Interim Results

RNS Number : 9482Y
IS Solutions PLC
14 September 2009
 




Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: 14 September 2009

Embargoed: 7.00am




IS Solutions plc

Interim Results for the six months ended 30 June 2009




  • Revenue £5.12million (2008: £3.64 million)


+40.4%

  • Adjusted Operating profit* £213,000 (2008: £157,000)

+36%


  • Pre-tax profit £184,000 (2008: £189,000)

-2%


  • Earnings per share 0.71p (2008: 0.71p)


-

  • Interim dividend 0.33p (2008: 0.33p)


-

  • Strong cash generation resulted in cash and cash equivalents at the half year increasing to  £1.81 million(31 December 2008: £1.76 million)


*Pre amortisation and share based payments


'With an increasing recurring revenue stream and a high level of project revenues, coupled with the continued improvement in operating profit the Board remains confident of meeting market expectations for the full year.'

Barrie Clark, Chairman



FULL STATEMENT ATTACHED



Enquiries:


John Lythall, Managing Director

Keith Gabriel/Fiona Tooley

IS Solutions Plc

Citigate Dewe Rogerson Ltd

Tel: 01932 893333

Tel: 0121 362 4035

www.issolutions.co.uk


Ticker: AIM: ISL



Charles Cunningham


FinnCap


Tel: +44 (0) 207 600 1658


  -2-



IS Solutions plc

Interim Results for the six months ended 30 June 2009



Statement by the Chairman, Barrie Clark

Against a continuing background of economic uncertainty, the Board is pleased to announce the interim results for the period ended 30 June 


Revenue increased by 40.4% to £5.12 million (2008: £3.64 million) of which, 19% was organic and 21% from last year's acquisition. Adjusted operating profit increased by 36% to £213,000 (2008: £157,000) and earnings per share were unchanged at 0.71p (2008: 0.71p) caused by a drop of £40,000 in the interest earned on our cash holdings. Cash flow from operations has again been positive with cash and cash equivalents at the half year increasing to £1.81 million (31 December 2008: £1.76 million).

To further improve our operating position, the Company completed the purchase of its headquarters building in Sunbury on Thames (announced on 4 September 2009) which will lead to a reduction in overheads as we move forward into next year. 


During the year we also invested in establishing a branch office in the Indian sub-continent to help reduce our operating costs and assist us in being more competitive once the UK economy starts to grow again.  This, coupled with strong recurring revenues from a quality client base, has allowed us to retain staff through the recession thereby enabling us to respond to any upturn.


Dividend

In the current economic climate the Board continues to look carefully at its level of dividend. With continued strong cash generation from operations, improving markets and prospects, and the first half results being in line with our expectations, the Board has held the interim dividend at last year's level at 0.33p per ordinary share. The interim dividend will be paid on 30 October 2009 to shareholders on the register at the close of business on 25 September 2009.


Outlook

With an increasing recurring revenue stream and a high level of project revenues, coupled with the continued improvement in operating profit the Board remains confident of meeting market expectations for the full year.


 


Consolidated income statement for the six months ended 30 June 2009 


6 months ended

Year ended


30 June

31 December


2009

2008

2008


 

Restated


 

£'000

£'000

£'000

Continuing operations

 




Revenue

5,119

3,644

8,854

 

Cost of sales 

(3,602)

(2,309)

(5,855)

Gross profit

1,517

1,335

2,999


Distribution costs

(889)

(762)

(1,565)


Administration expenses

(499)

(476)

(1,177)


Other operating income

49

46

92

Profit from operations 

178

143

349


Investment income

6

46

103

Profit before tax 

184

189

452


Tax

(18)

(24)

(22)

Profit attributable to equity holders of the parent

166

165

430

Earnings per share

 




Basic

0.71 p

0.71 p

1.83 p

 

Diluted 

0.70 p

0.70 p

1.82 p


Consolidated statement of changes in equity for the six months ended 30 June 2009


6 months ended

Year ended


30 June

31 December


2009

2008

2008

 

£'000

£'000

£'000


Purchase of own shares

-

(331)

(515)


Sale of own shares

3

16

235


Share-based payments

5

7

14

Total expense recognised directly in equity

8

(308)

(266)


Profit for the period

166

165

430


Dividends paid

(157)

(160)

(238)

Change in shareholders' equity for the period

17

(303)

(74)


Shareholders' equity at start of period

2,997

3,071

3,071

Shareholders' equity at end of period 

3,014

2,768

2,997

  


Consolidated balance sheet as at 30 June 2009 


At

30 June

At

31 December


2009

2008

2008

 

£'000

£'000

£'000

Non-current assets

 




Goodwill

1,134

254

603


Other intangible assets

60

90


Property, plant and equipment

100

144

141


Deferred tax assets

77

61

99

 


1,371

459

933

Current assets

 




Trading investments carried at fair value

-

250


Trade and other receivables

1,510

1,244

2,070


Cash and cash equivalents

1,810

1,860

1,757

 


