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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Sirvis | LSE:SRV | London | Ordinary Share | GB00B23PRH18 | ORD 40P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 160.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number : 5681A SiRViS IT PLC 04 August 2008 SiRViS IT plc Preliminary Results for the year ended 31 May 2008 SiRViS IT plc, which provides a range of IT services and sale of computer equipment across the United Kingdom, announces preliminary results for the year to 31 May 2008. Basis of reporting The preliminary results have been prepared in accordance with applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) for the first time; comparatives have been restated. HIGHLIGHTS * Revenue growth increased by 44% to £10.8m (2007: £7.5m); * Recurring revenues represents 76% of revenue (2007: 79%); * Adjusted operating profit* increased by 30% to £1,288,000 (2007: £992,000); * Adjusted basic earnings* per share increased by 18% to 28.36p (2007: 24.02p); * Profit after tax £642,000 (2007: £43,000 loss); * Basic earnings per share 19.45p (2007: 1.50p loss); * A recommended cash offer of 160 pence per share for the entire issued ordinary share capital of the Company from SiRViS IT Holdings Limited, a private company wholly owned by the NAV Fund, a fund to which North Atlantic Value LLP acts as investment adviser, is to be announced this morning via a separate announcement. * Adjusted operating profit and adjusted basic earnings per share are stated before exceptional items, share-based payments and amortisation of intangible assets. Enquiries to: Mark Lewis 01773 825516 SiRViS IT plc Chief Executive Ian Bailey 01773 825516 SiRViS IT plc Finance Director Geoff Nash 0207 600 1658 FinnCap Nominated Adviser Chairman's Statement I am pleased to report the results for the year ended 31 May 2008 which show a strong financial performance compared to last year. The acquisition of Technology Management Group Limited ("TMG") which was acquired in May 2007 brought many synergies to the Group and has been successfully integrated with our Group operations. A full twelve months of trading by the enlarged Group is included in the figures for the year ended 31 May 2008. International Financial Reporting Standards (IFRS) These annual results are the first that the Group has reported based on International Financial Reporting Standards (IFRS) as adopted by the EU and, consequently, the comparative figures in respect of last year have been restated from UK GAAP to IFRS. The principal area of impact arising from IFRS has been the treatment of goodwill and intangible assets. The effect of IFRS on the reporting of our cash flows remains unaffected. Trading results Revenue for the year increased by 44% to £10.8m (2007: £7.5m), with recurring revenues representing 76% of revenue (2007: 79%). Operating profit, before exceptional items, share-based payments and amortisation of intangible assets, increased by 30% to £1,288,000 (2007: £992,000). Adjusted basic earnings per share (before exceptional items, share-based payments and amortisation of intangible assets) increased by 18% to 28.36p per share (2007: 24.02p). Profit after tax was £642,000 (IFRS presented 2007: £43,000 loss), resulting in a basic earnings per share of 19.45p (2007: 1.50p loss). Operating cash flow, before movements in working capital, was £1,344,000 compared to £93,000 last year. Gross margin as a percentage of revenue has decreased from 36.4% to 32.7%, partly due to the contracts acquired from TMG being lower margin contracts and general pricing pressure in a very competitive marketplace. Business review The Group acquired TMG during the latter part of the previous financial year. Quarter one of the financial year under review concentrated on integrating TMG with the Group's operations. The cost saving benefits associated with this integration became effective in August 2007, and I am pleased to report that the major customers of TMG have been very satisfied with the IT services provided. In the second half of the year the Board has continued to focus on organic growth and cost control. The Board has looked at other acquisition opportunities during the year, however, within a weakening economic and financial marketplace the Board has taken the view that it would not overpay for acquisitions at a time when liquidity was declining. Recommended Cash Offer Today, the Board also announces a recommended cash offer of 160 pence per share for the entire issued ordinary share capital of the Company from SiRViS IT Holdings Limited, a private company wholly owned by the NAV Fund, a fund to which North Atlantic Value LLP acts as investment advisor. The Board believes that the Offer represents a fair and reasonable value for the business which has struggled to generate enough scale as a public company. The present valuation of the Group makes further acquisitions disproportionally dilutive and the current credit conditions make raising debt both difficult and expensive. Accordingly the Board is not able to make any further acquisitions in the current climate and the Group continues to bear the significant cost of being a public company. As a result of these factors, the Independent Directors of the Board have concluded that the Group would be better placed to achieve the opportunities available to it in an off-market environment and hence consider that the