0.4)
----
Loss for the period (0.4)
----
The balance sheet has cash of #31.3m of which #23.2m net of
expenses was raised from the rights issue and placing in
July 2000.
STRATEGIC DIRECTION
In order to increase shareholder value the following
strategy has been implemented.
* To develop strong recurring service revenues from the
VBAK and AIP divisions.
* To grow service revenues through Reseller
relationships. SSS already has strong existing
relationships with major UK Resellers and world class
IT suppliers such as Compaq, SUN Microsystems and IBM.
* To continue the development of services marketed only
through Resellers, helping our existing customers adapt
to changes in technology.
DIVISIONAL ANALYSIS OF RESULTS
SSS (Storage Solutions and Services)
This division had #29.6m of sales and contributed a profit
before taxation of #1.9m.
In the six months to 30 September 2000 sales were #71.9m
compared to the previous years total of #101.7m and profit
before taxation was #3.6m compared to the previous years
#5.5m.
SSS is in an expanding market concentrating on mid to high
end computer data storage products and services, and was not
affected by Y2K or any subsequent downturn.
SSS has recorded increasing revenues and profits over the
past five years.
VBAK and AIP
The service divisions VBAK and AIP completed product
development and customer beta testing during the last six
months and had revenues of #0.6m and a loss before taxation
of #0.4m in the post acquisition period. However, these
divisions have recurring revenues in contrast to product
sales in SSS. By 30 September 2000 contracts of in excess
of #7m had been signed.
VBAK (fully automated online data backup and restore service
for computer networks)
All research, development and product testing was completed
on time at the end of August 2000. Sales and marketing
commenced on 1 September 2000 and the first month's trading
was encouraging with 12 contracts worth just over #1m being
won. In the same period 10 Resellers were signed and the
VBAK prospect list has over 100 fully qualified prospects.
I feel we are well on track to sign up 75 customers by the
end of March 2001. These contracts will generate
substantial recurring monthly revenues in a market place in
which we are not aware of any competitive products.
AIP (Advanced Infrastructure Provisioning)
Our first data centre of 35,000 sq. ft. was commissioned on
time and went live on 1 September 2000. During September AIP
contracts to the value of #6.1m were confirmed, the major
customers being Total Systems Services Inc and BSkyB plc.
Our strategy of providing IT infrastructure only to
Resellers, ISP's and ASP's has been extremely well received
and we are confident that many of our existing Resellers
will take up our AIP services.
We have identified the specific locations for our new data
centre facilities, comprising 90,000sq. ft. adjacent to our
existing Harrogate site, and a further 150,000 sq. ft. in
Greater London. This will give us 275,000 sq. ft. of
commissioned data centres in the UK during 2001 equipped to
deliver IT infrastructure to the corporate and public
sectors. This is greater than envisaged at the time of the
acquisitions.
PRODUCT DEVELOPMENT
An integral part of our strategy is to offer our Resellers a
range of added value services which will be attractive to
their corporate customers and enable them to exploit
commercially our core infrastructure proposition.
The first of these services was VBAK and our development
team is currently working on additional services including
archiving and real time data replication.
MANAGEMENT
Building on our established management team, we are
extremely pleased to have attracted experienced managers and
staff to run AIP and VBAK. A number of these managers have
worked successfully with the Group's management team in
previous ventures.
FINANCIAL
We plan to keep growing the revenues and profits of SSS and
maintain its positive cash flow by control of working
capital. This cash flow together with the funds raised from
the placing and rights issue in July 2000 and asset finance
facilities will be used to fund the expansion of the VBAK
and AIP divisions.
EUROPEAN STRATEGY
We are currently in negotiations with a known management
team who have many years experience of the reseller market.
Their brief will be to roll out VBAK and AIP services
throughout Europe, and we expect to make a more detailed
announcement in the New Year.
We currently do not have plans to expand outside Europe.
AIM
We recognise that InTechnology plc currently has the second
largest market capitalisation on AIM and that some investors
have expressed a preference for a full listing. We are
therefore in discussions with our advisors about a move up
to the full market.
OUTLOOK
We remain convinced that InTechnology is well positioned to
profit from opportunities arising from the development of
our existing services and the forecast growth in utility
computing, data storage and online services. The
combination of our three operating divisions, the strength
of the established management team and technical expertise
within the company, the long standing relationships with
leading computer manufacturers and corporate resellers makes
our Company unique in its chosen field.
