Interim Results

RNS Number : 2317T

Dillistone Group PLC

24 September 2010

 



24 September 2010

Dillistone Group Plc

("Dillistone", the "Company" or the "Group")

Unaudited Interim Results for the six months ended 30 June 2010

Dillistone, the AIM quoted supplier of recruitment software, is pleased to announce its Interim Results for the six months ended 30 June 2010.

Highlights:

·     Revenue up 8% to £1.968m

o  Non-recurring revenues up 22% to £0.755m

o  Recurring revenues of £1.213m up 1% on H1 2009 (£1.204m) and 6% on H2 2009 (£1.140m)

·     Operating profits up 10% to £0.511m

·     Basic earnings per share up 3.9% to 6.67p

·     Increase in subscription based sales - offering increased confidence in visibility of future revenues

·     Net cash inflow over period - cash of £1.912m at 30 June 2010

·     The Group continues to be debt free

·     Dividend policy maintained, with Interim payment of 3.5p due in November

·     Strong project pipeline carried into H2 2010

Commenting on the results, Mike Love, Chairman of Dillistone, said:

"Against an unsettled economic backdrop, these results represent excellent progress.  We are carrying a strong pipeline into H2 2010 and this, along with our high level of recurring revenues, gives us confidence in our ability to meet market expectations for the full year."

For further enquiries:

Mike Love, Chairman, Dillistone Group Plc	020 7749 6100
Jason Starr, Managing Director, Dillistone Group Plc	020 7749 6100
Emily Staples, Religare Capital Markets (Nomad)	020 7444 0800
Daniel Briggs, Religare Capital Markets (Broker)	020 7444 0500
Tom Cooper, Winningtons Financial PR	0797 122 1972 [e-mail]

Notes to Editors:

Dillistone Group Plc is a leader in the supply and support of recruitment software to the search and selection market.  Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc in June 2006.

Dillistone develops, publishes and supports Filefinder, its executive recruitment software, for recruitment companies and in-house recruitment teams.  Filefinder is unique in providing tailored workflow and 24 hour support for global users, to mirror the profile and demands of an executive search assignment.  Filefinder has been adopted by around 1000 companies in more than 55 countries.

Chairman's Statement

The Group has had an excellent start to 2010 with a number of significant indicators showing an improvement over the same period in the previous year.   

Financial Performance

Revenue in the 6 months ended 30 June 2010 increased by 8% to £1.968m (2009: £1.822m) with operating profits showing an increase of 10% to £0.511m (2009: £0.466m).  Administrative costs increased by 8% to £1.397m (2009: £1.296m), with the increase due mainly to higher depreciation costs (increase of £0.022m) and one-off costs of £0.048m.

Recurring revenues increased by 1% to £1.213m (2009: £1.204m) and by 6% over the £1.140m of recurring revenues earned in the second half of 2009.    Recurring revenues in the 6 months to 30 June 2010 accounted for 62% of total revenues (2009: 66%).  It should be noted that we are increasingly delivering our platform via a subscription pricing model.

Non recurring revenues saw a 22% growth to £0.755m (2009: £0.618m). This reflects a significant year-on-year improvement in new contract wins.

Regionally, our European division saw a 19% fall in revenues and Asia Pacific saw a 77% increase.  The UK, Middle East and Africa ("UKMEA") business saw revenues increase by 17% and the US division showed a marginal increase of 2% in revenues for the same period.  The profitability of the European business has been impacted by a management charge from the UKMEA business. 

Cash flow in the 6 months ended 30 June 2010 showed a net cash inflow of £0.107m (2009: outflow £0.532m).  The main elements of expenditure related to dividends in the period of £0.396m (2009: £0.396m) and investment in new product development of £0.279m (2009: £0.235m).  At 30 June 2010 we had cash reserves of £1.912m (2009: £1.795m).  The Group does not have any borrowings.

The tax provision increased to £0.134m in the period to 30 June 2010 (2009: £0.119m).  This gives an effective global tax rate of 26.2% (2009: 25.3%).  The 2009 and 2010 rates have been reduced by a claim in the UKMEA for research and development tax credit reflecting the continuing development of our products.

Basic earnings per share amounted to 6.67p (2009: 6.42p).  As announced in our annual report for 2009, the Board has decided to maintain the Interim dividend for 2010 at the same level as was paid in respect of 2009, and accordingly a dividend of 3.5p per share (2009: 3.5p) will be paid on 5 November 2010 to holders on the register on 8 October 2010.  Shares will trade ex-dividend from 6 October 2010.

