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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Project Telecom | LSE:PJT | London | Ordinary Share | GB0009668905 | ORD 0.25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0826S
Project Telecom PLC
27 February 2002
PRESS RELEASE
Wednesday, 27 February 2002
Project Telecom plc
Preliminary results for year ended 31 December 2001
Financial highlights (figures in £millions)
Year ended 31 December 2001 2000
Turnover 330 257 Up 28%
Operating profit (pre-goodwill amortisation & exceptional items) 11.8 6.3 Up 87%
Exceptional items 0.1 (1.3)
Profit before taxation (after exceptional items) 9.9 5.9 Up 69%
Net funds at year end 28.8 17.6 Up 64%
Basic earnings per ordinary share (pence) 2.79 1.93 Up 45%
Dividend per share (pence) 0.65p* 0.53p Up 23%
* Includes final proposed dividend of 0.4p to be approved at AGM 29/4/02
• Project Telecom, a leading UK independent provider of wireless services
to the corporate sector, achieved strong growth during 2001.
• Group turnover for the year increased by 28% to £330 million (2000 -
£257 million) and pre-tax profit, by 69% to £9.9 million (2000 - £5.9
million).
• Net funds increased by 64% to £28.8 million reflecting the tight control
over working capital and the Group's underlying cash generative business
model.
• The Corporate Services customer base grew by 86,000 to 138,000 (2000 -
52,000) with strong underlying organic growth in excess of 50%. Operating
profit increased to £6.3 million (2000 - £2.4 million).
• Retail Services achieved a 10% increase in turnover to £242 million
(2000 - £220 million). In difficult market conditions operating profits fell
to £2.6 million (2000 - £3.9 million).
• These results demonstrate Project Telecom's ability to prosper despite
challenging market conditions and management remains confident of the
prospects for the future.
Chief Executive, Tim Radford said: "In our first full year as a listed company,
we have demonstrated that our business model is robust and that the management
team has the strategy, skills and focus to deliver excellent and sustained
financial performance."
"During 2002 we will continue to focus on the growth of the customer base,
extending the range of services that we supply and building the Project Telecom
brand."
For further information contact:
Tim Radford
Chief Executive, Project Telecom
Tel: 07831 642911
Richard Cunningham
Finance Director, Project Telecom
Tel: 07785 707070
Simon Bloomfield
Partner, Bankside Consultants
Tel: 020 7444 4177
Mobile: 07771 758517
Michelle Doughty
Associate Partner, Bankside Consultants
Tel: 020 7444 4176
Mobile: 07767 633888
Full preliminary announcement follows
Chief Executive's Review
2001 was another exciting year in the development of Project Telecom with
further strong growth achieved in both turnover and profitability. In our first
full year as a listed company we have shown that our management team has the
strategy, skills and focus to deliver excellent and sustained financial
performance, evidenced by strong cash generation.
Turnover for the year to 31 December 2001 increased by 28% to £330 million (2000
- £257 million). Profit before tax was up 69% to £9.9 million (2000 - £5.9
million). Earnings per share rose 45% to 2.79 pence (2000 - 1.93 pence).
Strategy
During 2001 our strategic priority was to expand our Corporate Services
division, supporting the growth of our customer base with a high level of
investment in customer service facilities and people.
Our continuing strategy is to take advantage of the growth in demand for
telecommunications services and develop Project Telecom as a virtual network
operator, leveraging off our independence in the marketplace and supplying our
customers with impartial advice and a wide range of services from a variety of
network operators.
Corporate Services
Project Telecom is a leading UK independent provider of wireless services to the
corporate sector and has established an excellent platform to satisfy potential
demand for next-generation data services.
The Corporate Services division had another excellent year. Turnover rose to
£87.7 million (2000 - £36.3 million) producing operating profit post goodwill
amortisation up 168% to £6.3 million (2000 - £2.4 million).
As a result of organic growth and acquisitions made during the year, the
customer base grew by 86,000 to over 138,000 at the year-end (2000 - 52,000).
Our success in growing our customer base reflects management's focus on
supplying services to the business user, concentrating on high quality, high
spending corporate accounts and the delivery of excellent customer service.
In March we acquired the Cellnet and Vodafone customers of Hutchison Cellular
Services, a wholly owned subsidiary of Orange, for a cash consideration of £14
million. This was followed in July with the acquisition for £3.2 million of the
UK customer base and related debtors of Newgate Communications, which traded
under the NETnet brand.
Both these businesses supplied telecommunication services to a wide range of
business and major corporate accounts and were successfully integrated during
the year.
Once again the division continued to demonstrate its ability to win significant
new accounts including Sodexho, Northern Foods, Arriva, Dow Chemical and East
Riding of Yorkshire Council during 2001.
