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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Triplearc | LSE:TPA | London | Ordinary Share | GB0031067340 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.92 | 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:7595W
TripleArc PLC
22 March 2004
Embargoed until 0700 22 March 2004
TripleArc Plc
Preliminary Results for the Year Ended 31 December 2003
Preliminary results from TripleArc Plc, the UK based provider of technology led
print procurement solutions.
HIGHLIGHTS
Year ended Year ended
31 December 31 December
2003 2002
Turnover #20.9m #7.0m
Gross profit #3.4m #0.9m
Earnings before interest, tax and
amortisation * #0.9m loss (#2.1m)
Profit before tax ** #0.8m loss (#3.0m)
Earnings per share ** 0.71p loss per share(3.11p)
Cash generation #1.6m outflow (#1.8m)
* before exceptional costs
**before exceptional costs and non cash items
* Significant strategic purchase of Access Plus Plc in November 2003
* Full year contribution from ControlP, acquired in September 2002
* Organic revenue growth of 119%
* First full year operating profit before exceptional costs, amortisation
of intangible assets and share option compensation expense; #3.0m
improvement over 2002
* First full year net cash inflow from operations; #3.4m improvement over
2002
* 2004 has started with strong levels of new business
Commenting on the results, Jason Cromack, Chief Executive Officer stated:
"I am delighted to report a year of significant progress in TripleArc's short
history with turnover and operating profit having increased dramatically.
"The highlight for the Group was undoubtedly the acquisition of Access Plus in
November. This has led to the Group becoming one of the largest print management
companies in the UK and puts us in a position to win some substantial contracts
which, prior to the acquisition, would not have been possible.
"The Group has started the new year positively and we expect to see further
growth in 2004 and to make progress accordingly."
For further information please contact:
TripleArcPlc 020 7258 6290
Jason Cromack, Chief Executive Officer
Weber Shandwick Fleet Financial 020 7067 0700
Terry Garrett/ Nick Dibden
TripleArc Plc
Preliminary Results ended 31 December 2003
The Board of TripleArc Plc, the UK based provider of technology driven print
management and procurement solutions, announces its preliminary results for the
year ended 31 December 2003.
Financial Review
Revenue for the year was #20.9m (2002 - #7.0m), reflecting the Group's continued
progress from a development oriented Company to a services driven business with
an expanding revenue stream from print management. The increase in revenue and
gross profit was attributable to the continued growth of gl2, the print
management operation, and a 6 week contribution from Access Plus, the print
management specialist acquired in November 2003. The Group's operations
experienced organic growth in sales of 119% to #15.4m (2002 - #7.0m). Access
Plus contributed #5.5m of sales in the final weeks of the year. On a proforma
annualised basis, the enlarged Group's combined revenues were almost #48m during
2003.
The consolidated gross profit was #3.4m for 2003, a 275% increase on the #0.9m
generated in 2002. This significant growth was achieved by the Group's print
management operations. On a proforma annualised basis, the enlarged Group's
combined gross profit was #11.3m for 2003.
Research and development costs were significantly reduced to #79,000 (2002 -
#0.7m), following the effective completion of the Group's Collaborative Workflow
System ("CWS") technology at the end of 2002. With the acquisition of Access
Plus, there will be some further costs to integrate the CWS system into the new
business. The Group will continue to outsource software development to third
parties enabling it to manage its software enhancement costs in line with
operational requirements. Other overhead costs were reduced, with lower selling
and distribution costs, as the Group was able to focus on developing its newly
won clients.
There were exceptional costs of #0.2m relating to the acquisition of Access
Plus. Amortisation of intangible assets was #0.6m during 2003 (2002 - #0.3m),
reflecting a full year's charge on the intellectual property capitalised on the
acquisition of the software business of ControlP and a 6 week charge relating to
the acquisition of Access Plus. The non-cash share option compensation expense
of #0.1m was, as expected, substantially reduced from the 2002 charge of #0.7m.
This arose on share options granted prior to TripleArc's listing on AIM where
the exercise price of the option was below the prevailing market price at the
date of grant. This item will continue to decline significantly in 2004.
