Results for the six months ended 30 June 2013

RNS Number : 1663P

IS Solutions PLC

30 September 2013

 

Issued by TooleyStreet Communications
Date: Monday, 30 September 2013	Immediate Release

IS Solutions Plc

Half-year Results for the six month period ended 30 June 2013

"Strong Q2 bookings in Analytics and Enterprise Content Management helps continued growth in revenue and profit for the business"

Financial highlights:	Six months ended		% increase
	June 2013	June 2012
·      Revenue	£4.96million	£4.52m	+9.6%
·      Group profit before tax	£345,000	£337,000	+2.4%
·      Diluted earnings per share	1.29pence	1.25p	+3.2%
·      Confidence underpins increase in Interim dividend	0.48pence	0.44p	+9.1%
·      Strong cash position	£657,000	£204,000

Commercial highlights:
	Ø Solid new business wins underpins performance for full year
	Ø Strong order bookings as part of 'Big Data' revolution
	Ø Encouraging pipeline of opportunities ahead
	Ø Analytics is the fastest growing area with 39% of bookings in Support Services
	Ø With our historic high levels of recurring revenues, the Board continues to be optimistic for the future

"The business is continuing to witness top and bottom line growth; the more recent flow of positive news about the UK economy has matched our own experience and is reflected in both strong bookings and new business in our Analytics and ECM business areas and these will help underpin our growth and development for the rest of the year and into 2014.

Barrie Clark, Chairman,

IS Solutions Plc

Enquiries:
IS Solutions Plc John Lythall, Managing Director Tel: [phone] www.issolutions.co.uk Ticker: AIM: ISL	FinnCap Nomad & Broker Corporate Finance: Ed Frisby Corporate Broking: Stephen Norcross Tel: [phone]	TooleyStreet Communications IR & media relations Fiona Tooley Tel:[phone] Office: [phone]

I S Solutions Plc

Half-year results for the six months ended 30 June 2013

Statement by the Chairman, Barrie Clark

The Board is pleased to announce the business is continuing to witness top and bottom line growth and the strong Q2 order book has provided an encouraging and solid foundation going into the second half of the financial year.

Financials

Revenue in the first half was up by 9.64% to £4.960 million (2012: £4.524m) whilst Profit before tax increased from £337,000 in the comparable 2012 period to £345,000 by June 2013, a growth of 2.37%.  Post tax profit at £330,000 (2012: £317,000), also higher by 4.10%.  Fully diluted earnings per share rose by 3.2% to 1.29 pence (2012: 1.25p).

The Group continues to generate cash and at the half year stage our cash position stood at £657,000 (2012: £204,000).

Reflecting the UK as a whole, 2013 started slowly and during the Q1 period this trend continued, however, we remained focused on servicing our clients and targeting new business and we were pleased to see that a combination of our own actions and the market outlook brightening, our Q2 period performance helped to put us back on track for growth, and positioning us well for the rest of this financial year.

Looking at the progress made during the first half in the three key areas of our business:-

·      Analytics:

Bookings in the first half of 2013 showed an increase of 258% over the second half of 2012 and an increase of 120% over the whole of 2012.  Analytics is the fastest growing area of our business and accounted for 46% of the total Company bookings in this period, 39% of which was in Support Services thus increasing the level of recurring revenue as we go forward.  It is pleasing to report that a large part of this growth came from a major contract win which we believe is likely to be added to as time progresses.

·      Portals

Bookings for this area of our business dropped by 16% over the second half of 2012 due to budget constraints for one of our major clients.  Portals represented 35% of first half total bookings.  Activity did pick up in the second quarter with the pipeline (new business being quoted) on the increase as we move into the third quarter.

·      Enterprise Content Management (ECM)

Our third area of business also showed strong growth in bookings and by the close of the half year was showing a 56% increase over the second half of 2012.  ECM now accounts for 19% of total bookings.

It is not surprising that we are experiencing strong bookings in the areas of Analytics and ECM as they are both part of the 'Big Data' revolution that we all hear so much about - with the improvements that we appear to be experiencing in the UK economy we are hoping also for a return to growth in the Portals business as we go through the year.

Dividend

Earnings per share advanced in the period by 3.2% compared to HY2012.  Therefore, in line with our progressive dividend policy, the Board is declaring a 9.1% uplift in the half year dividend to 0.48 pence (2012: 0.44p); this will be paid on 25 October 2013, to qualifying shareholders on the Register at the close of business on 11 October 2013.