Board Changes

Jim McLaughlin resigned as Executive Chairman and Finance Director in February 2010 and I stepped into the role of Non-Executive Chairman.  Julie Pomeroy joined us as Finance Director in April 2010 and has also become Company Secretary.  Giles Fearnley became a Non-Executive Director in May and is chair of the audit committee.

Outlook

The Group has made an excellent start to the year, a performance which does not appear to be reflected in a peer group comparison across the sector.  A strong project pipeline was carried into the second half of 2010 yet we remain cautious.

While continued uncertainty about the state of the economy makes it difficult to predict long term performance, our post period performance, combined with this excellent start to the year underpins our confidence in our ability to achieve market expectations for 2010.

The Group enjoys a strong balance sheet and remains debt free.  As such, the Board considers it well placed to compete in the global market place in which it operates.

The Board continues to follow a growth strategy and will, as part of this strategy, consider acquisitions or joint ventures that would enhance its product portfolio and deliver shareholder value. 

Mike Love

23 September 2010

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
			Year ended
	6 Months ended 30 June		31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£000	£000	£000
Revenue	1,968	1,822	3,655
Cost of sales	(60)	(60)	(113)
Gross profit	1,908	1,762	3,542
Administrative expenses	(1,397)	(1,296)	(2,468)
Result from operating activities	511	466	1,074
Financial income	1	5	7
Profit before tax	512	471	1,081
Tax expense	(134)	(119)	(244)
Profit for the period/year	378	352	837
Other comprehensive income:
Currency translation differences	(14)	(25)	(17)
Total comprehensive income for period/year	364	327	820
Earnings per share (pence)
Basic	6.67	6.42	15.02
Diluted	6.63	6.17	14.68

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
					As at
		As at 30 June			31 December
		2010	2009		2009
		Unaudited	Unaudited		Audited
ASSETS		£000	£000		£000
Non-current assets
Intangible assets		1,394	912		1,167
Property plant & equipment		83	132		96
		1,477	1,044		1,263
Current assets
Inventories		28	31		56
Trade and other receivables		1,242	1,311		1,260
Cash and cash equivalents		1,912	1,795		1,819
		3,182	3,137		3,135
Total assets		4,659	4,181		4,398
EQUITY AND LIABILITIES
Equity
Share capital		283	283		283
Share premium		30	29		30
Share option reserve		12	9		10
Retained earnings		1,889	1,621		1,907
Translation reserve		92	99		106
Total equity		2,306	2,041		2,336
Liabilities
Non current liabilities
Deferred tax		141	3		93
Current liabilities
Trade and other payables		2,117	2,014		1,925
Current tax payable		95	123		44
Total liabilities		2,353	2,140		2,062
Total liabilities and equity		4,659	4,181		4,398
The interim report was approved by the board of directors and authorised for issue on 23 September 2010. They were signed on its behalf by:
J S Starr		J P Pomeroy

CONSOLIDATED STATEMENT OF CASH FLOWS
			Year ended
	6 Months ended 30 June		31 December
	2010	2009	2009
	Unaudited	Unaudited	Audited
	£000	£000	£000
Operating Activities
Profit from operations	511	466	1,074
Less taxation paid	(35)	(173)	(286)
Adjustment for
Depreciation	93	71	160
Share option expense	2	-	-
Operating cash flows before movements
in working capital	571	364	948
Decrease / (Increase) in receivables	18	(5)	46
Decrease / (Increase) in inventories	28	20	(5)
(Decrease) / Increase in payables	192	(314)	(403)
Net cash generated from operating activities	809	65	586
Investing Activities
Interest received	1	6	7
Purchases of property plant and equipment	(28)	(14)	(20)
Investment in product development	(279)	(235)	(537)
Net cash used in investing activities	(306)	(243)	(550)
Financing Activities
Proceeds from issue of share capital	-	42	42
Dividends paid	(396)	(396)	(594)
Net cash used by financing activities	(396)	(354)	(552)
Net change in cash and cash equivalents	107	(532)	(516)
Cash and cash equivalents at beginning of the period	1,819	2,352	2,352
Effect of foreign exchange rate changes	(14)	(25)	(17)
Cash and cash equivalents at end of period	1,912	1,795	1,819