INTECHNOLOGY plc
Consolidated Profit and Loss Account
For the period ended 30 September 2000
Period ended 30
September 2000
(Unaudited)
Notes #'000
Turnover
Acquisitions 29,898
Cost of sales (25,952)
--------
Gross profit 3,946
Administrative expenses (4,075)
EBITDA 1,700
Depreciation (335)
Amortisation of goodwill (1,494)
Operating loss
Continuing operations (223)
Acquisitions 94
--------
Total operating loss (129)
Net interest receivable 128
--------
Loss before taxation (1)
Taxation 4 (448)
--------
Loss for the period (449)
========
Basic (loss)/ 5
earnings per share
Loss per share (0.99)p
Adjusted earnings per
share 2.30p
Diluted (loss)/ 5
earnings per share
Loss per share (0.92)p
Adjusted earnings per
share 2.13p
EBITDA comprises Earnings before Interest Taxation,
Depreciation and Amortisation
There is no difference between the loss on ordinary
activities for the period ended 30 September 2000 and its
historical cost equivalent.
There are no recognised gains or losses other than the loss
for the period.
INTECHNOLOGY plc
Consolidated Balance Sheet
As at 30 September 2000
As at 30
September 2000
(Unaudited)
Notes #'000
Fixed assets
Intangible fixed assets 6 158,414
Tangible fixed assets 7,505
Investment 350
--------
166,269
Current assets
Stocks 10,308
Debtors 23,300
Cash at bank and in hand 31,376
--------
64,984
Creditors:
Amounts falling due
within one year (33,139)
--------
Net current assets 31,845
--------
Total assets less
current liabilities 198,114
Creditors:
Amounts falling due
after more than one year (8,355)
--------
189,759
========
Capital and reserves
Called up equity share
capital 8 1,380
Non-equity share capital 8 480
Share premium account 9 188,348
Profit and loss account 9 (449)
--------
Shareholders' funds 9 189,759
========
Shareholders' funds
comprise:
Equity interests 187,519
Non-equity interests 2,240
--------
189,759
========
INTECHNOLOGY plc
Consolidated Cash Flow Statement
Period Ended 30 September 2000
As at 30
September 2000
(Unaudited)
Notes #'000
Net cash inflow from
operating activities 10 3,597
Returns on investments
and servicing of finance 11 128
Net capital expenditure
and financial investment 11 (1,116)
Acquisitions and
disposals 11 (5,859)
--------
Cash outflow before
financing (3,250)
Financing 11 34,626
--------
Increase in cash in the
period 12 31,376
========
INTECHNOLOGY plc
Notes to the Interim Results
For the Period Ended 30 September 2000
1 Accounting Policies
Basis of preparation
The interim results have been prepared under the
historical cost convention, and in accordance with
applicable accounting standards.
InTechnology plc was incorporated on 26 January 2000
and its first accounting period will end on 31 March
2001. The Company was admitted to the Alternative
Investment Market (AIM) of the London Stock Exchange on
2 March 2000 and on 24 July 2000 acquired all the share
capital of HOLF Technologies Limited (HOLF) and VData
Limited (VData), both connected private companies. At
the same time there was a rights issue and placing to
fund the acquisitions and provide working capital.
Basis of consolidation
The consolidated results incorporate the results of the
company and all group undertakings. The results of the
companies acquired or disposed of are included in the
consolidated profit and loss account from the dates of
acquisition or the dates of disposal.
Goodwill
Goodwill arising on consolidation, representing the
excess of the fair value of the consideration over the
fair values of the identifiable net assets acquired, is
capitalised and amortised on a straight line basis over
its estimated useful economic life. The estimated
useful economic life of goodwill arising on the
acquisition of HOLF and VData has been assessed by the
Directors at 20 years.
Recognition of revenue
Turnover represents the amounts invoiced to customers
(exclusive of VAT). Revenue on the outright sale of
equipment and software is recognised on invoice at the
time of despatch. Service revenues are recognised over
the period to which the service relates.
2 The financial information for the period ended 30
September 2000 has not been audited and does not constitute
financial statements within the meaning of s240 of the
Companies Act 1985.
3 The pro forma financial information relating to the
period 1 April 1999 to 31 March 2000 for HOLF does not
constitute financial statements within the meaning of s240
Companies Act 1985.
4 Taxation
The tax charge has been calculated by applying the
directors' best estimate of the effective rate on the
taxable profits of the group for the full period at
30%. The profit before taxation as set out in the
profit and loss account has been adjusted to add back
goodwill which is not allowable for tax purposes.
5 Earnings per share
The basic and diluted earnings per share figures have
been calculated using the loss for the period
attributed to ordinary shareholders of #448,977.
The adjusted earnings per share is based on the loss
after taxation after adding back the amortisation of
goodwill amounting to #1,493,648.
