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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vebnet (Hldgs) | LSE:VBT | London | Ordinary Share | GB0032392986 | ORD �1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 253.50 | 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 : 4948D
Vebnet Holdings PLC
17 September 2008
VEBNET (HOLDINGS) PLC
("Vebnet" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2008
AND RECOMMENDED CASH OFFER
Vebnet (Holdings) plc (AIM: VBT), a leading provider of employee reward portal and benefit solutions, is pleased to announce its
preliminary results for the year ended 30 June 2008. The results show substantial growth in both profits and in cash generation.
Highlights
· Excellent trading results on a like for like basis:
- 85% increase in PBT to £0.91m (2007: £0.49m)
- Total revenues up 14% to £6.0m (2007: £5.2m)
- Operating profit up 90% to £0.79m (2007: £0.42m)
- Tight cost control resulting in high operational gearing
- EPS up 86% to 9.7p (2007: 5.2p)
· Excellent visibility of earnings with a 27% increase in recurring licence and renewal revenue to £3.2m
· Healthy balance sheet - 60% increase in the cash balance to £3.0m (2007: £1.9m)
· Buoyant market conditions:
- Significant increase in customers and employees using our FIX&FLEX® product
- 26 new client wins covering 48,000 employees
- Two new long-term licence agreements with employee benefit consultants
· Encouraging trading since the year-end:
- Scheduled implementations for the current financial year are 25
- New customers gained in pharmaceutical and telecoms sectors
Recommended cash offer:
- It is also being announced today that the directors of Vebnet have reached agreement on the terms of a recommended cash offer to
be made by Standard Life plc
- Vebnet shareholders will receive 260 pence in cash for each share held which represents a premium of approximately 114% to the
price of 121.5 pence per Vebnet share (being the closing price on 15 September 2008, the last business day prior to the date of this
announcement)
For further information (including a copy of the full text of the Offer Announcement) please contact
Vebnet
Gerry O'Neill (CEO) Today: 0207 466 5000
Stephen Thurlow (CFO)
Thereafter: 0131 270 5502
Buchanan Communications
(PR adviser)
Diane Stewart, James Montgomerie, 0207 466 5000 or 0131 226 6150
Carrie Clement
VEBNET (HOLDINGS) PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2008
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report that, in the year ended 30 June 2008, Vebnet achieved significant increases in operating profit, PBT and cash
generation over the corresponding period in 2007. This was underpinned by strong organic growth and a number of new contract wins during the
year.
BUSINESS OVERVIEW
Founded in 2000, Vebnet (www.vebnet.com) is a leading provider of technology and managed services related to total reward and flexible
benefit programmes. It launched its FIX&FLEX® product in 2002 and its shares were admitted to trading on AIM in 2003.
Vebnet licences its technology either as an individual solution or as part of a full end-to-end service. The full service covers reward
consultancy, benefit scheme design, communications, brokering, technology, helpdesk and outsourced administration.
Research has proved that the provision of flexible benefit programmes drives employee retention and empowerment. It is also a key
component in managing the cost of employee benefit provision for employers.
FIX&FLEX® is sold on a both direct and an indirect basis. Customers are both UK based and international.
FINANCIAL HIGHLIGHTS
Vebnet maintained its year-on-year growth with sizeable increases in operating profit, PBT and cash generation. PBT increased 85% to
£0.91m (2007: £0.49m) and the year-end cash balance increased to £3.0m (2007: £1.9m). This represents a 60% rise over the corresponding
period, on total revenues which increased 14% to £6.0m (2007: £5.2m). Operating profit increased 90% to £0.79m (2007: £0.42m). Basic
earnings per share increased from 5.2p to 9.7p.
Revenues from Vebnet's core FIX&FLEX® product increased by 33% to £5.1m (2007: £3.8m). Recurring licence and renewal revenue at the
year-end also increased from £2.5m pa to £3.2m pa, an increase of 27%.
