Interim Results
Anite Group PLC
16 January 2001
ANITE GROUP PLC ('ANITE')
Interim results for the six months ended 31st October 2000
Anite Group plc, the European IT consultancy and solutions
business, announces its interim results for the six months ended
31st October 2000. The main highlights are as follows:
HIGHLIGHTS
- Profit before tax* up 42% to £8.5m (1999: £6.0m)
- Earnings per share* up 44% to 2.3p (1999: 1.6p)
- Improved operating margin from continuing businesses 10.9%
(1999: 7.8%)
- Turnover of core businesses up 32.4% to £69.0m (1999: £52.1m)
- Strong organic growth in core businesses:
- Telecoms: Turnover up 123% to £11.6m, Operating profits up
145% to £2.7m
- Consultancy: Turnover up 20% to £47.3m, Operating profits up
40% to £4.9m
- Travel: Turnover up 35% to £10.1m, Operating profits up 43%
to £1.0m
- The December 2000 acquisition of Calculus, which markets billing
solutions to telecoms operators, will enhance the Telecom
Division's product set and contribute to further growth
- Record order backlog at the half year in the Solutions
businesses
* before goodwill amortisation, profit on sale/closure of
discontinued operations and after net interest
Commenting on the results Alec Daly, Chairman, said:
'All of our divisions continue to trade strongly. The second half
has begun well and all divisions continue to show strong organic
growth. Our recent acquisitions are expected to contribute
significantly to Anite's businesses and I am confident that the
Group will demonstrate further outstanding progress for the full
year.'
For further information, please contact: www.anite.com
Anite Group plc 0118 945 0129
John Hawkins, Chief Executive
Simon Hunt, Finance Director
Golin/Harris Ludgate 020 7253 2252
Edward Macquisten/Reg Hoare
CHAIRMAN'S STATEMENT
I am pleased to report half year profits before tax* of £8.5m, 42%
ahead of last year's figure of £6.0m and that earnings per share
have increased 44% to 2.3p (1999:1.6p). All of our core businesses
have traded strongly. Sales of continuing businesses increased by
11.4% to £83.6m (1999: £75.0m). The leading performer was Anite
Telecoms whose profits grew by 145% to £2.7m, with a 140% increase
in half-year orders to £13.0m. Datavance, acquired in July 2000
for £49.4m including earnouts, achieved a profit contribution in
line with expectations.
In December 2000, we announced the acquisition by Anite of
Calculus, which supplies billing solutions to telecoms operators,
for £15.0m on completion, together with an earn out of up to
£35.0m.
*before goodwill amortisation, profit on sale/closure of
discontinued operations and after net interest.
Trading results
Anite Telecoms
The profits for this division increased 145 per cent to £2.7m from
£1.1m. Sales more than doubled to £11.6m (1999: £5.2m). Orders
continued to benefit from strong demand from the division's GPRS
testing solutions and increased to £13.0m (1999: £5.4m), with a
backlog of £8.8m at October 2000. We have received orders of
US$3.0m (£2.0m) from customers in the USA through our office in
Chicago, which opened in July 2000. Testing solutions for next
generation mobile phones, including EDGE and 3G technology,
continue to be developed, and both will be available for shipment
from the beginning of the next financial year.
We have made two acquisitions in pursuance of our strategic
objective of marketing solutions to telecoms operators. Calculus'
billing solutions, acquired in December 2000, are well-suited to
the needs of operators rapidly rolling out network infrastructure,
as they can be implemented over far shorter timescales (typically
3-6 months) than traditional billing solutions. They also provide
strong visibility of interconnect costs, an increasingly
significant factor in operator profitability. Calculus' customers
include major European telecoms operators. Calculus' European
operational capabilities will be enhanced by the local integration
skills provided by Anite Telecoms and our IT Consultancy
businesses. Syzygy, acquired in November 2000 for £3.7m
including earnouts, has developed a solution for network operators
that enables rapid analysis of call traffic.