Offer represents a good opportunity for SiRViS IT plc shareholders to realise a fair and reasonable value for their shares. Share Consolidation Following the approval of all the resolutions at the Annual General Meeting in September 2007, the shares were consolidated on a forty to one basis. Dividends The Board does not propose a dividend and will be unable to declare one until such time as the accumulated deficit on the Company's profit and loss account has been eliminated. When appropriate, proposals will be put to shareholders to approve the utilisation of the share premium account to enable a dividend to be declared. Employees The Board recognises the importance of the Group's staff and management to the success of the Group and would like to thank all employees for their commitment, expertise and considerable contribution during the year. Outlook Whilst current trading remains satisfactory, since the end of the financial year the Group has noticed some scaling back by retail focused clients and increased pressure on margins. The Board currently anticipates that the weakening economy may well have an impact on the future rate of growth. Peter Addison Non-executive Chairman Consolidated Income Statement for the year ended 31 May 2008 Year ended Year ended 31 May 31 May 2008 2007 Note £'000 £'000 Revenue 10,812 7,493 Cost of sales (7,272) (4,764) Gross profit 3,540 2,729 Administrative expenses before exceptional items, share-based payments, and amortisation of (2,252) (1,737) intangible assets Operating profit before exceptional items, share-based payments, and amortisation of intangible 1,288 992 assets Exceptional items - (946) Share-based payment costs - (58) Amortisation of intangible assets (276) - Total administrative expenses (2,528) (2,741) Operating profit/(loss) 1,012 (12) Finance income 5 1 Finance costs (81) (28) Profit/(loss) before taxation 936 (39) Income tax expense (294) (4) Profit/(loss) for the year 642 (43) Earnings/(loss) per ordinary share 2 Basic 19.45p (1.50p) Diluted 19.45p (1.50p) All results for the group are derived from continuing operations in both the current and prior year. There is no recognised income or expenses for the current or prior period other than stated above. As a consequence, a statement of recognised income and expenses has not been presented. Consolidated Balance Sheet at 31 May 2008 2008 2007 Note £'000 £'000 £'000 £'000 ASSETS Non-current assets Property, plant & equipment 114 128 Goodwill 8,978 8,626 Other intangible assets 432 708 Total non-current assets 9,524 9,462 Current assets Trade and other receivables 3 2,216 2,376 Inventories 4 588 696 Cash and cash equivalents 1,118 716 Total current assets 3,922 3,788 Total assets 13,446 13,250 LIABILITIES Current liabilities Trade and other payables 5 (2,252) (2,803) Current borrowings 6a (1,208) (1,002) Current tax payable (290) (16) Current provisions 7 (991) (862) Deferred income (1,951) (1,876) Total current liabilities (6,692) (6,559) Non-current liabilities Non-current borrowings 6b (84) (188) Non-current provisions 8 - (475) Total non-current liabilities (84) (663) Total liabilities (6,776) (7,222) Net assets 6,670 6,028 EQUITY Share capital 1,320 1,320 Share premium account 6,145 6,145 Retained earnings (795) (1,437) Total equity 6,670 6,028 Consolidated Cash Flow Statement for the year ended 31 May 2008 2008 2008 2007 2007 £'000 £'000 £'000 £'000 Cash flows from operating activities Profit/(loss) after taxation for the period 642 (43) Adjustments for: Finance income (5) (1) Finance costs 81 28 Taxation expense recognised in income statement 294 4 Depreciation of property, plant and equipment 56 47 Amortisation of intangible assets 276 - Share-based payment expense - 58 702 136 Operating cash flows before movements in working capital 1,344 93 Decrease/(increase) in trade and other receivables 160 (441) Decrease in inventories 108 39 (Decrease)/increase in trade payables (273) 321 Decrease in accruals (90) (140) Increase/(decrease) in deferred income 75 (187) (Decrease)/increase in provisions (610) 862 (630) 454 Cash generated from operations 714 547 Interest paid (76) (28) Taxation paid (18) (55) Net cash generated from operating activities 620 464 Cash flows from investing activities Cash at bank acquired with subsidiary - 521 Purchase of subsidiary undertaking, net of cash acquired (88) (925) Purchase of property, plant and equipment (42) (55) Deferred consideration paid (195) (360) Interest received 5 1 Net cash used in investing activities (320) (818) Cash flows from financing activities Net proceeds of ordinary share issue - 515 Payment of loan notes (360) - Net cash (used in)/generated from financing activities (360) 515 Net (decrease)/increase in cash and cash equivalents (60) 161 Cash and cash equivalents at 1 June 74 (87) Cash and cash equivalents at 31 May 14 74 Anaylised in balance sheet as: Cash at bank and in hand 1,118 716 Bank overdraft (687) (642) Bank borrowings (417) - Cash and cash equivalents at 31 May 14 74 Consolidated Statement of Changes in Equity at 31 May 2008 Share Share premium Retained capital account earnings Total £'000 £'000 £'000 £'000 At 1 June 2006 1,141 5,809 (1,452) 5,498 Loss for the year and total recognised expenses for the year - - (43) (43) Other movements Proceeds from issue of shares 179 336 - 515 Equity settled share-based payment charge - - 58 58 At 31 May 2007 1,320 6,145 (1,437) 6,028 Profit for the year and total recognised expenses for the year - - 642 642 At 31 May 2008 1,320 6,145 (795) 6,670 Notes to the consolidated financial statements 1. Principal Accounting policies Basis of preparation The consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards (IFRS) in issue as adopted by the European Union (EU) and the Alternative Investment Market (AIM) Rules for Companies. The policies have changed from the previous year when the financial statements were prepared under United Kingdom Generally Accepted Accounting Practice (UK GAAP). The comparative information has been restated in accordance with IFRS, as disclosed in the Interim results announcement. 