The pace of change in the sector shows no sign of slowing and with the launch of
the new mobile data networks capable of delivering much greater data speeds,
innovative new services and further exciting opportunities await us. The
delivery and integration of wireless data services to our customers presents us
with an excellent opportunity.
Project Telecom is ideally positioned to take advantage of the growing demand
for applications running over wireless networks as companies increasingly focus
on "wireless working". We are consulting with a number of our customers to
develop wireless strategies that will deliver improved levels of productivity,
effectiveness and performance.
Our aim is to be at the forefront of the provision of technology-led services,
supplying business benefits to our customers. As always, our focus will be on
delivering solutions rather than technologies.
Since the year-end, we have signed an agreement with BT Cellnet to resell
BlackBerry, the wireless business information system, which we are now supplying
to customers.
Retail Services
Against a background of difficult market conditions largely caused by the review
of prepay pricing policies by the mobile network operators, the Retail Services
division increased turnover although profits were lower than in the previous
year.
Turnover for the division, which focuses on the distribution of prepay products
and services, grew by 10% to £242.2 million (2000 - £220.4 million) producing
operating profits of £2.6 million (2000 - £3.9 million).
The effect of the network operators' review was to raise pricing levels of
prepay handsets, dramatically slowing demand for the product. Against this
background the decision was taken to reduce costs in this division to safeguard
its position in the market.
As a result, the division continued to operate successfully in a highly
competitive marketplace with major new accounts won during the year including
Poundstretcher, MOTO, Bargain Booze and Cellar 5 Group.
Retail Services continues to develop its transaction services and electronic
top-up business, offering retailers an in-store, on-line alternative to stocking
physical prepay top-up vouchers. Demand has been slower than initially expected
but we still believe that longer-term, e top-ups will succeed physical vouchers.
The impact of the extension of the transition period is largely mitigated by
our strong position in the distribution of physical vouchers. Over 2,500
terminals had been installed at the year-end.
In October the division established a strategic partnership with a major
clearing bank to offer additional transaction services over its network of
terminals including electronic funds transfer to retail customers.
Network Services
The Network Services division was established at the end of 2000 to develop a
range of value-added, data and fixed line services.
Progress was made in convergent applications involving the integration of the
web and the mobile phone and in bespoke text messaging solutions including bulk
text alerts, customised ringtones and screen logos.
Although revenues are still small we believe that the strategic importance of
this division will grow considerably as we move towards 3G mobile services and
we are confident that further progress will be made during the current year.
Investing in Customer Service
During the year, we continued to invest heavily in our customer management
facilities at our head office in Newark to ensure that we are able to manage our
rapidly growing customer base.
In August we announced our intention to build a new customer management and call
centre facility adjacent to our existing site, providing us with enhanced
facilities including an in-house training and technology centre for
demonstrating new services to both clients and staff.
Construction of this new building, which will cost the Group approximately £4
million, has commenced and is on track for completion during the third quarter
of 2002.
Employees
Once again, the part played by our staff and senior management alike has been
vital and I would like to thank and congratulate them for their contribution to
what was another very encouraging year. Our people make Project Telecom an
exciting place to work and their continued commitment will be crucial to the
future success of the Group.
Outlook
The outlook for Project Telecom is very exciting and we continue to seek
opportunities to expand the business both organically and through acquisition in
what remains a fast growing market. In the current year, we will also see the
full benefits of acquisitions made in 2001.
As we witness the arrival of 2nd generation wireless data services, the Group is
well positioned to capitalise on the many opportunities that will emerge. I
believe that our status as a virtual network operator, our focus on service
excellence and our independence, position us well for further growth.
During 2002 we will continue to focus on the growth of the customer base,
extending the range of services that we supply and building the Project Telecom
brand.
The current year has started well, with trading in line with management
expectations and I look forward to another successful year.
Tim Radford
Chief Executive
Project Telecom plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2001
Note 2001 2000
£000 as restated
(see note 7)
£000
Turnover 1
Continuing operations 293,281 256,663
Acquisitions 36,584 -
------------ ------------
329,865 256,663
Cost of sales (296,189) (234,994)
------------ ------------
Gross profit 33,676 21,669
------------ ------------
Administrative expenses (21,842) (15,338)
Exceptional items 3 78 (1,296)
Amortisation of goodwill (2,923) (65)
------------ ------------
Total Administrative expenses (24,687) (16,699)
------------ ------------
Operating profit (post goodwill amortisation)
Continuing operations 6,993 4,970
Acquisitions 1,996 -
------------ ------------
8,989 4,970
Interest payable and similar charges (214) (260)
Interest receivable and similar income 1,102 1,141
------------ ------------
Profit on ordinary activities before taxation 9,877 5,851
Tax on profit on ordinary activities (3,789) (2,040)
------------ ------------
Profit on ordinary activities after taxation 6,088 3,811
------------ ------------
Dividend (1,421) (1,081)
------------ ------------
Retained profit for the year 2 4,667 2,730
======= =======
Basic earnings per ordinary share 4 2.79p 1.93p
Diluted earnings per ordinary share 4 2.67p 1.84p
Earnings per ordinary share before exceptional 4
items and amortisation of goodwill 4.11p 2.46p
======= =======
There are no recognised gains or losses or movements on shareholders' funds
other than the results for the year and prior year and the issue of shares.