The Group tightly managed its cost base during the year. Costs increased by only 8% (after the IFRS adjustment for capitalised
development) to reflect the additional resources required to deliver the volume of new business won. This demonstrates the operating
leverage we have in our business model.
Vebnet has adopted International Financial Reporting Standards - IFRS - for the first time in these results. Prior year results/interims
have been restated to the same basis. The main change in the financial information compared with that previously reported under UK GAAP was
that, in accordance with IAS 38 Intangible Assets, certain product development costs are capitalised rather than expensed when all
conditions of IAS 38 have been met. Previously under UK GAAP all development costs were expensed.
OPERATIONAL OVERVIEW
The number of customer employees using FIX&FLEX® during the year increased by 20% through a combination of organic growth from existing
customers and new contract wins. At 30 June 2008 this totalled in excess of 293,000 employees.
We specifically target firms with 1,000+ employees. This represents the majority of new client wins this year. During the year we gained
26 new clients, an increase of 23%, of which 25 clients (96%) were through our direct channel.
This was pleasing to see as last year we invested in a series of marketing initiatives focused on increasing the number of direct
clients. This channel also produces higher margins for Vebnet in software licence fees and additional services.
Although our client base covers most sectors of the market, we are particularly strong in the telecommunications, professional services
and financial services sectors. I am particularly pleased to report that during 2008, we have expanded our foothold in the pharmaceutical
sector with several new client wins.
During the year we signed two new long-term licence agreements with employee benefit consultants.
FRAMEWORK FOR GROWTH
Throughout the year we realigned our organisation around functional teams that are dedicated to the delivery of client services -
Implementation, Helpdesk & Administration and Scheme Rollovers. Going forward, these teams will have their own KPIs aligned to Vebnet's
overall business objectives.
As we grow the business, we have introduced a number of initiatives around key business processes to ensure even greater efficiency in
delivery and quality across all clients. These initiatives, together with enhanced focus on developing the talents of our people, will be
the foundation of our next phase of organic growth.
MARKET POSITIONING
The market for flexible benefit technology solutions in the UK continues to grow and remains buoyant. We believe that Vebnet technology
is used in a significant number of new flex schemes that go live each year in the UK - making us a leading managed services provider of
employee benefits programmes to major global organisations. We combine creative thinking and innovative technology with service excellence,
and work in close partnership with our clients to design, deliver and manage flexible, employee-focused reward solutions.
We also believe the market is evolving and larger clients are looking more for integrated reward and benefit portal solutions rather
than basic off the shelf packages for flexible benefits and/or Total Reward Statements.
FIX&FLEX® is evolving to reflect this growing need and we believe that this will create more opportunities for Vebnet to integrate its
technology with other complementary platforms and provide client solutions that are a combination of leading edge technology packaged with
our high quality consulting and communications capability.
COMPETITION
We believe the characteristics that differentiate Vebnet from its competitors are:
* FIX&FLEX®'s depth of functionality and ease of configuration
* the quality of our clients and partners
* our accumulated knowledge base and experience
* the quality, energy and dedicated commitment of our people
Our main target market (1,000+ employees) is the one where our experience and technological edge make us an ideal solution provider.
PRODUCT DEVELOPMENT
FIX&FLEX® continues to evolve as a product and a number of key elements of functionality were added this year to support new client
implementations. There have also been a number of architectural changes to FIX&FLEX® including the implementation of our strategic web and
application server architecture (JBoss/ Linux).
ADDITIONAL SERVICES
We have continued to grow the bespoke consulting side of our business and now around 65% of new direct client wins include a consultancy
component. For communications we have developed core product toolkits for clients and also offer a customised benefits communication service
involving a variety of media - print, web and animation.
We continue to see growth in the adoption of helpdesk provision and outsourced administration services for new clients. In total we now
have 19 clients for whom Vebnet provides helpdesk services and 28 clients (covering over 80,000 employees) for whom we provide a full range
of outsourced administration services.
SENIOR MANAGEMENT TEAM
During the year Vebnet strengthened its management team with the appointment of Richard Morgan as Head of Consulting to provide clients
with strategic advice. He is a recognised industry expert with over 20 years experience in the employee benefits sector.