2 Earnings/(loss) per ordinary share The calculation of earnings/(loss) per share is based on the profit/(loss) for the financial year and the following number of shares: 2008 2007 Number of Number of shares shares Weighted average number of shares For basic earnings/(loss) per share 3,300,000 2,870,081 For diluted earnings/(loss) per share 3,300,000 2,870,081 Share options do not have a dilutive effect because the exercise prices were above the average share price during the period. In view of the significant impact of the adoption of IFRS 2 Share Based Payments, amortisation of intangibles and exceptional items on earnings per share calculated in accordance with IAS 33 Earnings Per Share, an adjusted earnings/(loss) per share has been provided below as the Directors consider that they may be useful to shareholders and potential investors. 2008 2007 Per share Per share amount Basic (Loss)/ amount Basic Earnings and diluted Earnings and diluted £'000 p £'000 p Profit/(loss) for the period 642 19.45 (43) (1.50) Effect of share based payments - - 58 2.02 Previous years tax charge adjustment 18 0.55 4 0.14 Amortisation of intangibles 276 8.36 - - Adjusted earnings pre-exceptional items per share 936 28.36 19 0.66 Exceptional items (net of tax where applicable): Aborted acquisition costs - - 29 1.01 Unsolicited approach costs - - 41 1.41 Restructuring provision - - 346 12.04 Onerous lease provision - - 256 8.90 Adjusted earnings per share 936 28.36 691 24.02 3 Trade and other receivables 2008 2007 £'000 £'000 Trade receivables 1,656 1,751 Prepayments and accrued income 560 625 2,216 2,376 The carrying value of trade receivables is considered a reasonable approximation of their fair value. All of the receivables have been reviewed for indicators of impairment and no provision has been made (2007: Nil). The trade receivables past due but not impaired are as follows: 2008 2007 £'000 £'000 Not more than 3 months 490 229 More than 3 months but not more than 6 months 75 28 565 257 4 Inventories 2008 2007 £'000 £'000 Finished goods and goods for resale 59 45 Maintenance stocks 529 651 588 696 Inventories are stated at fair value less cost to sell. During the year, a total of £1,452,000 of inventories was included in the income statement as an expense (2007: £740,000). The amount of write down of inventories recognised as an expense amounts to £410,000 (2007: £303,000). 5 Trade and other payables 2008 2007 £'000 £'000 Trade payables 655 942 Accrued expenses 1,029 1,112 Deferred consideration - 195 Other taxation and social security 568 554 2,252 2,803 The carrying value of trade payables is considered a reasonable approximation of their fair value. 6 Borrowings 6a Current borrowings 2008 2007 £'000 £'000 Loan notes 188 360 Bank overdraft 687 642 Bank borrowings 333 - 1,208 1,002 The current borrowings carry interest based on Barclays Bank PLC base lending rate and hence are considered to be carried at fair value. 6b Non-current borrowings 2008 2007 £'000 £'000 Loan notes - 188 Bank borrowings 84 - 84 188 The non-current borrowings carry interest based on Barclays Bank PLC base lending rate and hence are considered to be carried at fair value. 7 Current provisions Onerous Contingent Restructuring lease consideration Total £'000 £'000 £'000 £'000 At 1 June 2007 477 385 - 862 Additional provisions - - 264 264 Transfer from non-current provisions - - 475 475 Used during the year (449) (161) - (610) 28 224 739 991 At 31 May 2008 a. Restructuring provision represents redundancy costs and other expenses in relation to integrating the acquisition of Technology Management Group Limited into Group operations. b. Onerous lease provision represents the integration of two locations and relates to the closure of the Technology Management Group Limited premises. c. Contingent consideration represents the estimated additional consideration to be paid relating to the acquisition of Technology Management Group Limited. 8 Non-current provisions Contingent consideration Total £'000 £'000 At 1 June 2007 475 475 Transfer to current provisions (475) (475) - - At 31 May 2008 Contingent consideration represents the estimated additional consideration to be paid relating to the acquisition of Technology Management Group Limited. 9 The financial information set out in this Preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. Results for the year ended 31 May 2008 are abridged from the 2008 Annual Report and Accounts, which received an unqualified auditor's report and will be filed with the Registrar of Companies. 10 The Annual Report will be posted to shareholders in due course. This information is provided by RNS The company news service from the London Stock Exchange END FR BBGDILGGGGIS
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