Interim Results
Dillistone Group PLC
28 September 2006
Dillistone Group Plc
INTERIM REPORT FOR THE SIX MONTHS
ENDED 30 JUNE 2006
Chairman's Statement
I am pleased to present the first interim report of the company following its
admission to trading on AIM, a market operated by the London Stock Exchange, on
15 June this year. This report covers the 6 months ended 30 June 2006.
Financial Performance
The financial results for the 6 Months ended 30 June 2006 show substantial
growth in both turnover and profits over the corresponding period in 2005,
despite the distractions caused by the considerable workload associated with the
Company's admission to AIM.
Turnover in the period increased by 54% to £1,685,121 (6 Months ended 30 June
2005 - £1,094,139), and profits before tax increased by 105% to £554,050 (2005 -
£269,818) despite severe weakening of both the Australian and US Dollars against
the pound. Sales and profits growth in both the UK and European markets have
been particularly strong, although the UK result is flattered by the completion
of a contract amounting to some £80,000 which commenced prior to the year end,
but was completed in February.
Operating margins were enhanced from 25% in the same period in 2005 to 33% in
the 6 months ended 30 June 2006, reflecting the strong sales growth together
with control over operating costs.
Cashflow has continued to reflect the profitable performance of the business,
and at the end of the period we held cash balances of £585,531, compared with
£515,750 at the year end. The cash balance at 30 June reflects the
non-recurring pre-flotation dividend payment to the investors who supported the
management buy out in January 2003.
Earnings per share increased by 111% to 7.49p per share (2005 - 3.55p per
share). At the time of the flotation in June, we indicated that we anticipated
paying an additional dividend of some £100,000 (approximately 1.85 pence per
share) following the publication of these results. The board has decided that,
in the light of these excellent results, this dividend should be increased to
2.5p per share, which will be paid on 10 October 2006 to holders on the register
on 6 October 2006. Shares will trade ex-dividend from 4 October 2006. The
total cost of this dividend will be £135,000.
Flotation
On 15 June 2006 the Company's shares were admitted to trading on AIM. 200,000
new ordinary shares of 5p each were issued at a price of £1.25, raising £250,000
for the Company. The costs of the issue amounted to £240,936, leaving the
Company net proceeds from the issue of £9,064. I would like to record my thanks
to all our staff and professional advisers in this matter for their commitment
to ensuring that the issue and admission to AIM went as smoothly as it did.
As part of the flotation process, share options were granted to all our staff
through both EMI approved and unapproved share schemes. I am pleased that we
were able to introduce these schemes on favourable terms for them, and I look
forward to them becoming shareholders in due course.
Offices
In August 2006 we relocated both our London head office and our Asia-pacific
offices. The move of the London office, in particular, has enhanced the working
environment for our staff.
Prospects
Order intake in all our markets remains reasonably strong, and consistent with
the latter half of 2005 and the first half of 2006. In addition, support
renewals on 1 July 2006 were higher than budgeted, and this should favourably
impact on the result for the latter half of 2006 and the first half of 2007.
The short lead time between taking an order and completing the installation,
however, means that predicting the outcome for the year as a whole is
particularly difficult.
We are working towards the release of version 8 of our 'Filefinder' software.
This will be the first major release for 2 years and experience suggests that
the build up to the launch can have an adverse effect on the performance of the
business in the short term. Specifically, the introduction of the new version
of 'Filefinder' will necessarily require our own staff to be trained for both
support and installation.
The outlook for the retained executive search market remains positive throughout
the world, and the Board believes that the outcome for the year as a whole will
be very satisfactory.
Looking beyond 2006, the trend for the adoption of our 'Filefinder' software by
large corporate clients gives comfort that the group will continue to deliver
further growth.