There is no material difference between the result as disclosed in the Group
profit and loss account and the result on an historical cost basis.
CONSOLIDATED BALANCE SHEET
Year ended 31 December 2001
Note 2001 2000
£000 as restated
£000
Fixed Assets
Intangible assets 14,606 587
Tangible assets 9,663 9,000
---------- ----------
24,269 9,587
---------- ----------
Current Assets
Stock 11,164 17,985
Debtors: amounts falling due within one year 34,436 28,977
Debtors: amounts falling due after more than one year 4,618 2,066
Cash at bank and in hand 31,650 20,750
---------- ----------
81,868 69,778
Creditors: amounts falling due within one year (74,763) (52,069)
---------- ----------
Net Current Assets 7,105 17,709
---------- ----------
Total Assets Less Current Liabilities 31,374 27,296
Creditors: amounts falling due after more than one year (2,184) (2,618)
Provision for Liabilities and Charges (957) (1,128)
---------- ----------
Net Assets 28,233 23,550
===== =====
Capital and Reserves
Called up share capital 2 546 544
Share premium account 2 17,622 17,608
Profit and loss account 2 10,065 5,398
---------- ----------
Total Equity Shareholders' Funds 28,233 23,550
===== =====
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2001
2001 2000
Note £000 £000 £000 £000
Net cash inflow from operating activities 5 35,513 5,183
Returns on investments and servicing of finance
Interest received 1,102 1,110
Interest paid (132) (176)
Interest element of finance lease rental payments (82) (84)
--------- ---------
Net cash inflow from returns on 888 850
investments and servicing of finance
Taxation
Corporation tax paid (3,134) (2,058)
--------- ---------
Tax paid (3,134) (2,058)
Capital expenditure
Payments to acquire tangible fixed assets (2,769) (4,102)
Receipts from sales of tangible fixed assets 44 49
--------- ---------
Net cash outflow from capital expenditure (2,725) (4,053)
Acquisitions and disposals
Purchase of subsidiary undertaking - (527)
Purchase of business undertakings (17,842) -
Equity dividends paid (1,156) (1,016)
---------- ---------
Net cash inflow/(outflow) before financing 11,544 (1,621)
Financing
Issues of shares 16 17,642
New loans - 1,050
Repayment of loans (131) (631)
Capital element of finance lease rentals (529) (445)
--------- ---------
Net cash (outflow)/ inflow from financing (644) 17,616
---------- ---------
Increase in cash 6 10,900 15,995
====== ======
NOTES TO THE ACCOUNTS
Year ended 31 December 2001
1. Segmental Analysis
2000
2001 as restated
£000 £000
Turnover
Corporate services:
Continuing operations 51,122 36,312
Acquisitions 36,584 -
Retail services 242,159 220,351
---------- ----------
329,865 256,663
====== ======
Profit before tax
Corporate services operating profit:
Continuing operations 4,713 2,431
Acquisitions 4,550 -
Retail services operating profit 2,571 3,900
---------- ----------
Operating profit before exceptional items and amortisation of goodwill 11,834 6,331
Amortisation of goodwill (2,923) (65)
---------- ----------
Operating profit before exceptional items 8,911 6,266
Exceptional items 78 (1,296)
Net interest receivable 888 881
---------- ----------
Group profit before tax 9,877 5,851
====== ======
Net Assets
Corporate services 5,828 2,831
Retail services 5,324 3,029
Group 17,081 17,690
---------- ----------
Group net assets 28,233 23,550
====== ======
All turnover and profits originate from activities within the United Kingdom.
Included within the consolidated profit and loss account are the following
amounts relating to acquisitions, cost of sales £25,851,000 and administrative
costs £8,737,000.
