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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Northgte.Inf. | LSE:NIS | London | Ordinary Share | GB0005583728 | ORD 10P |
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% | 95.25 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:0723T Northgate Information Solutions PLC 10 December 2003 10 December 2003 NORTHGATE INFORMATION SOLUTIONS plc Northgate announces strong interim results and the acquisition of an option to purchase Rebus HR Group Northgate Information Solutions plc, a supplier of software applications and outsourcing solutions to the public sector, human resources and corporate markets, today announces interim results for the six months ended 31 October 2003. Results highlights * Turnover up 28% to #50.6 million (2002: #39.6 million), including #7.4 million contribution from acquisitions * Operating profit from continuing operations, before exceptional items and amortisation of goodwill, up from #1.2 million to #2.4 million * Adjusted basic earnings per share up 66% to 0.73p (2002: 0.44p) * Significant strategic progress achieved, with three acquisitions, Cara Payroll Group Limited, blue 8 Technologies Limited and Hays Consulting & Solutions Group, completed and integrations progressing well Proposed acquisition of Rebus HR Group Today Northgate is also announcing that the Company has acquired an option to acquire Rebus HR Group. Details of this transaction are supplied in a separate release, and the company will be hosting a conference call this morning at 11am for analysts and investors to discuss these two announcements. Commenting on the results, Chief Executive Chris Stone said: "This has been a good first half for Northgate, as we have accelerated our strategic development, successfully integrating our recent acquisitions into our business, whilst increasing our operating margins both organically and by acquisition. Today's additional acquisition will bring further significant progress with our strategic objectives to deliver substantial value to our shareholders." Chairman Nick Irens added: "These are excellent results, showing progress both organically and from our recent acquisitions. We are focused on market segments that offer good growth prospects and continue to pursue the creation of value for our shareholders. Today's additional acquisition signals a step change for the group, and the outlook for the Northgate group has never been so exciting." For further information: Northgate Information Solutions 020 7404 5959 (On the day) Sandy Halse 01442 273000 (Thereafter) Brunswick Group Limited 020 7404 5959 Tom Buchanan / Sarah Tovey Conference call An analyst and investor conference call will take place today at 11am. To listen in please dial +44 (0) 1452 561263, pass code "Northgate". Cantos An interview with Chris Stone, Chief Executive in video/audio and text will be available from this morning on Wednesday 10th December 2003 on wwww.northgate-is.com and on www.cantos.com. Chairman's statement I am pleased to report excellent results for the Group for the first half of this financial year. During this period we have strengthened further our overall market position in both the HR and public sectors. Particularly pleasing is the successful integration of our acquisitions, already contributing to the Group results. During the last six months, Northgate has made good progress in all markets with turnover from continuing operations increasing to #50.6 million (2002: #39.6 million). During the closing weeks of the period, a number of significant contracts were signed earlier than expected. These included ten new contract wins for our Front Office solution, which brings the total number of Front Office customers to seventeen and makes Northgate a leading supplier of citizen relationship management solutions to Local Government. The increase in revenues, coupled with the continuing control on costs and the contribution from acquisitions, leads to operating margins across the Group before exceptional items and goodwill amortisation improving from 2.9% to 4.7%. Operating profit from continuing operations before exceptional items and amortisation of goodwill increased by 104% to #2.4 million (2002: #1.2 million). #0.7 million of this additional profit came from organic growth. During the half we made three acquisitions in the HR and public sectors. Since then, the recent acquisition of the PWA Group complements Northgate's acquisitions of Prolog Business Solutions in 2002, which brought us a strong position in the small to medium enterprise (SME) payroll market and which has already been integrated successfully within Northgate's HR division. It will also further strengthen the position created by the acquisition of Carapeople. In our public sector division, the acquisitions of blue 8 and Hays CSG significantly enhance Northgate's capabilities in the criminal justice arena. In light of our recent acquisition strategy and our aggressive focus on growing the business, the Directors have decided that a dividend would not be appropriate at present. Northgate finished the period with #6.8 million of cash, and an agreed loan facility of #12 million following the recently completed purchase of the freehold of Boundary Way, our headquarters. This acquisition removes the exposure to the uncertainties of future rent increases