Final Results
Manpower Software PLC
17 September 2004
Embargoed for 7.00am 17 September 2004
Manpower Software plc
Preliminary results for the year ended 31 May 2004
Manpower Software plc, the provider of manpower planning, staff scheduling and
resource optimisation software, today announces its preliminary statement of
annual results for the year ended 31 May 2004.
Highlights
• Revenues up 45% to £5.15m (2003: £3.56m)
• Annual profit of £455,000 (2003: loss of £802,000)
• Gross margin increased to 32% (2003: 17%)
• Defence scoping study completed with major Commonwealth country, pilot
study in progress
• Three pilot studies secured with NHS Trusts, MAPS Taskforce now in use at
Plymouth NHS Trust
• Board changes implemented to enhance growth prospects
Contracts announced (shown with contract value)
• 1 May 2003 British Army (TA) £3.2m
• 6 June 2003 AP Moller-Maersk Group £1.3m
• 15 September 2003 HQ Land Command £0.6m
• 2 December 2003 Defence Medical Services £1.2m
• 3 December 2003 Plymouth Hospitals NHS Trust £0.6m
Enquiries:
Manpower Software plc
Simon Thorne, Finance Director 020 7389 9500
Shore Capital
Alex Borrelli 020 7408 4090
Manpower Software plc (the "Company")
Results for the year ended 31 May 2004
Chairman's Statement
Results
I am pleased to report a successful end to trading in 2004. Revenue in the
second half of the financial year was £2.69m (first half: £2.46m), making £5.15m
for the year as a whole (2003: £3.56m). As a result, the Company made a profit
in the second half of £195,000, slightly less than the first half profit of
£260,000, reflecting an increase in headcount to improve the Company's delivery
and pre-sales capabilities. The profit for the year as a whole was £455,000.
Importantly, the Company has now shown sustained profitability for a period of
18 months. Cash balances at the year-end amounted to £1.44m.
The table below sets out the results for the last three years, in respect of
continuing operations:
31 May 2004 31 May 2003 31 May 2002
£'000 £'000 £'000
Turnover 5,147 3,560 3,154
Cost of sales (3,521) (2,962) (2,800)
1,626 598 354
Administration costs and interest (1,237) (1,400) (1,373)
Profit / (loss) before tax 389 (802) (1,019)
Taxation 66 - -
Profit / (loss) after tax 455 (802) (1,019)
The 45% increase in turnover is an excellent result for the Company. While the
associated cost of sales figure has also increased in overall terms, the gross
margin percentage has risen to 32% (2003: 17%). This has been achieved at a
time when overseas interest in our products has been increasing, leading to a
consequent increase in the costs associated with progressing these
opportunities. Administrative costs have, however, reduced. The Company will
continue to maintain a tight grip on overhead expenses.
As I mentioned in my Interim Report, I am pleased that the Company's
profitability has been achieved by successes in three markets without dependence
on any one contract.
• In Defence, the British Regular and Territorial Armies have acquired MAPS
for force generation, force modelling, state of readiness and training
management. The software was used to help manage the deployment of
Territorial Army forces to Iraq and may form the foundation of Army force
planning and mobilisation. In July this year, the UK Government announced
its modernisation plans for the British armed forces. Key to the
transformation plans is the provision of highly networked and adaptable
forces, across all three Services, able to exploit the benefits of Network
Enabled Capability. Resources will be generated to strengthen the front
line through efficiency and rationalisation plans, with the benefits
ploughed back into the defence budget. Manpower Software has a growing and
significant role to play in the modernisation process.
• In Cruise and Maritime, MAPS is used for crew manning, on-board duty
rostering and access control services. We are particularly pleased that
Carnival Corporation, through its subsidiary Cunard Line, is using MAPS to
recruit, train and schedule its 1,250 crew on-board the RMS Queen Mary 2,
the largest ocean liner ever built.