Jim McLaughlin
28 September 2006.
CONSOLIDATED INCOME STATEMENTS
Year Ended
6 Months Ended 31 December
30/06/06 30/06/05 2005
£ £ £
Revenue 1,685,121 1,094,139 2,530,313
Cost of sales (159,909) (120,927) (271,171)
Gross profit 1,525,212 973,212 2,259,142
Administrative expenses (973,177) (704,555) (1,629,994)
Profit from operations 552,035 268,657 629,148
Investment income 2,015 1,161 2,699
Profit before tax 554,050 269,818 631,847
Tax expense (163,445) (85,310) (199,776)
Profit for the period/year 390,605 184,508 432,071
CONSOLIDATED BALANCE SHEETS
As at
As at 30 June 31 December
2006 2005 2005
£ £ £
ASSETS
Non-current assets
Goodwill 494,393 494,393 494,393
Property, plant & equipment 42,436 25,301 25,345
536,829 519,694 519,738
Current assets
Inventories 6,290 22,300 32,414
Trade and other receivables 720,520 503,943 708,187
Cash and cash equivalents 585,531 321,817 515,750
1,312,341 848,060 1,256,351
Total assets 1,849,170 1,367,754 1,776,089
EQUITY AND LIABILITIES
Equity
Share capital 270,000 105,000 105,000
Share premium - 106,237 106,237
Share option reserve 2,743 - -
Retained earnings 245,809 214,840 304,903
Translation reserve (23,264) 3,203 14,822
Total equity 495,288 429,280 530,962
Liabilities
Current liabilities
Trade and other payables 1,029,283 761,474 1,015,142
Current tax payable 161,154 91,690 229,985
1,190,437 853,164 1,245,127
Non current liabilities
Non-current tax payable 163,445 85,310 -
Total liabilities 1,353,882 938,474 1,245,127
Total liabilities and equity 1,849,170 1,367,754 1,776,089
CONSOLIDATED CASH FLOW STATEMENTS
Year ended
6 Months ended 30 June 31 December
2006 2005 2005
£ £ £
Operating activities
Profit for the year / period 390,605 184,508 432,071
Adjustment for
Depreciation 12,000 8,757 20,366
Share option charge 2,743 - -
Operating cash flows before
movements in working capital 405,348 193,265 452,437
(Increase)/decrease in receivables (12,333) 139,721 (63,254)
Decrease/(increase) in inventories 26,124 6,884 (3,230)
Increase in payables 108,754 67,897 374,550
Net cash used in operating
activities 527,893 407,767 760,503
Investing activities
Purchases of property, plant and
equipment (28,700) (8,840) (21,762)
Net cash used in investing activities (28,700) (8,840) (21,762)
Financing activities
Capital contributions 9,064 - -
Dividends paid (400,000) (210,000) (367,500)
Net cash provided by
financing activities (390,936) (210,000) (367,500)
Net increase
in cash and cash equivalents 108,257 188,927 371,241
Cash and cash equivalents at
beginning of year /period 515,750 124,125 124,125
Effect of foreign exchange rate changes (38,476) 8,765 20,384
Cash and cash equivalents at
end of year /period 585,531 321,817 515,750
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Share Retained Foreign
option
capital premium reserve earnings exchange Total
£ £ £ £ £ £
Balance at 31 December 2004 105,000 106,237 240,332 (5,562) 446,007
Profit for the 6 months ended 30 June - - - 184,508 - 184,508
2005
Exchange differences on translation of
Overseas operations - - - - 8,765 8,765
Dividends paid - - - (210,000) (210,000)
Balance at 30 June 2005 105,000 106,237 - 214,840 3,203 429,280
Profit for the 6 months ended 31
December
2005 - - - 247,563 - 247,563
Exchange differences on translation of
Overseas operations - - - - 11,619 11,619
Dividends paid (157,500) (157,500)
Balance at 31 December 2005 105,000 106,237 304,903 14,822 530,962
Profit for the 6 months ended 30 June 390,605 390,605
2006
Bonus issue from reserves 155,000 (106,237) - (48,763) -
Issue of share capital 10,000 240,000 - - - 250,000
Costs of the issue - (240,000) - (936) - (240,936)
Fair value of share option expense - - 2,743 - - 2,743
Exchange differences on translation of
Overseas operations - - - - (38,086) (38,086)
Dividends paid - - - (400,000) - (400,000)
Balance at 30 June 2006 270,000 - 2,743 245,809 (23,264) 495,288
NOTES TO THE INTERIM REPORT
1. Basis of Preparation
The comparative figures for the year ended 31 December 2005 were derived from
the statutory accounts for that year which have been delivered to the Registrar
of Companies. Those accounts received an unqualified audit report which did not
contain statements under sections 237(2) or (3) (accounting record or returns
inadequate, accounts not agreeing with records and returns or failure to obtain
necessary information and explanations) of the Companies Act 1985.