The Directors remain confident that, based on the Company's first half performance which finished with strong bookings by the end of Q2 and the pipeline of opportunities that are beginning to open up looking forward, the business is capable of achieving the current market expectations for EPS growth.

Outlook

Firstly looking back on the half, the first quarter of 2013 gave us a very slow start to the year as the UK economy almost stumbled back into recession.  However, the more recent flow of positive news about the UK economy has matched our own experience and is reflected in both strong bookings and new business in our Analytics and ECM business areas and these will help underpin our growth and development for the rest of the year and into 2014.

Against this background and with our historic high levels of recurring revenues, the Board continues to be optimistic for the future, and looks forward to keeping shareholders updated with its progress.

On behalf of the Board

30 September 2013

I S Solutions Plc Consolidated statement of comprehensive income for the six months ended 30 June 2013
				Six months ended		Year ended
				30 June		31 December
				2013	2012	2012
				£'000	£'000	£'000
	Continuing operations
		Revenue		4,960	4,524	9,208
		Cost of sales		(3,174)	(2,656)	(5,321)
	Gross profit			1,786	1,868	3,887
		Distribution costs		(998)	(1,174)	(2,293)
		Administration expenses		(467)	(379)	(842)
		Other operating income		7	26	38
	Profit from operations			328	341	790
		Finance costs		(13)	(16)	(33)
		Other gains and losses		30	12	35
	Profit before tax			345	337	792
		Tax		(15)	(20)	(62)
	Profit for the period			330	317	730
Total comprehensive income for the period attributable to equity holders of the parent				330	317	730
	Earnings per share
		Basic		1.32p	1.27p	2.92p
		Diluted		1.29p	1.25p	2.86p
Consolidated statement of changes in equity for the six months ended 30 June 2013
				six months ended		Year ended
				30 June		31 December
				2013	2012	2012
				£'000	£'000	£'000
		Purchase of own shares		(31)	-	(8)
		Sale of own shares		27	-	3
		Share-based payments		2	2	3
	Total expense recognised directly in equity			(2)	2	(2)
		Profit for the period		330	317	730
		Issue of share capital		31	-	34
		Dividends paid		(251)	(224)	(335)
	Change in shareholders' equity for the period			108	95	427
		Shareholders' equity at start of period		4,845	4,418	4,418
	Shareholders' equity at end of period			4,953	4,513	4,845

I S Solutions Plc Consolidated balance sheet as at 30 June 2013
				At 30 June		At 31 December
				2013	2012	2012
				£'000	£'000	£'000
	Non-current assets
		Goodwill		1,018	1,118	1,018
		Other tangible assets		47	-	56
		Property, plant and equipment		2,302	2,394	2,361
		Investments		800	700	800
		Deferred tax assets		17	8	17
				4,184	4,220	4,252
	Current assets
		Investments		-	538	561
		Trade and other receivables		3,593	2,111	2,672
		Cash and cash equivalents		657	204	70
				4,250	2,853	3,303
	Total assets			8,434	7,073	7,555
	Current liabilities
		Trade and other payables		(2,672)	(1,353)	(1,541)
		Tax liabilities		(25)	(19)	(57)
		Borrowings		(162)	(151)	(155)
				(2,859)	(1,523)	(1,753)
	Non-current liabilities
		Borrowings		(622)	(1,037)	(957)
	Total liabilities			(3,481)	(2,560)	(2,710)
				4,953	4,513	4,845
	Equity
		Share capital		506	499	503
		Share premium account		1,870	1,812	1,842
		Revaluation reserve		50	50	50
		Retained earnings		2,527	2,152	2,450
	Attributable to equity holders of the parent			4,953	4,513	4,845