• In the Healthcare sector, MAPS provides workforce planning, workforce
development, establishment control and ward rostering for nurses, doctors
and ancillary staff. Scheduling staff efficiently is a crucial part of
hospital workforce management. It is critical that shifts are assigned to
staff who are appropriately skilled to perform them. MAPS has now been
implemented at two NHS sites, Plymouth Hospitals NHS Trust and County
Durham & Tees Valley Strategic Health Authority Area.
In all these markets, MAPS uses its unique time-based functionality to allow
both long-term and short-term scheduling of staff. The same core MAPS software
is used in each market, where it is configured and rebranded to meet each
sector's specific requirements, whether this is for the Armed Forces, on board
ocean-going ships, or hospital ward rostering.
Operational Review
Defence
Following the contract announced in May 2003 to supply the UK Territorial Army
with our Selection and Mobilisation Management Information System, now referred
to as FORGE ("Force Generation"), we announced in September 2003 the further
sale to HQ Land Command for the Regular Army. Since then, we have continued our
work with the UK Armed Forces, resulting in a contract to supply the FORGE
software to the UK Defence Medical Services ("DMS") and continued development of
the software with HQ Land Command.
HQ Land Command is the principal Army headquarters responsible for the
generation of Regular and Territorial Army units and individuals at the right
readiness level, with the correct training and equipment, for operations at
home and overseas. The reserve forces, in particular the Territorial Army, play
a key role in delivering military capability in support of operations. Some
11,000 Reservists have been deployed to date on Operation TELIC in Iraq. At the
heart of this capability is a requirement for detailed knowledge of training
undertaken and preparation for operations, so that the right man, woman or
sub-unit can be rapidly allocated to the right job at the right time. The
Company has been leading the way in supporting HQ Land Command for some time in
developing this critical capability and, recently, brought it into sharp focus
in the Iraq war. At strategic level, work continues to model and analyse
current and future force structures and examine ways in which adjustments might
be made to meet future training needs and commitments. In due course, the
software developed for use by the Territorial Army should also be used widely by
the Regular Army as one coherent system.
The Defence Medical Services (DMS) is the organisation responsible for providing
medical capability to the UK Armed Forces and represents our first Tri-Service
contract award. DMS are using FORGE to plan and manage the deployment and
training of their medical staff throughout the Regular and Reserve Forces within
the Defence Medical Education and Training Agency and the Defence Dental Agency.
The value of the contract is approximately £1.2 million over 41/2 years.
In the Royal Fleet Auxiliary ("RFA"), a customer for many years, MAPS was
accredited for use on all levels of the Royal Navy's NavyStar secure IT
platform. Following successful compliance testing, both at the Royal Navy's
NavyStar team headquarters and during installation on RFA ships, MAPS can now be
used with all versions of the NavyStar platform in use by the Royal Navy and the
RFA.
As mentioned above, the Company is now seeing significant interest in its
products from overseas military forces. During the year, the Company was asked
by a major Commonwealth country to prepare a scoping study for the
implementation of MAPS. This was completed successfully and, since the
year-end, discussions have progressed to the extent that a pilot implementation
of the MAPS software is now also taking place.
Cruise and Maritime
Throughout the year, the Company has delivered software to Carnival Cruise
Lines, Cunard Line, Norwegian Cruise Line and Princess Cruise Lines.
The Cunard system is currently in use on its entire fleet. Norwegian Cruise
Lines ("NCL"), too, has gone live successfully. NCL is using MAPS to support
its fleet of thirteen vessels and 11,000 crew, and has also purchased additional
licences to enable it to roll out the MAPS system to its operation in Hawaii.
Implementations at Princess Cruises and Carnival Cruise Line are scheduled to
complete later this year.
The Company is also implementing the MAPS software at AP Moller-Maersk Group and
has signed a reseller agreement with Maersk Data AS, a subsidiary, whereby the
two companies will work together to promote each others' products and generate
new customer opportunities. With about 3,400 employees and offices in Europe,
Asia and USA, Maersk Data is one of Europe's leading software implementation and
service providers, specialising in the shipping, government and transport
sectors.
National Health Service
During the year, following a successful pilot, we announced a second contract
with Plymouth Hospitals NHS Trust ("PHNT") for the sale of our MAPS Taskforce
ward rostering software. Implementation at PHNT's Derriford Hospital is nearly
complete. The value of the contract is approximately £570,000 over three years.