He joins Vebnet from KPMG where he has been driving new business and providing consulting services on employee benefits. Prior to that
Richard was Head of Flexible Benefits for Europe at Watson Wyatt.
CURRENT TRADING & OUTLOOK
Business in the first ten weeks of the new financial year has been encouraging. We now have 25 scheduled implementations for the current
financial year and have gained new customers in pharmaceutical and telecoms sectors.
We have achieved much this year. Our core business has grown substantially over the course of the previous financial year, and we have
performed strongly against all key measures - revenue, profit and cash generation. Our forward sales pipeline is strong, underpinning our
FY09 revenue plan. We are seeing further momentum in Vebnet's core business and the Board remains confident that the company is well
positioned to enjoy future revenue growth.
Derek Scott
Chairman 15 September 2008
VEBNET (HOLDINGS) PLC
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 30 JUNE 2008
Year ended 30 June Year ended 30 June 2007
2008 (restated)
CONTINUING OPERATIONS £000 £000
Revenue 6,001 5,245
Operating costs
Administrative expenses (3,638) (3,210)
Research & development (1,087) (1,268)
Sales & marketing (484) (351)
Operating profit before 792 416
financing costs
Financial income 115 75
Financial expenses - (1)
Profit before taxation 907 490
Taxation - -
Profit for the year 907 490
attributable to equity holders
of the parent
Profit per ordinary share
Basic and diluted profit per 9.7p 5.2p
share
STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSE
The Group has no recognised income and expense other than the results for the year as set out above.
VEBNET (HOLDINGS) PLC
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2008
At30 June 2008 At30 June 2007(restated)
£000 £000
ASSETS
Property, plant and equipment 216 298
Intangible assets 1,015 846
Total non-current assets 1,231 1,144
Trade and other receivables 2,235 2,262
Cash and cash equivalents 3,029 1,894
Total current assets 5,264 4,156
Total assets 6,495 5,300
LIABILITIES
Trade and other payables 1,140 1,184
Deferred income 1,359 1,097
Total current liabilities 2,499 2,281
Total liabilities 2,499 2,281
Net assets 3,996 3,019
Equity
Called up share capital 9,324 9,324
Share premium account 639 639
Other reserve (2,871) (2,951)
Profit and loss account (3,096) (3,993)
Total Equity 3,996 3,019
VEBNET (HOLDINGS) PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 30 JUNE 2008
Year ended30 June Yearended30 June 2007(restated)
2008
£*000 £*000
Cash flows from operating
activities
Profit for the period 907 490
Adjustments for:
Depreciation 153 184
Amortisation of intangible 263 101
assets
Financial income (115) (75)
Equity settled share based 80 -
payment transactions
Operating profit before 1,288 700
changes in working capital
Decrease/(increase) in trade 27 (1,383)
and other receivables
Increase in trade and other 217 776
payables
Cash generated by operations 1,532 93
Investing activities
Finance income received 115 89
Acquisition of property, plant (512) (393)
and equipment and intangible
assets
Reduction in deferred 10 -
consideration
Acquisition of subsidiary - (469)
undertaking
Cash used in investing (387) (773)
activities
Cash flows from financing
activities
Purchase of own shares (60) (90)
Sale of own shares 50 3
Repayment of finance lease - (11)
liabilities
Net cash used in financing (10) (98)
activities
Net increase/(decrease) in 1,135 (778)
cash and cash equivalents
Cash and cash equivalents at 1,894 2,672
start of year
Cash and cash equivalents at 3,029 1,894
the end of year
VEBNET (HOLDINGS) PLC
Consolidated Statement of Changes in Equity
At 30 June 2008
Share Capital Share Premium Other Reserve Profit and Loss Total Equity
Account
£000 £000 £000 £000 £000
Balance at 1 July 2006 9,178 580 (2,951) (4,396) 2,411
Issue of ordinary shares 146 59 - - 205
Purchase of own shares by - - - (90) (90)
employee trust
Sales of own shares by - - - 3 3
employee trust
Net movements recognised 146 59 - (87) 118
directly in equity
Profit for the year - - - 490 490
Total recognised income for 146 59 - 403 608
the year
Balance at 30 June 2007 9,324 639 (2,951) (3,993) 3,019
Purchase of own shares by - - - (60) (60)
employee trust
Sales of own shares by - - - 50 50
employee trust
Equity settled share based - - 80 - 80
payment transactions
Net movements recognised - - 80 (10) 70
directly in equity
Profit for the year - - - 907 907
Total changes in equity for - - 80 897 977
the year
Balance at 30 June 2008 9,324 639 (2,871) (3,096) 3,996
VEBNET (HOLDINGS) PLC
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 30 JUNE 2008
1 STATEMENT OF COMPLIANCE
The financial statements of Vebnet (Holdings) plc and its subsidiaries (the *Group*) for the year ended 30 June 2008 have been prepared in
accordance with applicable law and International Financial Reporting Standards (IFRS) and their interpretations as adopted by the European
Union (adopted IFRS) at 30 June 2008.