On 7 June 2006, Dillistone Group Limited changed its name to Dillistone Group
Plc.
The interim financial statements have been prepared on the basis of the
accounting policies set out in the financial statements included in the
Accountants' Report set out in the Admission Document for Dillistone Group Plc
dated 14 June 2006.
2. Revenue and result
Geographical segments
The following table provides an analysis of the Group's sales by geographical market.
Year ended
6 Months ended 30 June 31 December
2006 2005 2005
£ £ £
UK 915,174 531,184 1,213,607
Europe 338,722 225,017 520,377
USA 285,537 199,125 460,499
Australia and Asia Pacific 145,688 138,813 321,018
Africa - - 14,812
1,685,121 1,094,139 2,530,313
Business Segment
The following table provides an analysis of the Group's sales by business segment.
Year ended
6 Months ended 30 June 31 December
2006 2005 2005
£ £ £
Recurring 612,888 422,775 977,713
Non recurring 1,072,233 671,364 1,552,600
1,685,121 1,094,139 2,530,313
Recurring income includes all support services, and web hosting income. Non-recurring income
includes sales of new licenses, and income derived from installing those licenses including training,
installation, and data translation
2. Revenue and result (continued)
Result
The following table provides an analysis of the Group's result by geographical market.
Year ended
6 Months ended 30 June 31 December
2006 2005 2005
£ £ £
UK 299,883 98,507 227,137
Europe 233,935 153,003 352,795
USA 68,216 73,278 168,965
Australia and Asia Pacific 66,847 57,240 131,982
Africa - - 13,676
668,881 382,028 894,555
Unallocated Expenses (116,846) (113,371) (265,407)
Profit from Operations 552,035 268,657 629,148
3. Dividends
Dividends of the equivalent of 7.692 pence per share amounting to £400,000 have
been paid in respect of the year ending 31 December 2006 on 24 May 2006. A
further dividend of 2.5 pence per share, totaling £135,000 is will be paid on 10
October 2006 to holders on the register on 6 October 2006.
4. Earnings per share
Year ended
6 Months ended 30 31 December
June
2006 2005 2005
£ £ £
Profit attributable to ordinary shareholders 390,605 184,508 432,071
Weighted average number of shares 5,217,778 5,200,000 5,200,000
Basic earnings per share (pence) 7.49 3.55 8.31
For comparative purposes, earnings per share have been calculated on the basis
that the subdivision and bonus issue of share which took place on 6 June 2006
had taken place on 1 January 2005.
5. Reconciliation from UK GAAP to IFRS
These accounts are the Group's first consolidated interim financial statements
for part of the period that the first annual consolidated financial statements
will be prepared in accordance with IFRS. An explanation of how the transition
from UK GAAP to IFRS has affected the Group's financial position and financial
performance is set out in the following tables. There have been no changes to
the Group's cash flows as a result of the transition.
As at 30 As at 30 As at 31
June June December
Balance sheet reconciliation 2006 2005 2005
£ £ £
Total equity reported under UK GAAP 408,768 367,479 457,452
Amortisation of goodwill eliminated 86,520 61,800 74,160
Other adjustments - - (650)
Total equity reported under IFRS 495,288 429,279 530,962
Period Year ended
ended 30 31
June December
Income statement reconciliation 2005 2005
£ £
Profit for the period reported under UK GAAP 172,148 408,992
Amortisation of goodwill eliminated 12,360 24,720
Other adjustments - (1,641)
Profit for the period reported under IFRS 184,508 432,071
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