and has immediately reduced the Group's operational cost base. It has been a period of continued strategic progress for the Group. The businesses we have acquired are being successfully integrated, significantly enhancing our positions in our chosen market segments and improving our opportunities to deliver value to our shareholders. The Board remains confident in the prospects for the Group. With a continuing focus on cost control, Northgate is positioned well for the future. Nick Irens Chairman 10 December 2003 Chief Executive's review This has been a good first half for the Group. We have accelerated our strategic development, successfully integrating our recent acquisitions into our business, whilst increasing our operating margins across all divisions both organically and by acquisition. The progress we have made in the public sector and HR markets has been particularly encouraging with double-digit revenue growth, whilst our corporate sector activities have improved their margins. Public Sector Northgate's public sector revenues from continuing operations grew by 26% against the same period last year. Our public sector offer has seen considerable growth across the board for the six months and continues to offer substantial opportunities for the future. Our Front Office solutions performance has been particularly satisfying, signing ten new contracts earlier than expected in Northumberland and Somerset, bringing the total number of Front Office customers to seventeen, making Northgate a leading supplier of citizen relationship management solutions to Local Government. We have signed a third contract for our Assert product, a decision support tool for the administration of means tested benefits, with Cornish Key, a partnership which comprises Cornwall County Council and six district councils. We continue to have great hopes for the future success of this innovative, rules-based product. The acquisitions of the blue 8 and Hays CSG businesses have significantly enhanced the Group's capability in the criminal justice arena. The integration of these products has enabled Northgate to offer an extensive range of innovative data and performance management solutions and brings further opportunities for growth. The successful roll out of the London Congestion Charging Scheme with Northgate's Penalty Notice enforcement software and administration services continues to operate well and we are monitoring other potential opportunities that may arise. Northgate's software for the Home Office's trial of the Penalty Notice for Disorder scheme has been successful and is currently being rolled out to a number of police forces in the UK. We believe there are excellent prospects in this market where we can achieve a leading position. Overall, Northgate has considerably strengthened its position as a leading provider of IT solutions to the criminal justice and local government markets. Human Resources Systems Prolog Business Solutions and Carapeople have helped to increase HR revenues by 70% compared with the same period last year, and operating profit before exceptional items and goodwill amortisation by over 90%. The recent acquisition of the PWA Group, under the brand Empower, has further strengthened Northgate's overall market position, widening the offer into the SME market. The PWA Group is a welcome addition to our already comprehensive Human Resource offer and is an excellent fit within our existing HR business. Together Empower and ResourceLink complement the earlier acquisitions of Prolog and Carapeople, enabling Northgate to offer a comprehensive HR software and payroll proposition to the market. Overall Northgate now provides HR software and services to more than 1,500 UK and Irish clients with recent acquisitions adding to our already strong customer base generating additional growth opportunities for Northgate. Corporate sector Northgate's corporate sector division has performed satisfactorily in what continues to be uncertain market conditions with little sign of improvement in IT expenditure. We have seen some growth in revenues compared with the same period last year. This together with the continued success of our established software products has led to an increase in operating profit before exceptional items and goodwill amortisation of over 8%. Outlook Northgate has seen strong levels of organic and acquisitive growth for the six months and anticipates this to continue through to the full year. The Group now has an impressive portfolio of products and services, and is focused on managing our businesses effectively and leveraging the benefits of the recent deals. We are pleased with the growth being achieved as a result of the strategic focus of the Group, and will continue to seek further opportunities to deliver value to our shareholders going forward. Since the period end we have signed one more new Front Office contract and are currently preferred supplier with a further eight local authorities. Chris Stone Chief Executive 10 December 2003 Consolidated Profit & Loss Account (unaudited) 6 months ended ---------------- 31 October ------------ 2003 2002 ------ ------ #'000 #'000 ---------------------------------- ------- ------ TURNOVER Continuing operations 43,138 39,616 Acquisitions 7,426 - Discontinued operations - 1,918 ---------------------------------- ------- -------- Group turnover 50,564 