The weighted average number of shares in issue during
the period may be reconciled to the number used in the
diluted earnings per share calculation as follows:
Weighted average number of shares
In issue during the period 45,325,282
----------
Used in basic earnings per share
calculation 45,325,282
----------
Issuable on conversion of
outstanding options 3,726,474
----------
Used in the diluted earnings per
share calculation 49,051,755
==========
The Group acquired HOLF and VData, its two trading
businesses, on 24 July 2000. The loss per share (based
on the closing number of shares) incurred during the
period from 24 July 2000 to 30 September 2000 was 0.36
pence.
6 Intangible fixed assets
As at 30
September 2000
(Unaudited)
#'000
Goodwill arising on acquisition:
- HOLF (See Note 7a) 34,006
- VData(See Note 7b) 125,902
--------
159,908
Amortisation of Goodwill (1,494)
--------
Net Book Value 158,414
========
7 Acquisitions
a) HOLF
On 24 July 2000 the group acquired 100% of the issued
share capital of HOLF for a consideration of
#39,000,000 funded by the issue of 20,102,904 1 pence
ordinary shares at a market value of #1.50 each with a
value of #30,154,356 and a cash consideration of
#8,845,644.
The following table sets out the book value of the
identifiable assets and liabilities acquired and their
fair value to the group
Book Fair value Fair
value adjustments value
#'000 #'000 #'000
Net assets acquired
Fixed assets 3,982 - 3,982
Goodwill 2,242 (2,242) -
Stocks 9,033 - 9,033
Debtors 27,851 - 27,851
Cash at bank and in
hand 4,424 - 4,424
Creditors due
within one year (32,252) - (32,252)
Creditors due after
one year (7,888) - (7,888)
-------- -------- --------
Net assets 7,392 (2,242) 5,150
======== ======== --------
Consideration
20,102,904 ordinary
shares @ #1.50 each 30,154
Cash 8,846
--------
39,000
--------
Cost of the
acquisition 156
--------
Goodwill 34,006
========
The unaudited results of HOLF for the period 1 April
2000 to 30 September 2000 together with the pro forma
results for the period ended 31 March 2000 are shown
below:
to date Post Unaudited Pro-
of acquisition interim forma
acquisition accounts
1 April 24 July 1 April 1 April
2000 2000 2000 1999
to to to to
24 July 30 Sept 30 Sept 31 March
2000 2000 2000 2000
#'000 #'000 #'000 #'000
Turnover 42,267 29,608 71,875 101,677
Cost of
sales (38,043) (26,083) (64,126) (89,342)
-------- -------- -------- -------
Gross profit 4,224 3,525 7,749 12,335
Administrative
expenses (2,156) (1,450) (3,606) (6,148)
-------- -------- -------- -------
EBITDA 2,068 2,075 4,143 6,186
Depreciation (217) (149) (366) (314)
-------- -------- -------- -------
Operating
profit 1,851 1,926 3,777 5,872
Net Interest (167) (56) (223) (387)
-------- -------- -------- -------
Profit
before 1,684 1,870 3,554 5,486
taxation
======== ======== ======== =======
To enable a clear comparison to the trading for the
period 1 April 1999 to 31 March 2000 a pro forma profit
and loss account was prepared as an addendum to the
audited accounts of HOLF. This combined the audited
trading results for Integrated Technology (Europe)
Limited (ITE) for the period 1 April 1999 to 15 July
1999 and the audited trading results for HOLF for the
period 15 July 1999 to 31 March 2000, following the
acquisition by HOLF of ITE on 15 July 1999.
b) VData
On 24 July 2000 the group acquired 100% of the issued
share capital of VData for a consideration of
#126,000,000 funded by the issue of 83,450,000
1 pence ordinary shares at a market value of #1.50 each
with a value of #125,175,000 and a cash consideration
of #825,000.
The following table sets out the book and fair value of
the identifiable assets and liabilities acquired
Book &
fair value
#'000
Net assets acquired
Fixed assets 3,016
Investment 75
Debtors 449
Cash at bank and in hand 49
Creditors due within one year (1,204)
Creditors due after one year (1,782)
--------
Net assets 603
--------
Consideration
83,450,000 ordinary shares @ #1.50 each 125,175
Cash 825
--------
126,000
--------
Cost of the acquisition 505
--------
Goodwill 125,902
========
The unaudited results for VData for the period 1
January 2000 to 30 September 2000 together with the
audited results for the period ended 31 December 1999
are shown below:
to date post unaudited audited
of acquisition interim
acquisition accounts
1 January 24 July 1 January 4 January
2000 2000 2000 1999
to to to to
24 July 30 Sept 30 Sept 31 Dec
2000 2000 2000 2000
#'000 #'000 #'000 #'000
Turnover 295 577 872 28
Cost of sales (301) (144) (445) (26)
-------- -------- -------- -------
Gross (loss)/
profit (6) 433 427 2
Administrative
expenses (1,383) (574) (1,957) (1,122)
-------- -------- -------- -------
EBITDA (1,389) (141) (1,530) (1,120)
Depreciation (490) (185) (675) (389)
-------- -------- -------- --------
Operating loss (1,879) (326) (2,205) (1,509)
Net Interest (89) (23) (112) (44)
-------- -------- -------- -------
Loss before
taxation (1,968) (349) (2,317) (1,553)
======== ======== ======== =======
8 Share capital
The Company was incorporated on 26 January 2000 as
Expense plc (registered number 3916586). On 1 February
2000, the Company's name was changed to InTechnology
plc.