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
			Share
	Share	Share	option		Retained	Foreign	Total
	capital	premium	reserve		earnings	exchange
	£000	£000	£000		£000	£000	£000
Balance at 31 December 2008	270	-	40		1,634	124	2,068
Profit for the 6 months ended 30	-	-	-		352	-	352
June 2009
Issue of share capital	13	29	-		-	-	42
Share option release	-	-	(31)		31	-	-
Exchange differences on translation
of overseas operations	-	-	-		-	(25)	(25)
Dividends paid	-	-	-		(396)	-	(396)
Balance at 30 June 2009	283	29	9		1,621	99	2,041
Profit for the 6 months ended 31	-	-	-		485	-	485
December 2009
Issue of share capital	-	1	-		-	-	1
Share option release	-	-	1		(1)	-	-
Exchange differences on translation
of overseas operations	-	-	-		-	7	7
Dividends paid	-	-	-		(198)	-	(198)
Balance at 31 December 2009	283	30	10		1,907	106	2,336
Profit for the 6 months ended 30	-	-	-		378	-	378
June 2010
Share option charge	-	-	2		-	-	2
Exchange differences on translation
of overseas operations	-	-	-		-	(14)	(14)
Dividends paid	-	-	-		(396)	-	(396)
Balance at 30 June 2010	283	30	12		1,889	92	2,306

NOTES TO THE INTERIM

NOTES TO THE UNAUDITED INTERIM REPORT

CONSOLIDATED STATEMENT OF

1.         Basis of Preparation

The financial information for the six months ended 30 June 2010 included in this interim report comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes.  This statement has been prepared in accordance with IAS 34 "Interim Financial Reporting".

This interim financial information is unaudited but has been reviewed by the auditors.  The financial information set out in this report does not constitute statutory accounts as defined by the Companies Act 2006.  The comparative figures for the year ended 31 December 2009 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 498(2) or (3) (accounting records or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations) of the Companies Act 2006.

The interim financial statements have been prepared on the basis of the accounting policies set out in the December 2009 financial statements of Dillistone Group Plc.

2.         Share Based Payments

The Company operates two share option schemes.  The fair value of the options granted under these schemes is recognised as an employee expense with a corresponding increase in equity.  The fair value is measured at grant date and spread over the period at the end of which the option holder may exercise the option.

The fair value of the options granted is measured using the Black-Scholes model, adjusted to take into account sub-optimal exercise factor and other flaws in Black-Scholes, and taking into account the terms and conditions upon which the incentives were granted.

3.         Segment reporting

Geographical segments
The following table provides an analysis of the Group's revenues by geographical market.
					Year ended
	6 Months ended 30 June				31 December
	2010		2009		2009
	£000		£000		£000
UKMEA	843		721		1,528
Europe	428		528		963
US	434		424		810
Asia Pacific	263		149		354
	1,968		1,822		3,655
Business Segment
The following table provides an analysis of the Group's revenues by business segment.
					Year ended
	6 Months ended 30 June				31 December
	2010		2009		2009
	£000		£000		£000
Recurring	1,213		1,204		2,344
Non recurring	755		618		1,311
	1,968		1,822		3,655
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.

Result
			Year ended
	6 Months ended 30 June		31 December
	2010	2009	2009
	£000	£000	£000
UKMEA	581	23	178
Europe	(169)	409	761
US	150	177	358
Asia Pacific	142	44	150
	704	653	1,447
Unallocated expenses	(193)	(187)	(373)
Result from operating activities	511	466	1,074

3.         Segment reporting (continued)

Total assets	As at	As at	As at
	30 June 2010	30 June 2009	31 December 2009
	£000	£000	£000
UKMEA	3,293	2,596	2,981
Europe	492	716	678
US	508	554	626
Asia Pacific	366	315	113
	4,659	4,181	4,398

4.         Tax

			Year ended
	6 Months ended 30 June		31 December
	2010	2009	2009
	£000	£000	£000
Current tax charge	86	119	150
Deferred tax charge	48	-	94
Total	134	119	244

5.         Dividends

A second Interim dividend of 7p per share in respect of the year ended 31 December 2009 was paid on 1 April 2010.  The total cost of this dividend was £396,581.

The Board has decided to pay an interim dividend of 3.5 pence per share (2009: 3.5p) on 5 November 2010 to holders on the register on 8 October 2010.  Shares will trade ex-dividend from 6 October 2010.

6.         Earnings per Share

			Year ended
	6 Months ended 30th June		31 December
	2010	2009	2009
Basic earnings per share
Profit attributable to ordinary shareholders	£378,019	£351,737	£836,869
Weighted average number of shares	5,665,441	5,480,739	5,572,440
Basic earnings per share (pence)	6.67	6.42	15.02
Diluted earnings per share
Profit attributable to ordinary shareholders	£378,019	£351,737	£836,869
Diluted weighted average number of shares	5,701,325	5,701,325	5,701,325
Diluted earnings per share (pence)	6.63	6.17	14.68

7.         Related party transactions

The Company has a related party relationship with its subsidiaries, its directors, and other employees of the Company with management responsibility.  There were no transactions with these parties during the period outside the usual course of business. 

Dividends paid to directors in the period totalled £0.169m.

There were no transactions with any other related parties.

 

END

 

 

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