41,534 Operating costs (including exceptional items) (50,094) (40,161) ---------------------------------- ------- -------- Group operating profit 470 1,373 ---------------------------------- ------- -------- Continuing operations: Operating profit before exceptional items and amortisation of goodwill 2,357 1,158 Exceptional items ( Note 4 ) (523) (281) Amortisation of goodwill (1,364) (46) ---------------------------------- ------- -------- Operating profit from continuing operations 470 831 Discontinued operations: Operating profit - 542 ---------------------------------- ------- -------- Group Operating Profit 470 1,373 ---------------------------------- ------- -------- Profit on sale of operations ( Note 5 ) - 28,114 Interest receivable 301 546 Interest payable and similar charges (369) (226) ------- -------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 402 29,807 Taxation on profit on ordinary activities (Note 5 ) (96) (3,460) ------- -------- RETAINED PROFIT FOR THE FINANCIAL PERIOD 306 26,347 ======= ======== EARNINGS PER ORDINARY SHARE ( Note 6 ) - basic 0.11p 9.27p - diluted 0.10p 8.99p - adjusted basic 0.73p 0.44p * - adjusted diluted 0.71p 0.43p * * The comparative figures for adjusted basic and adjusted diluted earnings per share have been restated to reflect discontinued activities and amortisation of goodwill Consolidated Balance Sheet (unaudited) 31 October 30 April 31 October ------------ ---------- ------------ 2003 2003 * 2002 ------ ------ ------ #'000 #'000 #'000 ------- ------- ------- Fixed assets Intangible assets 34,921 6,788 1,959 Tangible assets 22,679 5,032 4,264 Investments 1,059 1,098 1,137 --------- ------- -------- 58,659 12,918 7,360 Current assets Stocks 516 424 386 Debtors - due within one year 34,426 22,212 19,657 - due after one year 12,990 11,880 6,036 Investments ( Note 7 ) - - 20,085 Cash at bank and in hand 6,802 39,377 25,051 --------- ------- -------- 54,734 73,893 71,215 Creditors: amounts falling due within one year (47,724) (33,699) (32,420) --------- ------- -------- Net current assets 7,010 40,194 38,795 --------- ------- -------- Total assets less current liabilities 65,669 53,112 46,155 Creditors: amounts falling due after more than one year (12,855) (244) (292) Provisions for liabilities and charges (5,006) (6,792) (2,981) --------- ------- -------- Net assets 47,808 46,076 42,882 ========= ======= ======== Capital and reserves Called up share capital 28,727 28,713 28,708 Share premium account 38,156 38,123 38,114 Merger reserve 162 162 162 Profit and loss account (19,237) (20,922) (24,102) --------- ------- -------- Shareholders' funds - equity 47,808 46,076 42,882 ========= ======= ======== *audited Cash Flow Statement (unaudited) 6 months ended ---------------- 31 October ------------ 2003 2002 ------ ------ #'000 #'000 ------- ------- Operating Profit 470 1,373 Depreciation and Amortisation 2,906 1,371 Loss on disposal of tangible fixed assets 3 - Decrease in provisions (2,121) (854) Exceptional Operating Items 1,605 81 (Increase) / Decrease in debtors (1,667) 3,164 (Increase) / Decrease in stocks (69) 367 Increase / (Decrease) in creditors 3,118 (2,139) -------- ------- Net cash inflow from Operating Activities 4,245 3,363 Returns on investments and servicing of finance 198 432 Taxation (299) - Capital expenditure (18,079) (1,619) Acquisitions and disposals (30,433) 31,451 -------- ------- (44,368) 33,627 Financing 11,859 (381) -------- ------- (Decrease) / Increase in cash and cash (32,509) 33,246 equivalents ======== ======= Statement of Total Recognised Gains and Losses and Movements in Shareholders' Funds (unaudited ) 6 months ended ---------------- 31 October ------------ 2003 2002 ------ ------ #'000 #'000 ------- ------- Profit for the financial period 306 26,347 Currency translation differences 156 183 -------- -------- Total recognised gains and losses for the 462 26,530 period Credit in respect of share related award 1,223 44 charges New share capital subscribed (net of expenses) 47 156 Reduction in shares to be issued - (200) -------- -------- Increase in Shareholders' funds 1,732 26,530 Opening Shareholders' funds 46,076 16,352 -------- -------- Closing Shareholders' funds 47,808 42,882 -------- -------- Notes to the Report 1. Interim Report The information given here does not constitute statutory accounts within the meaning of section 235 of the Companies Act 1985. Statutory accounts in respect of the year ended 30 April 2003 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The audit report thereon did not contain a qualified audit opinion under section 237 (2) or (3) of the Companies Act 1985. The results for the six months to 31 October 2003 have been prepared using the same accounting policies as were used in the preparation of the Annual Report for the year ended 30 April 2003. The interim report will be sent to shareholders and copies will be available to the public at the registered office of the Company at Boundary Way, Hemel Hempstead, Hertfordshire HP2 7HU. This interim financial information was approved by the Board of Directors on 10 December 2003. 