These are the first financial statements of the Group and Company prepared in accordance with adopted IFRS and IFRS 1 *First time adoption
of IFRS* has been applied from the transition date of 1 July 2006. The adoption of IFRS has no material impact on the financial statements
of the Group with the exception of IAS 38 relating to the capitalisation of certain product development costs. As a result the 30 June 2008
balance sheet includes an intangible asset in respect of these capitalised development costs with a net book value amounting to £490k (2007:
£161k). Further details relating to the initial adoption of IFRS are included in the Group*s interim statement for the period to 31
December 2007 which is included on the Group*s website.
2 BASIS OF MEASUREMENT
The financial statements of the Group for the year ended 30 June 2008 have been prepared on the going concern basis, under the historical
cost basis except that liabilities for share base payment arrangements are measured at fair value.
3 SEGMENTAL REPORTING
The Group elected for early adoption of IFRS 8 Operating segments. The Group operates in the flexible benefits sector and does not report
any segmental information other than revenue streams. As a result no additional business sector information is provided.
2008£*000 2007£*000
FIX&FLEX®
Direct channel 4,291 2,716
Licence channel 818 1,130
Total 5,109 3,846
FIX&FLEX®
4th Contact 665 612
Other revenue 227 787
6,001 5,245
4 PRELIMINARY ANNOUNCEMENT
The summary accounts set out above do not constitute statutory accounts as defined by Section 240 of the UK Companies Act 1985. The
consolidated balance sheet at 30 June 2008; the consolidated income statement, the consolidated cash flow statement and the consolidated
statement of changes in equity for the year then ended have been extracted from the Group's audited statutory accounts for the year to 30
June 2008 upon which the auditor's opinion is unqualified, and did not contain statements under Section 237(2) or Section 237(3) of the
Companies Act 1985. The statutory accounts for the year ended 30 June 2008 were approved by the Directors on 15 September 2008, but have not
yet been delivered to the Registrar of Companies.
5 EARNINGS PER SHARE
Basic earnings per share
The basic earnings per share is based on the profit for the financial period of £907k (2007: £490k) and on the weighted average number of
ordinary shares in issue during the year of 9,324,183 (2007: 9,287,780).
Diluted earnings per share
The diluted earnings per share is calculated as above except for the inclusion within the weighted average number of ordinary shares in
issue of 55,443 (2007: 33,926) potential ordinary shares deriving from share options in issue during the year, calculated in accordance with
IAS 33 *Earnings per share*.
6 POSTING AND AVAILABILITY OF ACCOUNTS
Copies of the Annual Accounts will be sent to shareholders together with notice for the AGM to be held in Edinburgh on 28 November 2008 and
will be available at the Company's office, 5-9 Thistle Street, Edinburgh, EH2 1DF, or from the Company's website at www.vebnet.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DGGMLRKRGRZM
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