3,320

3,354

3,827

Total assets 

4,691

3,813

4,760

Current liabilities

 




Trade and other payables

(1,594)

(1,025)

(1,676)

 

Tax liabilities

(71)

(20)

(69)



(1,665)

(1,045)

(1,745)

Non-current liabilities

 




Deferred tax liabilities

(12)

-

(18)

Total liabilities 

(1,677)

(1,045)

(1,763)

Net assets 

3,014

2,768

2,997


 



Equity

 




Share capital

496

496

496


Share premium account

1,786

1,786

1,786


Own shares

(274)

(368)

(280)


Retained earnings

1,006

854

995

Attributable to equity holders of the parent

3,014

2,768

2,997

  


Consolidated cash flow statement for the six months ended 30 June 2009

 


6 months ended

Year ended


30 June

31 December


2009

2008

2008

 

£'000

£'000

£'000

Operating activities

 




Profit from operations

178

143

349

Adjustments for:

 




Depreciation of property, plant and equipment

46

52

116


Gain on disposal of property, plant and equipment

(2)

(2)

(1)


Amortisation of intangible assets

30

7

37


Impairment of goodwill

25


Share-based payments

5

7

14

Operating cash flows before movements in working capital

257

207

540


Decrease/(increase) in debtors

560

(20)

(594)


(Decrease)/increase in creditors

(82)

(85)

379

Cash generated by operations 

735

102

325


Income taxes paid

(20)

Net cash from operating activities 

735

102

305

Investing activities

 




Interest received

6

46

74


Purchase of trading investments

(250)

(250)


Proceeds on disposal of trading investments

279


Purchase of property, plant and equipment

(12)

(74)

(109)


Proceeds on disposal of property, plant and equipment

9

7

6


Acquisition of subsidiary

(531)

(311)

Net cash (used in)/from investing activities

(528)

(271)

(311)

Financing activities

 




Dividends paid

(157)

(160)

(238)


Sale/(purchase) of own shares

3

(315)

(503)

Net cash used in financing activities 

(154)

(475)

(741)

Net increase/(decrease) in cash and cash equivalents

53

(644)

(747)


Cash and cash equivalents at start of year

1,757

2,504

2,504

Cash and cash equivalents at end of period

1,810

1,860

1,757

  


Notes to the interim financial statements


1.    Basis of preparation

The interim financial information for the six months ended 30 June 2009 and 30 June 2008 does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 and has not been audited by the Group's auditors. The financial information for the year ended 31 December 2008 has been extracted from the statutory accounts for that year which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain a statement under s237(2) or (3) of the Companies Act 1985.


The interim financial information has been prepared on the basis of the accounting policies and presentation required by International Financial Reporting Standards, incorporating International Accounting Standards (IAS's) and Interpretations (collectively IFRS), and on a consistent basis with the latest published annual accounts. The comparative amounts for revenue, cost of sales and distribution costs to June 2008 have been restated to comply with the change in accounting policies adopted in those annual accounts, as has the segmental analysis.


2.    Business and geographical segments

For management purposes the Group reports its revenue and gross profit by vendor generated third party sales (distribution) and sales to the Group's own customers (direct). No allocation of operating costs and other income is made because the directors consider that any such allocation would be arbitrary.


Business segments 2009

Direct

Distribution

Unallocated

Total


Revenue

3,984

1,135

-

5,119


Gross profit

1,434

83

1,517


Other income and expense

-

(1,351)

(1,351)


Segment result

1,434

83

(1,351)

166


Assets

1,461

-

3,230

4,691


Liabilities

(437)

-

(1,240)

(1,677)

 

Business segments 2008

Direct

Distribution

Unallocated

Total


Revenue

3,198

446

-

3,644


Gross profit

1,307

28

-

1,335


Other income and expense

-

-

(1,170)

(1,170)


Segment result

1,307

28

(1,170)

165


Assets

1,148

-

2,665

3,813


Liabilities

(708)

-

(337)

(1,045)

 

 

Geographical segments






The group operates entirely within the UK.





 

3.    Earnings per share


6 months ended

Year ended


30/06/2009

30/06/2008

31/12/2008

Earnings attributable to equity holders of the parent

£166,000

£165,000

£430,000

Weighted average of ordinary shares in issue

24,793,190

24,793,190

24,793,190

Weighted average of own shares

(1,362,730)

(1,403,998)

(1,254,024)

Weighted average for calculating basic EPS

23,430,460

23,389,192

23,539,166

Effective dilutive share options

129,892

201,000

81,559

Weighted average for calculating diluted EPS

23,560,352

23,590,192

23,620,725


4.    Dividends

During the period a dividend of £157,000 (0.67p per share) was paid in relation to the year ended 31 December 2008 (2008: £160,000 (0.67p per share) in relation to the year ended 31 December 2007).


An interim dividend of 0.33p per share (2008: 0.33p) is proposed, and will be paid on 30 October 2009 to shareholders on the register at the close of business on 25 September 2009.



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