On 2 March 2000 the Company received #2,750,000
proceeds in respect of the placing of 11,000,000
ordinary shares of 5 pence each at a premium of 20
pence per ordinary share.
On 24 July 2000 at an Extraordinary General Meeting
each existing 5 pence ordinary share was sub-divided
into one new 1 pence ordinary share and four 1 pence
deferred shares. The Company's authorised share
capital was increased from #1,000,000 to #3,000,000 by
the creation of 200,000,000 new 1 pence ordinary
shares.
On 24 July 2000 the Company issued 125,999,929 shares
in respect of the placing, rights issue and the
acquisition of HOLF and VData.
Share capital Number Value
#'000
Authorised share capital
Ordinary shares of 1 pence
each 252,000,000 2,520
Deferred shares of 1 pence
each 48,000,000 480
---------- ------
Total 300,000,000 3,000
========== ======
Issued and fully paid
Ordinary shares of 1 pence
each 137,999,929 1,380
Deferred shares of 1 pence
each 48,000,000 480
---------- ------
Total 185,999,929 1,860
========== ======
9 Reconciliation of movement in equity shareholders'
funds
#'000
Retained loss for the period (449)
Issue of share capital
(net of costs) 187,968
--------
Net additions to equity
shareholders funds 187,519
Equity shareholders' funds at
26 January 2000 -
--------
Equity shareholders' funds at
30 September 2000 187,519
========
Capital and reserves
Equity Deferred Share Profit Total
share shares premium and
capital account loss
account
#'000 #'000 #'000 #'000 #'000
At 26 January
2000 - - - - -
Issue of
shares:
- Formation 10 40 - - 50
- Placing on
2 March 2000 110 440 2,200 - 2,750
- Placing on
24 July 2000 164 - 24,506 - 24,670
- Rights
issue on 24
July 2000 60 - 8,940 - 9,000
- Consideration
for
acquisition 1,036 - 154,294 - 155,330
Share issue
costs - - (1,592) - (1,592)
)
Loss for the
period - - - (449) (449)
------ ------- ------ ------ -------
1,380 480 188,348 (449) 189,759
====== ======= ======= ====== =======
10 Reconciliation of operating profit to operating cash
flows
Continuing Acquisitions Total
#'000 #'000 #'000
Operating (loss)/ (223) 94 (129)
profit
Depreciation charges - 335 335
Amortisation of - 1,494 1,494
goodwill
Increase in stocks - (1,275) (1,275)
Increase in debtors (28) 4,854 4,826
Increase/(decrease)
in creditors 78 (1,732) (1,654)
--------- --------- ------
Net cash (outflow)/
inflow from
operating activities (173) 3,770 3,597
========= ========= ======
11 Analysis of cash flows for headings netted in the cash
flow statement
#'000 #'000
Returns on investments and
servicing of finance
Interest received 208
Interest paid (80)
--------
Net cash inflow for returns
on investments and servicing
of finance 128
========
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (841)
Fixed asset investments (275)
--------
Net cash outflow for capital
expenditure and financial
investment (1,116)
========
Acquisitions and disposals
Cash paid for the acquisition
of HOLF and VData (9,671)
Costs of the acquisitions (661)
Cash acquired on acquisitions 4,473
--------
Net cash outflow for
acquisitions and disposals (5,859)
========
Financing
Issue of ordinary shares
- Formation 50
- Placing 2 March 2000 2,750
- Placing 24 July 2000 24,670
- Rights issue 24 July 2000 9,000
- Share issue costs (1,592)
--------
34,878
Repayment of secured loans (252)
--------
Net cash inflow from
financing 34,626
========
12 Reconciliation of net cash flow to movement in net
funds
Increase in cash in the period 31,376
Secured loans acquired on acquisition (9,417)
--------
Movement in net funds in the period 21,959
Net funds at 26 January 2000 -
--------
Net funds at 30 September 2000 21,959
========
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