The Group recorded its first operating profit of #0.9m in 2003, before allowing
for exceptional costs, amortisation and share option compensation, compared to
an operating loss of #2.1m on the same basis, in 2002. The loss before tax in
2003 was #35,000 (2002 - loss #3.0m). On a proforma annualised basis, the
enlarged Group generated combined earnings before interest, tax, amortisation
and exceptional costs ('EBITA') of #4.3m in 2003.
The basic loss per ordinary share was 0.29 pence (2002 - loss per share of
4.58p). After allowing for the exceptional costs, the amortisation of intangible
assets and the non-cashshare option compensation expense, the Group had
adjusted earnings per share of 0.71 pence, (2002 - adjusted loss per share
3.11p)
Cash generation has also been a significant feature of 2003, with the Group
recording its first net cash inflow from operating activities of #1.6m. This is
a #3.4m improvement over the same figure for 2002. On a proforma annualised
basis, the enlarged Group produced combined operating cash inflows of #5.6m in
2003. It is anticipated that cash generation will be an important characteristic
of the Group's operating profile over the coming years.
Operational Review
Overview
Print management is one of the most exciting and the fastest growing sector of
the print industry. This sector is estimated to currently be worth some #1.2bn,
approximately 10% of the UK print market, and is estimated to be growing at some
15% per annum.
The acquisition of Access Plus in November 2003 has increased the Group's range
of services, experience and expertise in the print management sector, as well as
providing a good geographical and logistical network. The Group is now placed in
the top five print management companies in the UK. TripleArc will be able to
roll out its sophisticated technology solutions across the enlarged print
management operation to enhance the service offering to our customers and
streamline the way we do business internally, with our clients and with our
suppliers.
A challenging business environment is pushing companies to adoptbest practices
in procurement, including a willingness to outsource 'back-office' functions,
which is helping to fuel the growth of the print management sector. With an
increasing number of print management contracts becoming available and the size
of contracts increasing, the Group's enlarged scale makes it well positioned to
capitalise on the opportunities in this growing market.
Technology adoption is continuing to gain momentum throughout the print and
graphic arts industry and again theGroup is well placed to capitalise on the
opportunities becoming available as the industry adopts Job Definition Format ("
JDF"), the new print industry job ticket standard which remains at the core of
our technologies.
Print Management Services
The Group provides print management services directly to print buying customers
across a diversity of industries that includes the retail, financial services,
leisure, public and publishing sectors. We save our customers time and expense
by utilising our expertise in project management, new digital and workflow
technologies, purchasing print and managing suppliers: allowing customers to
outsource some, or all, of the complex process of buying print.
Prior to the acquisition of Access Plusplc in November 2003, the print
management division, gl2, had shown dramatic growth of over 100%. Our research
into the requirements of corporates moving to outsource their print function
demonstrated that there were key requirements necessary to participate - scale,
technology, geographical spread and a strong service model. The acquisition
ensured that the Group could capitalise on the increasing number of print
management contract opportunities available, by enhancing the Group's ability to
meet all those requirements.
The division offers an effective outsourced print buying solution by taking
advantage of the Group's proprietary Collaborative Workflow System. The
efficiencies of using CWS have been demonstrated and the technology has helped
the Group win a number of key new customers. This technology was firmly
implemented within gl2 prior to the acquisition and is being rolled out and
bedded down in stages across Access Plus.
Following the combination of Access Plus and gl2, we are able to offer one of
the most 'rounded' print management solutions in the UK, servicing a corporate's
total outsourced printing requirement. This current financial year has already
seen the announcement of a contract win with Matalan, expected to provide
revenues of over #5m in 2004.
Technology Division
The technology division both markets and supports the Group's proprietary
solutions, edit2print and iPMS, and provides internal support to the print
management division giving a strong competitive advantage to the division.
CWS has dramatically enhanced internal processes and reduced process costs and
times within gl2. This has led to improved service levels being achieved with
clients, as our staff are able to focus on the services they provide to clients,
ultimately leading to increased revenue opportunities. As the technology is
rolled out across the enlarged print management division we expect these
improvements to continue, thereby unlocking the massive potentialwhich exists
within Access Plus's existing customer base.
