Interim Results

IS Solutions PLC 29 September 2003 I S SOLUTIONS PLC INTERIM RESULTS Statement by the Chairman, Barrie Clark The interim results for the 6 months ended 30 June 2003 are in line with the Board's expectations with turnover for the Group at Â£3.24 million (2002: Â£3.62 million (including Â£160,000 from discontinued operations)). Pre-tax profits before goodwill amortisation were Â£358,000 (including Â£455,000 from the sales of investments) (2002: loss Â£661,000) and earnings per share before goodwill amortisation were up to 0.76p (2002: (2.56)p). Cash remains strong at Â£1.353 million (year end 2002: Â£1.094 million, half year 2002: Â£667,000). In view of the continuing uncertain trading conditions the Board has elected not to pay any interim dividend. UK Whilst the market for the IT industry remains challenging and the reduction in our clients' budgets has put severe pressure on pricing, the cost control implemented last year has allowed the Company to come back towards break even at the operating level. Both the Financial Products sector of our business and the Outsourcing side continue to operate profitably with some growth in both areas and continues to cover a substantial proportion of total Company overheads, whilst our Projects division still continues to suffer from the competition from 'Offshore' operations and the general lack of expenditure on new projects. The investment in the areas of Mobility and Analytics mentioned in the year end report are now developed to a level where the Company should benefit from any upturn in IT expenditure. USA As announced in the 2002 year end accounts the US operation was closed down. This was achieved within the accrual made in last years accounts. Outlook The outlook is still uncertain in the Company's markets and, although the Board believes we are at the end of the down cycle, it is still our strategy to maintain a cautious approach until we are completely sure of the recovery. Our balance sheet is strong and with no gearing and a healthy cash position, coupled with a solid core of quality people, we feel confident of being able to take advantage of any increase in IT expenditure. On behalf of the Board Barrie Clark Chairman 26th September 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2003 Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Notes Â£'000 Â£'000 Â£'000 Group Turnover 2 3,236 3,621 7,426 Cost of sales (1,920) (2,165) (4,563) -------- -------- -------- Gross Profit 1,316 1,456 2,863 Distribution costs (996) (1,258) (2,578) Administration expenses (666) (1,080) (1,662) -------- -------- -------- Group operating loss (346) (882) (1,377) Profit on sale of investments 455 - - Profit on ordinary activities before interest 109 (882) (1,377) Investment income 10 3 9 -------- -------- -------- Profit/(loss) on ordinary activities before amortisation 358 (661) (932) Amortisation of goodwill (239) (218) (436) Profit/(loss) on ordinary activities -------- -------- -------- before taxation 2 119 (879) (1,368) Tax on profit on ordinary activities 3 (125) 17 47 -------- -------- -------- Loss on ordinary activities after taxation (6) (862) (1,321) Equity minority interests (45) 10 67 -------- -------- -------- Loss for the period (51) (852) (1,254) Earnings per ordinary share 5 (0.21)p (3.44)p (5.06)p Earnings per share before goodwill amortisation 0.76p (2.56)p (3.30)p -------- -------- -------- Diluted earnings per ordinary share 5 (0.21)p (3.44)p (5.06)p -------- -------- -------- Dividends per ordinary share 4 - - - -------- -------- -------- CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2003 As at As at As at 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Fixed assets Intangible assets 833 1,345 1,099 Tangible assets 366 571 428 Investments 4 29 29 -------- -------- -------- Current assets Debtors 1,995 2,364 1,888 Cash at bank and in hand 1,353 667 1,094 -------- -------- -------- 3,348 3,031 2,982 Creditors Amounts falling due within one year (1,427) (1,382) (1,311) -------- -------- -------- Net current assets 1,921 1,649 1,671 -------- -------- -------- Total assets less current liabilities 3,124 3,594 3,227 Provision for liabilities and charges - - (82) Equity minority interests - (12) 45 -------- -------- -------- Net assets 3,124 3,582 3,190 -------- -------- -------- Capital and reserves Called up share capital 496 496 496 Share premium account 2,133 2,133 2,133 Profit