Anite Travel
This division performed strongly, with profits increasing by 43%
to £1.0m (1999: £0.7m). Sales increased by one third to £10.1m
(1999: £7.5m). Order intake grew by 66% to £13.3m with strong
demand for managed service and e-commerce solutions. The backlog
at October 2000 was £12.8m, half of which is deliverable in
2000/01 and half in the next financial year.
In November 2000, the division acquired Carus Ab for up to £5.3m
including earn out. Carus is a Finnish company that develops and
markets the latest technology ferry reservation and CRM solution.
Anite Travel will market this product to Carus's Nordic customers,
as well as to other European ferry operators including users of
Anite's AFOS ferry reservation system.
IT Consultancy
The Group's consultancy division increased profits by 40% to £4.9m
(1999: £3.5m). Sales increased by 20% to £47.3m (1999: £39.4m)
with a good performance in the banking sector across Europe.
Datavance (France), acquired in July 2000, produced a profits
contribution in line with expectations. The refocusing of GMO
(Germany) in favour of e-commerce skills showed signs of improving
its performance. Anite Public Sector UK was profitable, but was
affected by restructuring costs following the merger of the three
solutions businesses acquired in 1999/00. This business now has a
focused distribution strategy with products supplied to Revenues,
Housing and Social Services departments in Local Authorities being
marketed by a single sales force. We have continued to brand our
consultancy businesses Anite.
IT Personnel
The business has continued to improve margins by focusing on
contingency contract business, and is marketing its e-commerce
solutions to contract customers. As a result of this sales fell to
£14.6m (1999: £22.9m) but profits were maintained at £0.5m (1999:
£0.5m). Sales of permanent recruitment services were encouraging,
and management has been strengthened.
Acquisitions
Datavance, a French IT consultancy employing 350 people focused on
supplying e-commerce and other leading edge technology solutions
to Telecoms and banking companies, was acquired in July 2000. The
initial consideration was Ffr309.2m (£29.9m), comprising Ffr100m
(£9.7m) in Anite shares and Ffr209.2m (£20.2m) in cash. In
addition, there is an earn out of up to Ffr211m (£20.4m) based on
profit performance up to December 2001.
Carus, which markets proprietary ferry reservation solutions to
Nordic operators, was acquired in November 2000 for £0.3m paid in
Anite shares, with an earn out over two and a half years of up to
£5m, based on achieving profit targets.
Syzygy, which has developed a tool used by telecoms operators to
analyse call traffic, was acquired in November 2000 for £0.2m
cash, with an earn out of up to £3.5m over two years based on
achieving licence revenue targets.
Calculus, which develops billing solutions and markets these to
telecoms operators, was acquired in December 2000 for £15.0m on
completion, payable as to £6.5m in cash and the remainder in Anite
shares. In addition, there is an earn out of up to £35m payable in
Anite shares on profits achieved to 30 April 2003.
Cash
At October 2000, the group's net borrowings totalled £6.1m
including a £10.0m unsecured bank loan (1999/00: £6.0m cash). In
June 2000, 8.7m Anite shares were placed for cash to realise
£12.0m, as part financing for the Datavance acquisition, of which
the cash element was £20.2m. In the second half of 2000/01, earn
outs of up to £12.0m will be paid, and £6.4m was provided as cash-
backed loan notes as part of the Calculus acquisition.
Gearing at the half year end stood at 9.8% with interest cover of
15 times. The increase in shares issued during the period to fund
acquisitions is equivalent to 6.7% of the opening share capital.
Board and employees
At an EGM in August 2000, a proposal to introduce overseas SAYE
schemes was approved by shareholders. Overseas schemes have been
introduced in the Netherlands, Germany and France, with a strong
take up by employees. An All Employee Share Ownership Plan was
also approved by shareholders.
Dividend
In accordance with our normal practice, no dividend will be paid
at the half year. As highlighted at the full year, the Board
continues to see many growth opportunities and believes that
shareholder funds would be best-utilised pursuing these
opportunities. As a result of this the Board proposes to suspend
payment of dividends forthwith.
Outlook
All of our divisions continue to trade strongly. Anite Telecoms
entered the second half with a record order backlog and new
distribution capability established in the USA and Japan. We
believe that demand for its solutions addressing mobile phone
manufacturers will remain high, and will be enhanced further by
Calculus' billing solutions for telecom operators.