I S Solutions Plc Consolidated cash flow statement for the six months ended 30 June 2013
				six months ended		Year ended
				30 June		31 December
				2013	2012	2012
				£'000	£'000	£'000
	Operating activities
		Profit from operations		328	341	790
	Adjustments for:
		Depreciation of property, plant and equipment		83	76	161
		Amortisation of intangible assets		9	-	-
		Impairment of goodwill		-	-	100
		Share-based payments		2	2	3
	Operating cash flows before movements in working capital			422	419	1,054
		(Increase)/decrease in debtors		(921)	228	(333)
		Increase/(decrease) in creditors		1,131	(586)	(398)
	Cash generated by operations			632	61	323
		Income taxes paid		(47)	(28)	(41)
	Net cash from operating activities			585	33	282
	Investing activities
		Interest paid		(13)	(16)	(33)
		Purchase of non-current investments		-	-	(100)
		Proceeds on sale of trading investments		591	-	-
		Capitalisation of development costs		-	-	(56)
		Purchase of property, plant and equipment		(24)	(45)	(97)
	Net cash used in investing activities			554	(61)	(286)
	Financing activities
		Issue of new share capital		31	-	34
		Dividends paid		(251)	(224)	(335)
		Repayment of borrowings		(328)	(75)	(151)
		Purchase of own shares (net)		(4)	-	(5)
	Net cash used in financing activities			(552)	(299)	(457)
	Net movement in cash and cash equivalents			587	(327)	(461)
		Cash and cash equivalents at start of year		70	531	531
	Cash and cash equivalents at end of period			657	204	70

I S Solutions Plc Notes to the interim financial statements
1.	Basis of preparation
	The interim financial information for the six months ended 30 June 2013 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and has not been audited by the Group's auditors. The financial information for the year ended 31 December 2012  has been extracted from the statutory accounts for that year which have been filed with the Registrar of Companies and which contain an audit report with an unmodified audit opinion and did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The interim financial information has been prepared on the basis of the accounting policies and on a consistent basis with the latest published annual accounts.  Those financial statements were prepared in accordance with International Financial Reporting Standards, incorporating International Accounting Standards (IAS's) and Interpretations (collectively IFRS).
2.	Business and geographical segments
	The Group has one reportable business segment.  The information presented to the Chief Executive for the purpose of resource allocation and assessment of segment performance is focused on the type of product sold, as shown below.  No allocation of other income and costs to these categories is made because the Directors consider that any such allocation would be arbitrary, as would be any allocation of assets and liabilities.
	Continuing operations 2013:
			License sales £'000	Project work £'000	Recurring revenues £'000	Total £'000
		External sales	4,301	1,873	2,296	8,470
		Adjustment for agency basis	(3,200)	-	(310)	(3,510)
		Reported revenue	1,101	1,873	1,986	4,960
		Segment result (gross profit)	213	359	1,214	1,786
		Other operating costs and income				(1,458)
		Investing and financing activities				17
		Profit before tax				345
		Continuing operations 2012:
			License sales £'000	Project work £'000	Recurring revenues £'000	Total £'000
		External sales	724	1,303	3,010	5,037
		Adjustment for agency basis	-	-	(513)	(513)
		Reported revenue	724	1,303	2,497	4,524
		Segment result (gross profit)	196	378	1,294	1,868
		Other operating costs and income				(1,527)
		Investing and financing activities				(4)
		Profit before tax				337
	Geographical segments
	The Group operates entirely within the UK.

3.		Earnings per share	six months ended 30 June		Year ended 31 December
			2013	2012	2012
	Earnings attributable to equity holders of the parent		£330,000	£317,000	£730,000
	Weighted average of ordinary shares in issue		25,146,291	24,937,578	24,937,578
	Weighted average of own shares		(80,343)	-	-
	Weighted average for calculating basic EPS		25,065,948	24,937,578	24,937,578
	Effective dilutive share options		449,290	418,778	539,568
	Weighted average for calculating diluted EPS		25,515,238	25,356,356	25,477,146

4.	Dividends	six months ended 30 June		Year ended 31 December
		2013	2012	2012
		£'000	£'000	£'000
	Amounts recognised as distributions to equity holders
	Interim dividend for the year ended 31/12/12 of 0.44p	-	-	99
	Final dividend for the year ended 31/12/12 of 1.00p (2011: 0.90p)	251	224	236
		251	224	335
	An interim dividend of 0.48p per share will be paid on 25 October 2013 to shareholders on the register at the close of business on 11 October 2013. The ex-dividend date is 9 October 2013	121
5.	Current liabilities - borrowings	six  months ended 30 June		Year ended 31 December
		2013	2012	2012
		£'000	£'000	£'000
	Bank mortgage	162	151	155
6.	This statement will be posted to shareholders and a copy will be available on the Company's website.

 

END

 

 

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