Derriford Hospital has a total of 6,000 employees and will use MAPS Taskforce
to control the rostering of its staff of nurses, doctors and allied health
professionals.
PHNT had already acquired MAPS Establishment Control, which it uses to match
budgeted organisation costs against those actually incurred, to provide
visibility of its entire establishment of staff and for monitoring personnel
functions.
Since the year-end, we have completed a MAPS implementation at County Durham &
Tees Valley Strategic Health Authority Area ("CDTV"), which has engaged with the
Company to participate in a pilot of the MAPS applications. The pilot is
intended to demonstrate the capability of MAPS to model the impact of change on
CDTV's organisational structure over time. It looked specifically at the
Emergency Care Practitioner (ECP) Scheme and considered trends and changes in
the wider organisation. We have also secured a pilot with Ashford and St
Peter's NHS Trust.
Product Development
Our investment in continued development of the MAPS products in the year
amounted to £1m (2003: £0.8m). It is fully written off in the year in which it
is incurred. In response to market feedback, we have enhanced the capabilities
of our MAPS Taskforce short-term duty rostering product for the Cruise and
Healthcare sectors. The latest upgrade to MAPS includes a completely new and
innovative Payroll Administration module, which will benefit many of our current
and prospective customers.
Board Changes
In the last six months, we have announced the appointment to the Board of two
new Directors.
In June 2004, we announced the appointment of Mr Richard Morgan-Evans as Chief
Operating Officer. Richard has many years international business experience at
senior level, including appointments as President, Managing Director and CEO, in
the European IT industry. He has particular expertise in international sales,
partner development, consultancy, implementation services and product
development, having previously worked successively from 1987-1998 at SSA, first
as Sales Director and then President of the EMEA Division. Richard was
responsible for growing the EMEA Division from sales of $1m to $200m and
personnel from 3 to 500+. Richard's appointment gives us a significantly
enhanced level of commercial skill in negotiating and delivering large scale
contracts.
In March 2004, we announced the appointment of Mr Andrew Pringle CB CBE as a
Non-Executive Director. The increased interest in our Defence products has led
to the need to strengthen further our Defence sales team. Andrew was formerly
Chief of Staff and Director of Operations at the UK's Permanent Joint
Headquarters ("PJHQ"), responsible for the direction, deployment, sustainment
and recovery of all UK forces (Army, Royal Navy and Royal Air Force) committed
to military operations carried out jointly by the three armed services. He
retired in 2001 in the rank of Major General. Andrew brings to the Company his
extensive military experience, including service in the Ministry of Defence, the
Assessments Staff of the Joint Intelligence Committee, and, while at PJHQ, three
years at the heart of the planning and conduct of UK operations worldwide.
Andrew's appointment adds significant credibility and international stature to
the Company's sales proposals.
As mentioned above, the Company now has four MAPS implementations, in various
stages of production, at NHS sites within the UK. It also has the opportunity
to close some significant new business with overseas military forces. Under
Paul Scandrett's leadership the Company has shown sustained profitability and
continuing growth. The potential for further growth of the business, both
within the UK and internationally, has caused the Board to re-assess the
individual roles and responsibilities of senior management to capitalise fully
on specific skills. Accordingly, effective today, I am announcing the following
changes. Richard Morgan-Evans has been appointed Group Managing Director and
Paul Scandrett has been chosen and appointed as Director of Strategic Markets.
Paul has an exceptional ability to break into and establish new strategic
markets, as exemplified by his track record in Cruise and Defence. Initially,
Paul will focus his efforts on the NHS sector to ensure the Company achieves the
success it seeks in this market. For the Company to benefit fully from this
structural change and to allow Paul to concentrate on this critical new role,
Paul has asked to step down from the Board for the time being. Recognising the
benefits that will arise from Paul's single minded focus on the development of
strategic markets, the Board has agreed.