Anite Travel also has a record order book, and we expect it to
benefit from continued investment by tour operators and online
travel companies in e-commerce and managed services solutions.
Our IT consultancy businesses will benefit from increasing co-
operation between the businesses, and continuing strong demand in
the telecoms, banking, and public sectors.
The second half has begun well and all divisions continue to show
strong organic growth. Our recent acquisitions are expected to
contribute significantly to Anite's businesses and I am confident
that the Group will demonstrate further outstanding progress for
the full year
Alec Daly
Chairman
16 January 2001
For further information, please contact: www.anite.com
Anite Group plc 0118 945 0129
John Hawkins, Chief Executive
Simon Hunt, Finance Director
Golin/Harris Ludgate 020 7253 2252
Edward Macquisten/Reg Hoare
Anite Group plc
Group Profit & Loss Account for the six months to 31 October 2000
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
31 Oct 31 Oct 30 April
2000 1999 2000 00
Notes £'000 £'000 £'000
Turnover
Existing operations 77,546 74,982 146,687
Acquisitions 2 5,995 - -
Continuing operations 83,541 74,982 146,687
Discontinued 2,124 8,948 12,289
========= ========= =========
85,665 83,930 158,976
========= ========= =========
Operating profit
Existing operations 8,164 5,856 13,854
Acquisitions 2 938 - -
Amortisation of goodwill (5,843) (3,219) (6,997)
Total continuing
operations 3,259 2,637 6,857
Discontinued operations 36 (62) (265)
Operating profit 3,295 2,575 6,592
Profit on sale/closure
of discontinued
operations 352 1,821 425
Profit on ordinary
activities before
interest 3,647 4,396 7,017
Interest receivable less
interest payable (606) 294 154
Profit on ordinary
activities before tax 3,041 4,690 7,171
Tax on profits on
ordinary activities 3 (2,407) (1,948) (3,969)
Profit on ordinary
activities after tax 634 2,742 3,202
Minority interest - (94) -
Profit for the period 634 2,648 3,202
Dividend 4 (48) - (750)
Retained profit for the
period 586 2,648 2,452
Earnings per share 7
Basic - after goodwill
amortisation 0.2p 1.1p 1.3p
Basic - adjusted* 2.3p 1.6p 3.9p
Diluted - after goodwill
amortisation 0.2p 1.0p 1.3p
Diluted - adjusted* 2.3p 1.6p 3.9p
* before goodwill amortisation, profit on sale/closure of
discontinued operations and after net interest.
Anite Group plc
Consolidated Statement of Total Recognised Gains and Losses
for the six months ended 31 October 2000
Unaudited Unaudited Audited
6 months 6 months 12
to to months
to
31 Oct 31 Oct 30
2000 1999 April
2000
2000
£'000 £'000 £'000
Profit for the financial
period 634 2,648 3,202
Gain/(loss) on foreign
currency translation 1,169 (173) 960
========= ========= =======
Total recognised gains for
the period 1,803 2,475 4,162
========= ========= =======
Group Balance Sheet as at 31 October 2000
Unaudited Unaudited Audited
31 Oct 31 Oct 30 April
2000 2000 1999 2000
£'000 £'000 £'000
Fixed assets
Intangible 120,131 61,246 75,292
Tangible 11,760 11,919 11,489
Investments 1,310 - 322
========= ========= ========
133,201 73,165 87,103
========= ========= ========
Current assets
Stock and WIP 7,524 4,039 6,929
Debtors 44,687 40,224 41,012
Short term deposits - 3,000 -
Cash at bank and in
hand 5,953 5,983 4,474
========= ========= ========
58,164 53,246 52,415
========= ========= ========
Current liabilities
Bank borrowings (12,103) - (5,012)
Hire purchase (449) (185) (283)
Amounts falling due
within one year (57,081) (54,467) (52,316)
========= ========= ========
(69,633) (54,652) (57,611)
========= ========= ========
Net current
liabilities (11,469) (1,406) (5,196)
Creditors due after
one year
Hire purchase (471) (120) (270)
Other creditors (462) (481) (1,665)
Provisions for
liabilities and
charges (58,632) (39,366) (43,609)
========= ========= ========