2. Statement of Movement on Reserves
Profit
Share Share and loss
capital Premium account Total
£000 £000 £000 £000
GROUP
Balance at 1 January 2001 as restated 544 17,608 5,398 23,550
Profit for the year - - 4,667 4,667
Issue of shares 2 23 - 25
Issue costs - (9) - (9)
------- ------ ------ ------
Balance at 31 December 2001 546 17,622 10,065 28,233
====== ====== ====== ======
3. Exceptional Items
2001 2000
£000 £000
Flotation related costs - 222
National Insurance Contributions on unapproved share options (78) 1,074
----- -----
(78) 1,296
===== =====
The company has provided for the National Insurance Contribution liability
arising on certain unapproved share options outstanding at 31 December 2001.
The liability has been calculated based on the closing mid-market price at 31
December 2001 of 78p (2000 : 82.5p).
4. Earnings Per Share
a. Basic earnings per share is calculated by dividing profits
after tax of £6,088,000 (2000 : £3,811,000) by the weighted average number of
ordinary shares in issue during the period. The weighted average number of
shares in issue was 217,836,713 (2000 - 197,061,422).
b. 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. Dilutive potential
Ordinary Shares comprise the difference between the number of shares subject to
share options and the number of shares that would have been issued at estimated
average fair values in each period. The resulting adjusted average number of
shares was 228,160,377 (2000 - 207,437,769).
c. Earnings before amortisation of goodwill and exceptional costs
are presented in addition to the basic earnings per share calculated in
accordance with FRS 3 and FRS 14 since, in the opinion of the Directors, this
presents a better like-for-like comparison of the earnings of the Group between
the relevant periods.
d. Basic earnings per share may be reconciled to earnings per share
before amortisation of goodwill and exceptional costs as follows:
2001 2000
as restated
p p
Earnings per share before amortisation of goodwill and exceptional costs 4.11 2.46
Amortisation of goodwill (1.34) (0.03)
Exceptional costs 0.03 (0.66)
Tax related to exceptional costs (0.01) 0.16
----- -----
Basic earnings per share -FRS 3 basis 2.79 1.93
==== ====
5. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities
2001 2000
£000 £000
Operating profit 8,989 4,970
Goodwill written off 2,923 65
Depreciation of tangible fixed assets 2,374 1,554
Loss on the sale of fixed assets 317 28
Decrease/ (increase) in stock 6,821 (11,238)
Increase in debtors (6,607) (9,636)
Increase in creditors 20,813 18,366
(Decrease)/ increase in provisions (117) 1,074
-------- ---------
Net cash inflow from operating activities 35,513 5,183
===== =====
The decrease in provisions of £117,000 represents the exceptional item of
£78,000 credited in the year and £39,000 utilised during the period relating to
National Insurance Contributions on unapproved share options (see note 3).
6. Analysis of Net Funds
At Other At
1 January Cash non-cash 31 December
2001 flow changes 2001
£000 £000 £000 £000
Cash at bank and in hand 20,750 10,900 - 31,650
Hire purchase (914) 529 (366) (751)
Debt due within one year:
Loans (96) 131 (259) (224)
Debt due after one year:
Loan (2,142) - 259 (1,883)
------ ------ ----- -----
17,598 11,560 (366) 28,792
====== ====== ====== ======
7. Accounting Policies
The financial statements have been prepared in accordance with applicable United
Kingdom accounting standards.
Of the new accounting standards, three have been implemented for the first time
this year, FRS 17 - Retirement Benefits, FRS 18 - Accounting Policies and FRS 19
- Accounting for Deferred Tax.
The Group has no defined benefit pension schemes therefore the transitional
arrangements of FRS 17 have no impact on the financial statements.
The directors have reviewed the accounting policies of the Group in accordance
with FRS 18 and consider these to be appropriate.
FRS 19 has been fully implemented in these financial statements which has
resulted in a prior year adjustment. As a result the comparative figures have
been restated as follows:
Group Provision for Profit and loss
liabilities and account reserve
charges
2000 as previously reported 1,153 5,373
Adoption of FRS 19 (25) 25
----- -----
2000 restated 1,128 5,398
===== =====
In addition the comparative figure for tax on profit on ordinary activities for
2000 has been restated from the previously reported amount of £2,065,000 to
£2,040.000. The impact on the 2001 results is a reduction in the tax charge of
£478,000.
8. Annual Report and Accounts
The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow Statement
are abridged from the Company's Statutory Accounts, which will be reported on by
the auditors and delivered to the Registrar of Companies in due course. Copies
of the report of the Directors and the audited financial statements for the year
ended 31st December 2001 will be posted to shareholders on 12th March 2002 and
may be obtained thereafter from the company's registered office at Brunel Park,
Brunel Drive, Newark, Nottinghamshire, NG24 2EG (Tel: 01636 602500). The results
for the year ended 31st December 2000 are taken from the Group's financial
statements which carry an unqualified auditors report, did not contain a
statement under S.237(2) or (3) of Companies Act 1985 and which have been filed
with the Registrar of Companies.
-ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
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