Technology is recognised as playing a pivotal role in allowing organisations to
manage and reduce printing costs. TripleArc's JDF compliant technology remains
at the core of our offering and the Group is benefiting from the increasing
adoption of JDF within the print industry. In the run up to the DRUPA trade fair
in May, the world's largest print exhibition, there is an increasing focus on
JDF that reinforces the positive outlook forTripleArc's technology products.
These products place TripleArc at the leading edge of print procurement
technology. We are delighted to confirm our business partner status with
Hewlett-Packard's Print and Imaging Division, and we will be attending DRUPA in
conjunction with HP, promoting the edit2print and iPMS solutions integrated into
ProductionFlow (the workflow solution for HP's digital printing devices). Our
association with HP demonstrates the attractiveness of our solutions to HP
customers, and will allow us to showcase our software solutions on a worldwide
stage.
This current financial year has already seen the announcement of an agreement
with Four51, Inc, to distribute CWS in the US market, a vast market for print.
Again, this demonstrates the robustness and attractiveness of the Group's
technology and marks a major achievement of one of our milestones of licensing
our technology in new territories. This agreement will see immediate revenues
being generated for the Group.
Staff
We would like to thank all members of both TripleArc and Access Plus for their
loyalty and level of professionalism over the past months. They have not only
been supportive of the merger but have embraced it, realising the synergies and
contribution that can be made from the enlarged Group. The Board would like to
thank the team for their hard work and looks forward to achieving further growth
together over the years ahead.
Outlook
TripleArc has experienced an excellent start to 2004. The key features being the
critical mass that the Group now has and the implementation of its technology.
The combination of these two factors will enable the Group to tender for further
large contracts such as announced earlier this year with Matalan Plc, which
covers an extensive range of Matalan's catalogue and direct mailing requirements
for the UK market. Furthermore, we have now put in place strategic partnerships
with Hewlett-Packard and Four51 that demonstrate the strengthof our offering.
The Board remains confident of delivering further growth in the year ahead as we
complete the roll out of the Group's technology across the print management
division. We will look to focus on our cash generation to rapidly pay down our
borrowing and focus on new strategic partnerships and potential acquisitions
that will enhance our service offering to our clients, whilst delivering revenue
for the Group. There are significant opportunities in both Europe and the US and
we remain committed to being at the leading edge within the industry. The Board
is positive that we will deliver shareholder value over the forthcoming year and
well into the future.
Group profit and loss account
for the year ended 31 December 2003
Notes
2003 2002
#000 #000
-------- --------
Revenue
- continuing operations 15,370 7,010
- acquisitions 5,490 -
-------- --------
20,860 7,010
Cost of sales (17,434) (6,098)
-------- --------
Gross profit 3,426 912
Selling and distribution costs (537) (659)
Research and development (79) (719)
Administration expenses (1,888) (1,592)
Exceptional recruitment and integration costs (184) -
-------- --------
Profit/(loss) before amortisation of intangible
assets and share option compensation expense 738 (2,058)
Amortisation of intangible assets (563) (281)
Non cash share option compensation expense (99) (673)
-------- --------
Operating profit/(loss)
- continuing operations (551) (3,012)
- acquisitions 627 -
-------- --------
Profit/(loss) on ordinary activities before interest
and taxation 76 (3,012)
Interest receivable 13 45
Interest payable and similar charges (124) (12)
-------- --------
Loss on ordinary activities before taxation (35) (2,979)
Taxation on loss on ordinary activities (196) (10)
-------- --------
Loss for the financial year (231) (2,989)
======== ========
Basic loss per ordinary share
- basic and diluted (pence) 2 (0.29p) (4.58p)
======== ========
Adjusted earnings per share before allowing for exceptional costs and #0.563m
(2002 - #0.281m) for goodwill amortisation, and #0.099m (2002 - #0.673m) for
share option compensation expense
Earnings/(loss) per ordinary share (pence) 2 0.71p (3.11p)
Diluted earnings/(loss) per ordinary share 0.71p (3.11p)
======== ========
The Group had no recognised gains or losses in the financial year or preceding
financial year other than those dealt with in the profit and loss account.