Outlook
In Defence, as a consequence of the supply of FORGE to the British Army, there
is now a high level of interest in Manpower Software's products from many
defence organisations in the UK and overseas. We are currently seeking to
exploit the opportunities available to us and are committed to achieving our
objective to be the leading provider of force generation software in the world.
It is anticipated that the Company's software products will play a key role in
the provision of improved efficiency and the delivery of adaptable forces,
contributing to the integrated command and control systems used by the British
Armed Services for rapid generation of forces with the required balance of
competences and qualifications wherever in the world they may be required. The
Company is presently working with HQ Land Command to deliver further substantive
projects. We are also receiving extensive enquiries for our products from
European and Commonwealth countries, and are pursuing discussions with a number
of these.
In maritime, we are focused upon completing successful rollouts to our existing
customers and building upon the interest generated by the sale made to AP Moller
Group. We are also in advanced stages of discussion with Carnival for the
further roll-out of the MAPS software within its group.
In the UK NHS, following our successes at PHNT, the Company has focussed on the
sale of its rostering software for use at ward level within and across trusts.
Ward rostering is currently a significant overhead for those nurses and doctors
performing it. Staff must be utilised effectively and agency staff used only
when no alternative is available. MAPS handles the end to end rostering
process, ensuring a better allocation of staff, reducing rostering overhead,
giving visibility across the hospital, reducing agency spend and ensuring that
legal requirements are properly enforced. With the appointment of Paul
Scandrett as Director of Strategic Markets and his focus on the NHS, we
anticipate further sales of the PHNT solutions to other NHS Trusts and
substantial development of this important market sector.
While it is the Company's belief that MAPS can be applied to resource planning
and optimisation for a variety of commercial businesses and the public sector,
our present intention remains to focus on these three markets and closely allied
businesses.
The current year has seen an increase in the number of larger opportunities,
driven by the successful sales of our products in three markets. While the
result for the current year should show a continued improvement on those for
2003 and 2004, the allocation between the first and second halves will depend on
the timing of closure of new business. The Directors continue to believe there
is a solid platform for the Company to deliver further improvements in its
results for shareholders.
Robert Drummond
Chairman
17 September 2004
MANPOWER SOFTWARE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2004
Note 2004 2003
£ £
Turnover 5,146,663 3,560,541
Cost of sales (3,520,722) (2,962,437)
Gross profit 1,625,941 598,104
Administrative expenses (1,268,215) (1,404,815)
Operating profit/(loss) 357,726 (806,711)
Net interest 31,180 4,323
Profit/(loss) on ordinary activities before taxation 388,906 (802,388)
Tax on profit/(loss) on ordinary activities 2 66,246 -
Profit/(loss) retained and transferred to/(from) reserves 455,152 (802,388)
Earnings/(loss) per share
Basic 4 1.0p (1.8)p
Diluted 1.0p -
MANPOWER SOFTWARE PLC
CONSOLIDATED BALANCE SHEET
AT 31 MAY 2004
2004 2003
£ £
Fixed assets
Tangible assets 199,942 248,886
Current assets
Debtors 1,636,841 1,561,137
Cash at bank and in hand 1,444,888 2,032,053
3,081,729 3,593,190
Creditors: amounts falling due within one year (1,011,032) (1,993,169)
Net current assets 2,070,697 1,600,021
Total assets less current liabilities 2,270,639 1,848,907
Creditors: amounts falling due after more than one year - (24,619)
Net assets 2,270,639 1,824,288
Capital and reserves
Called up share capital 2,212,254 2,212,254
Share premium account 6,429,879 6,429,879
Profit and loss account (6,371,494) (6,817,845)
Equity shareholders' funds 2,270,639 1,824,288
MANPOWER SOFTWARE PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2004
Note 2004 2003
£ £
Net cash (outflow)/inflow from operating activities i. (519,799) 762,587
Returns on investments and servicing of finance
Interest received 34,868 17,077
Interest paid (2,022) (9,164)
Finance lease interest paid (1,666) (3,590)
Net cash inflow from returns on investments and servicing of 31,180 4,323
finance
Taxation 66,246 -
Capital expenditure and financial investment
Purchase of tangible fixed assets (102,528) (77,408)
Sale of fixed assets - 3,351
Cash (outflow)/inflow before financing and management of liquid (524,901) 692,853
resources
Management of liquid resources
Sale/(purchase) of short term deposits 532,160 (500,000)
Financing
Loan repayments (34,757) (32,813)
Capital element of finance leases (27,507) (28,646)
Net cash outflow from financing (62,264) (61,459)
(Decrease)/increase in cash ii. & (55,005) 131,394
iii.