(59,565) (39,967) (45,544)
========= ========= ========
Net assets employed 62,167 31,792 36,363
Called-up share
capital 26,725 24,685 25,051
Share premium account 28,276 3,772 5,901
Reserves 7,081 3,151 5,326
Minority interest 85 184 85
========= ========= ========
Total capital employed 62,167 31,792 36,363
========= ========= ========
Anite Group plc
Group Cashflow Statement for the six months to 31 October 2000
Unaudited Unaudited Audited
6 months 6 months 12
to to months
to
31 Oct 31 Oct 30 April
2000 1999 2000
£'000 £'000 £'000
Net cash inflow/(outflow)
from operating
activities 8,377 (4,385) 2,044
Returns on investments
and servicing of
finance (273) 416 402
Taxation (1,801) 198 (1,480)
Capital expenditure and
financial investments (2,638) (1,202) (4,337)
Acquisitions and
disposals (20,775) 7,094 (4,516)
Equity dividends paid (798) (737) (737)
Cash (outflow)/ inflow
before management of
liquid resources and
financing (17,908) 1,384 (8,624)
Management of liquid
resources - - 3,000
Financing 22,296 (781) (198)
========= ========= ========
Increase/(decrease) in
cash in the period 4,388 603 (5,822)
========= ========= ========
Reconciliation of operating profit/ to net cash inflow/(outflow)
from operating activities
Unaudited Unaudited Audited
6 months 6 months 12
to to months
to
31 31 October 30 April
October 1999 2000
2000
£'000 £'000 £'000
Operating profit 3,295 2,575 6,592
Depreciation 1,571 1,149 3,493
Amortisation of goodwill 5,842 3,219 6,997
(Profit)/loss on
disposal of fixed
assets (22) - 509
Increase in stock (595) (2,110) (4,978)
Decrease/(increase) in
debtors 1,896 (1,323) 703
Decrease in creditors (3,120) (7,772) (11,463)
Exchange movement (490) (123) 191
========= ========= ========
Net cash
inflow/(outflow) from
operating activities 8,377 (4,385) 2,044
========= ========= ========
Notes to the Interim Accounts for the six months to 31 October
2000
1.The financial information contained in this document does not
constitute statutory accounts within the meaning of section 240
of the Companies Act 1985. The accounts have been prepared using
accounting policies consistent with those set out in the most
recent audited financial statements. Statutory accounts for the
year to 30 April 2000 have been filed with the registrar of
companies. The Auditors have reported on those accounts; their
report is unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.
2. Acquisitions
Turnover Profit
£'000 £'000
Datavance Group 5,995 938
3. Taxation
£'000
On the profit on ordinary activities for the
period
UK corporation tax 435
Overseas taxation 1,972
=====
2,407
=====
4. Dividends
£'000
Balance of final dividend paid for year ended
30 April 2000 48
Proposed -
=====
48
=====
5.Reconciliation of net cash flow to movement in net debt
£'000
Increase in cash in period 4,388
Increase in bank loan and financing (10,367)
Change in net debt in period (5,979)
Opening net debt (1,091)
========
Closing net debt (7,070)
========
6.Analysis of net debt
1 May 2000 Cash Flow 31 Oct 2000
2000
£'000 £'000 £'000
Cash at bank and in hand 4,474 1,479 5,953
Bank overdrafts (5,012) 2,909 (2,103)
Bank loans - (10,000) (10,000)
Finance leases (553) (367) (920)
========== ========= ==========
(1,091) (5,979) (7,070)
========== ========= ==========
7.The earnings per share has been calculated on the net profit of
£634,000 (1999: £2,648,000) and the average number of shares in
issue of 261,103,833 (1999: 246,139,782) and the weighted
average number of shares (adjusted for dilution) of 265,385,655
(1999: 250,489,393).
The adjusted earnings per share has been based on the adjusted
net profit (excluding goodwill amortisation and profit on
sale/closure of discontinued operations and after net interest)
of £6,125,000(1999: £4,046,000).
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