2. Acquisitions During the period, the Group acquired the entire issued share capital of Cara Payroll Group Limited and blue 8 Technologies Limited. In addition, the Group acquired the entire issued share capital of Hays Redfern Limited, together with the IT enablement Business of the Hays Group. The total cash paid for these acquisitions amounted to #32.3m, which includes a total of #20.2m paid in settlement of loans, overdrafts and other liabilities of the acquired businesses. The fair value of the net assets acquired, after settlement of the above liabilities, amounts to #2.9m. The resultant goodwill arising on these acquisitions of #29.4m has been capitalised and will be written off over a period of 10 years in line with the Directors' estimate of its useful economic life. Notes to the Report (Continued) 3. Segmental Analysis ------------------ ----------------- ---------------- Turnover Operating Profit / (Loss) 6 months ended 6 months ended 6 months ended 6 months ended 31 October 2003 31 October 2002 31 October 2003 31 October 2002 ----------------- ---------------- ----------------- --------------- #'000 #'000 #'000 #'000 ------- ------- ------- -------- Public Sector 20,477 19,526 1,358 1,157 Human Resources Systems 10,626 8,169 1,213 773 Corporate Sector 12,035 11,921 699 643 Administration costs - - (1,411) (1,415) ------------------ ---------- --------- ---------- --------- Continuing Operations 43,138 39,616 1,859 1,158 ------------------ ---------- --------- ---------- --------- Public Sector 4,167 - 239 - Human Resources Systems 3,259 - 259 - ------------------ ---------- --------- ---------- --------- Acquisitions 7,426 - 498 - ------------------ ---------- --------- ---------- --------- Total from continuing operations 50,564 39,616 2,357 1,158 Discontinued operations - 1,918 - 542 ------------------ ---------- --------- ---------- --------- Total 50,564 41,534 2,357 1,700 ------------------ ---------- --------- ---------- --------- Operating profit before exceptional items and goodwill amortisation 2,357 1,700 Exceptional items (523) (281) Amortisation of goodwill (1,364) (46) ---------- --------- Group Operating Profit 470 1,373 ========== ========= In the above analysis, all overhead costs have been allocated to continuing operations. This resulted in overhead costs being reallocated from discontinued operations in the prior period comparatives. In addition, certain administration costs relating to the Group's central activities have been separated, and the basis of allocating other overhead costs has been revised, so as to better reflect the business' operations. The prior period comparatives have been revised accordingly. 4. Operating Exceptional Items 6 months ended ---------------- 31 October ------------ 2003 2002 ------ ------ #'000 #'000 ------- ------- Exceptional operating items during the period represent : Re-organisation costs (893) (200) Property Provisions 1,975 - Employee share option scheme (1,605) (81) ------- -------- (523) (281) ======= ======== Notes to the Report (Continued) 5. Disposal of Health Business On 31 July 2002 the Group completed the disposal of its Health business. The disposal is analysed as follows: #'000 ------- Proceeds 33,000 Less: Costs of disposal (1,549) -------- Net proceeds 31,451 Assets sold (3,337) -------- Profit on sale 28,114 ======== The charge for taxation in the prior period includes #3,230,000 in respect of the profit on sale of operations of #28,114,000. 6. Earnings Per Share Basic earnings per share has been calculated based on the profit for the period of #306,000 (2002: #26,347,000) and by reference to 284,801,956 (2002: 284,316,830) ordinary shares being the weighted average number of shares in issue and ranking for dividend during the period, after excluding shares owned by the Northgate Employee Share Ownership Plan. Diluted earnings per share has been calculated on the profit of #306,000 (2002: #26,347,000) and after including the effect of all dilutive potential ordinary shares, which increases the average number of shares to 292,783,373 (2002: 292,972,221). The adjusted earnings per share figure has been calculated using the following adjusted earnings figures: 6 months ended ---------------- 31 October ------------ 2003 2002 ------ ------ #'000 #'000 ------- ------- Profit for the financial period 306 26,347 Amortisation of goodwill 1,364 46 Discontinued operations - (542) Profit on sale of operations, net of attributable taxation - (24,884) Exceptional Items, net of attributable taxation 421 281 ------- -------- Adjusted profit for the financial period 2,091 1,248 ======= ======== 7. Current Asset Investments Current asset investments comprise short-term liquid investments. Independent review report to Northgate Information Solutions plc Introduction We have been instructed by the Company to review the financial information set out on pages 5 to 10 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with Listing Rules of the Financial Services Authority that require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where they are to be changed in the next annual accounts, in which case any changes, and the reasons for them, are to be disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/ 4: Review of interim financial information issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of Group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2003. KPMG Audit Plc Chartered Accountants London 10 December 2003 This information is provided by RNS The company news service from the London Stock Exchange END IR IFFEIFSLAIIV
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