Group balance sheet
at 31 December 2003
2003 2002
#000 #000
--------- --------
Fixed assets
Intangible assets 37,692 3,790
Tangible assets 1,755 157
--------- --------
39,447 3,947
--------- --------
Current assets
Stocks 1,223 44
Debtors 11,136 1,873
Cash at bank and in hand 2,188 740
--------- --------
14,547 2,657
Creditors: amounts falling due within one year (12,921) (2,798)
--------- --------
Net current assets / (liabilities) 1,626 (141)
--------- --------
Total assets less current assets 41,073 3,806
Creditors: amounts falling due after more than one year (16,612) (111)
Provision for liabilities and charges: deferred taxation (68) -
--------- --------
Net assets 24,393 3,695
--------- --------
Capital and reserves
Called up share capital 10,050 3,275
Share premium account 19,533 5,478
Share option reserve 1,023 924
Merger reserve (621) (621)
Group interest in shares of TripleArc Plc (150) (150)
Profit and loss account (5,442) (5,211)
--------- --------
Shareholders' funds - equity 6 24,393 3,695
========= ========
Group cash flow statement
for the year ended 31 December 2003
Notes 2003 2002
#000 #000
--------- ---------
Net cash inflow/(outflow) from operating
activities 3 1,621 (1,759)
Returns on investments and servicing of finance
Interest received 13 45
Interest paid (124) (13)
--------- ---------
Net cash (outflow)/inflow from returns on
investments and servicing of finance (111) 32
Corporation tax paid (43) (12)
Capital expenditure and financial investment
Purchase of tangible fixed assets (8) (94)
Disposal of tangible fixed assets - 12
---------- ---------
Net cash outflow for capital expenditure (8) (82)
Acquisitions and disposals
Acquisition of subsidiary undertaking (27,943) (138)
Payments in connection with acquisition (1,177) -
Cash acquired on acquisition 673 -
Overdraft acquired with subsidiary undertaking (1,512) -
---------- ---------
Net cash outflow for acquisitions and disposals (29,959) (138)
Net cash outflow before use of liquid resources
and financing (28,500) (1,959)
Financing
Proceeds from issue of share capital 11,200 -
Expenses paid in connection with share issue (850) (104)
New long-term bank loans 5 18,450 -
Debentures repaid - (50)
Capital element of finance lease payments (15) (8)
---------- ---------
Net cash inflow/(outflow) from financing 28,785 (162)
---------- ---------
Increase/(decrease) in cash 4,5 285 (2,121)
========== =========
Reconciliation of net cash movements to net funds
Increase/(decrease) in cash in the year 285(2,121)
Decrease in debt - 50
---------- ---------
Increase/(decrease) in net funds resulting from
cashflows 285 (2,071)
Increase in new loans arising to fund
acquisition (18,450) -
---------- ---------
Movement in net debt in the year (18,165) (2,071)
Net funds at 1 January 680 2,751
---------- ---------
Net(debt)/funds at 31 December (17,485) 680
========== =========
Note 1: Basis of consolidation
The consolidated financial statements include the financial statements of
TripleArc Plc and its subsidiary undertakings prepared up to 31 December 2003.
Inter-company profits, transactions and account balances have been eliminated.
The acquisition method of accounting is applied for acquisitions with fair
values being attributed to the identifiable net assets acquired. The results of
subsidiary undertakings acquired during the year are included in the
consolidated profit and loss account from the date of acquisition.
Note 2: Loss per ordinary share
(a) 2003 2002
------------ ------------
Basic loss per share
Loss attributable to ordinary shareholders (#000) (231) (2,989)
============ ============
Basic weighted average number of shares 79,017,127 65,273,191
============ ============
Basic loss per share (pence) (0.29p) (4.58p)
============ ============
Basic loss per share has been calculated by dividing the loss for each financial
year by the weighted average number of ordinary shares in issue in each year.
There is no difference for 2003 and 2002 between the basic net loss per share
and the diluted net loss per share as the effect of all share options is
anti-dilutive.