MANPOWER SOFTWARE PLC
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2004
i. Reconciliation of operating loss to net cash flow from 2004 2003
operating activities £ £
Operating profit/(loss) 357,726 (806,711)
Depreciation charges 148,925 168,332
Foreign exchange movement (6,254) (16,277)
(Increase)/decrease in debtors (75,704) 158,952
(Decrease)/increase in creditors (944,492) 1,258,291
Net cash (outflow)/inflow from operating activities (519,799) 762,587
ii. Reconciliation of net cash flow to movement in net funds 2004 2003
£ £
(Decrease)/increase in cash in the year (55,005) 131,394
Cash outflow from decrease in debt 34,757 32,813
Change in net funds resulting from cash flows (20,248) 164,207
(Decrease)/increase in liquid resources (532,160) 500,000
Payment of finance leases 27,507 28,646
(Decrease)/increase in net funds in the year (524,901) 692,853
Net funds at beginning of the year 1,941,644 1,248,791
Net funds at end of the year 1,416,743 1,941,644
iii. Analysis of change in net funds At 1 June Cash flow At 31 May
2003 2004
£ £ £
Cash at bank and in hand 2,032,053 (587,165) 1,444,888
Less: short term deposits (1,800,000) 532,160 (1,267,840)
232,053 (55,005) 177,048
Short term deposits 1,800,000 (532,160) 1,267,840
Debt (49,917) 34,757 (15,160)
Finance leases (40,492) 27,507 (12,985)
1,941,644 (524,901) 1,416,743
MANPOWER SOFTWARE PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 MAY 2004
2004 2003
£ £
Profit/(loss) for the financial year 455,152 (802,388)
Currency differences on opening reserves (8,801) (16,277)
Total recognised gains and losses for the year 446,351 (818,665)
MANPOWER SOFTWARE PLC
NOTES TO THE ACCOUNTS
FOR THE YEAR ENDED 31 MAY 2004
1. Basis of preparation. The financial information set out above does not
constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
The results for the year ended 31 May 2004 and the balance sheet at that
date have been extracted from the statutory accounts of the Group for that
year, upon which the Company's auditors, Grant Thornton UK LLP, have issued
an unqualified audit report under Section 235 of the Companies Act 1985.
The accounts for the year ended 31 May 2004 will be filed with the
Registrar of Companies following the Annual General Meeting. The financial
information for the year ended 31 May 2004 has been prepared on the basis
of the accounting policies set out in the accounts for the year ended 31
May 2003.
The comparative figures for the year ended 31 May 2003 have been extracted
from the statutory accounts of the Group for that year, filed with the
Registrar of Companies, which carried an unqualified audit report.
2. Taxation
There was no tax charge during 2004 or 2003. A Research and Development
tax credit of £66,246 (2003: £nil) was received during the year.
3. Dividends
No dividends were paid or proposed during either 2004 or 2003.
4. Earnings/(Loss) per share
The calculations of earnings/(loss) per share are based on the following
results and numbers of shares:
2004 2003
£ £
Profit/(loss) for the financial year 455,152 (802,388)
Weighted average number of shares Number Number
of shares of shares
For basic earnings/(loss) per share 44,245,086 44,245,086
For diluted earnings per share 45,412,834 Nil
For diluted earnings per share in 2003, the options were anti-dilutive.
A copy of the Annual Report and Accounts will be sent to all shareholders.
A copy of this preliminary announcement is available from the Company's
registered office: The Communications Building, 1st Floor, 48 Leicester
Square, London WC2H 7LU.
This information is provided by RNS
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