and loss account 495 953 561 -------- -------- -------- Equity shareholder's funds 3,124 3,582 3,190 -------- -------- -------- CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2003 Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Net cash flow from operating activities (166) 24 469 -------- -------- -------- Returns on investments and servicing of finance Interest received 10 3 9 Interest paid - - - -------- -------- -------- Net cash flow from returns on investments and servicing of finance 10 3 9 Taxation (3) 4 (20) Capital expenditure Purchase of intangible fixed assets - - - Purchase of tangible fixed assets (64) (105) (128) Sale of tangible fixed assets 17 46 59 Sale of investments 480 - - -------- -------- -------- Net capital expenditure 433 (59) (69) Acquisitions Purchase of subsidiary - (3) (3) Cash acquired with subsidiary - 8 8 -------- -------- -------- Net cost of acquisition - 5 5 -------- -------- -------- Equity dividends paid - (40) (40) -------- -------- -------- Cash flow before use of liquid resources and financing 274 (63) 354 -------- -------- -------- Increase/(decrease) in cash in period 274 2,566 2,983 -------- -------- -------- NET CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Operating profit/(loss) 109 (882) (1,377) Net depreciation charge 136 219 400 Amortisation of goodwill 239 218 436 Profit on sale of investment (455) - - Change in working capital (195) 469 1,010 -------- -------- -------- Net cash flow from operating activities (166) 24 469 -------- -------- -------- RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET FUNDS Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Increase/(decrease) in cash in the period 274 2,566 2,983 Translation differences (15) 1,805 1,815 -------- -------- -------- Movements in net funds in the year 259 4,371 4,798 Net funds at 1 January 2003 1,094 758 758 -------- -------- -------- Net funds at 30 June 2003 1,353 5,129 5,556 -------- -------- -------- STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Loss for the period (51) (852) (1,254) Currency translation differences 15 1,805 1,815 -------- -------- -------- Total recognised gains and losses (66) 953 561 -------- -------- -------- NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. Basis of Preparation The interim financial statements have been prepared on the basis of accounting policies set out in the Group financial statements for the year ended 31 December 2002. The statements are unaudited but have been reviewed by KPMG Audit Plc. 2. Segmental Analysis Turnover arises from the distribution, design and installation of computer hardware and software systems. Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2002 2002 Â£'000 Â£'000 Â£'000 Turnover UK 3,221 3,461 7,155 USA 15 160 271 -------- -------- -------- 3,236 3,261 7,426 -------- -------- -------- Profit/(loss) before taxation UK 97 (540) (878) USA 22 (339) (490) -------- -------- -------- 119 (879) (1,368) -------- -------- -------- Net assets/(liabilities) UK 3,124 3,586 3,426 USA - (4) (236) -------- -------- -------- 3,124 3,582 3,190 -------- -------- -------- 3. Taxation The taxation charge for the six months ended 30 June 2003 arises principally as a result of the profit on the sale of investments. 4. Dividends The Directors have elected not to pay an interim dividend (2002 interim dividend nil, final dividend nil). 5. Earnings per Share The basic earnings per share figure of (0.21)p (2002: (3.44)p) has been calculated on the basis of a loss for the period of Â£51,000 (2002: Â£852,000) and the weighted average number of shares in issue of 24,793,190 (2002: 24,793,190). The diluted earnings per share figure of (0.21)p has been calculated on the basis that 24,793,190 shares had been in issue in the period (2002: 24,793,190). 6. Interim Results The interim results are unaudited and do not comprise full accounts within the meaning of Section 240 of the Companies Act 1985. Full accounts for the year ended 31st December 2002, on which the auditors gave an unqualified report, have been delivered to the Registrar of Companies. Copies of this statement will be posted to all shareholders in the week commencing 20th October 2003. Further copies are available from the registered office. END This information is provided by RNS The company news service from the London Stock Exchange IR UNONROARKUAR

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