(b) 2003 2002
------------ ------------
Adjusted earnings/(loss) per share
Profit/(loss) attributable to ordinary shareholders
(#000) 559 (2,035)
============ ============
Basic weighted average number of shares 79,017,127 65,273,191
Dilutive potential ordinary shares from share
options 142,395 -
============ ============
79,159,521 65,273,191
============ ============
Adjusted earnings/(loss) per share (pence) 0.71p (3.11p)
============ ============
Losses on ordinary activities after taxation of #0.2m (2002 - #3.0m) are shown
after deducting #0.2m (2002 - NIL) in respect of exceptional recruitment and
integration costs, #0.6m (2002 - #0.3m) in respect of goodwill amortisation, and
#0.1m (2002 - #0.7m) in respect of share option compensation expense. Adjusted
earnings per share have been calculated by dividing the adjusted profit of #0.6m
(after allowing for the potential tax credit on exceptional costs), (2002 - loss
#2.0m) by the weighted average number of shares in issue at 31 December 2003 and
31 December 2002, respectively.
Note 3: Reconciliation of operating profit/(loss) to net cash inflow/(outflow)
from operating activities
2003 2002
#000 #000
--------- ---------
Operating profit/(loss) 76 (3,012)
Depreciation 108 62
Loss on disposal of fixed assets - 1
Amortisation of intangible assets 563 281
Non cash share option compensation expense 99 673
Decrease/(increase) in stocks 454 (17)
Increase in debtors (2,407) (421)
Increase in creditors 2,728 674
--------- ---------
1,621 (1,759)
========= =========
Note 4: Analysis of changes in net funds
At 31 At 31
December Acquisition December
2002 movements Cash flow 2003
#000 #000#000 #000
Cash at bank and on hand 740 - 1,448 2,188
Bank overdraft (60) (1,512) 349 (1,223)
------------------------------------- --------
Net cash 680 (1,512) 1,797 965
Debenture loans - - (18,450) (18,450)
------------------------------------- --------
Total 680 (1,512) (16,653) (17,485)
===================================== ========
Note 5: Reconciliation of net cash flow to movements in net debt
2003 2002
#000 #000
--------- --------
Decrease in cash in the year 285 (2,161)
Decrease in debt - 90
--------- --------
Increase/(decrease) in net funds resulting from cash flows 285 (2,071)
Increase in new loans to fund acquisition (18,450) -
--------- --------
Movement in net debt in the year (18,165) (2,071)
Net funds at 1 January 680 2,751
--------- --------
Net (debt)/funds at 31 December (17,485) 680
========= ========
As part of the acquisition of Access Plus, the Group entered into a #20m seven
year facility with HSBC Bank plc, comprising a #16m term loan and a revolving
credit line of #4m. Amounts falling due within one year only include that
element of the loan repayable in 2004. Amounts falling due after more than one
year include the remainder of the loan and the full revolving credit facility.
Note 6: Reconciliation of movements in equity shareholders' funds
2003 2002
#000 #000
--------- --------
Opening equity shareholders' funds 3,695 5,965
Total recognised gains and losses (231) (2,989)
Issued share capital including premium, net of expenses 20,830 46
Increase in share option reserve 99 673
--------- --------
Closing equity shareholders' funds 24,393 3,695
========= ========
Note 7: Analysis of proforma figures in preliminary announcement
Year ended Period ended Proforma
31 December 17 November Annualised
2003 2003 2003
#000 #000 #000
Turnover 20,860 27,020 47,880
--------- ---------- --------
Gross profit 3,426 7,908 11,333
--------- ---------- --------
Earnings before interest,
tax and amortisation 922 3,381 4,303
--------- ---------- --------
Cash inflow from operations 1,621 3,984 5,605
--------- ---------- --------
On 17 November 2003, the company acquired the entire issued share capital of
Access Plus plc. The proforma annualised information combines the pre
acquisition amounts for Access Plus with the amounts for Triple Arc for 2003.
Note 8: Publication of non-statutory accounts
The financial information set out in this preliminary results announcement does
not constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The financial information for the year ended 31 December 2003 is extracted
from the statutory accounts for that year on which the auditors' report was
unqualified. The Accounts for the year ended 31 December 2003 will be delivered
to the Registrar of Companies in due course. The financial information for the
year ended 31 December 2002 is extracted from the statutory accounts of
TripleArc Plc for that year on which the auditors' report was unqualified.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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