Interim Results

RNS Number : 6327Z
Dillistone Group PLC
25 September 2009
 



                                                                                                                            25 September 2009


DILLISTONE GROUP PLC


INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2009



Dillistone Group Plc ('Dillistone' or 'the Group'), the AIM listed global supplier of executive recruitment software, announces interim results for the six months ended 30 June 2009.


Commenting on the results, Chairman Jim McLaughlin said:


'The Group enjoys a high proportion of recurring income which has supported the lower level of new systems sales so far this year and we have been diligent about controlling our cost base to ensure that we continue to meet market expectations.


'Operating profits, although lower than for the same period last year, exceeded those recorded in the second half of 2008 when the full impact of the recession was first reflected in the Group's financial performance.'


Highlights for the period:



6 Months ended 30 June 2009

6 Months 

ended 31 Dec 

2008

6 Months

ended 30 June 2008

  • Revenue

£1.822m

£2.092m

£2.516m

  • Operating profit

£0.466m

£0.440m

£0.932m

  • Profit before tax

£0.471m

£0.477m

£0.949m

  • Earnings per share (basic)

6.42p

6.18p

12.30p

  • Cash balances

£1.795m

£2.352m

£2.042m


  • Recurring revenues increased over 2008 by 12% to £1.203m;

  • Maintained interim dividend of 3.5p per share; 

  • Clients in over 55 countries world wide;

  • Resilient performance from US business;

  • Improving Order Book;


On current trading and prospects, Mr McLaughlin added:


'Having established some stability in a very difficult market, it does appear from recent orders received that the Group is likely to achieve its market expectations for the year as a whole and, with cash reserves, a strong balance sheet and increased recurring revenues, we are well positioned to take advantage of any upturn in global economic activity.'

  

Contacts:


Jim McLaughlin                        Dillistone Group Plc                 01934 710 509

Chairman & Finance Director


Emily Morgan                          Blomfield Corporate Finance    020 7489 4500

Director, Corporate Finance


Daniel Briggs                            Religare Hichens, Harrison       020 7382 7776


Tom Cooper/Paul Vann           Winningtons                              020 3043 4162

0797 122 1972



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 1,000 companies in more than 55 countries.


  

Chairman's Statement 



I said in my report for the year ended 31 December 2008 that the Group would see the impact of the recession in its 2009 results, and that has been the case. The year ended December 2008 saw a marked downturn in the second half when compared to the first half of that year. I am very pleased to be able to report that, as a result of strong recurring revenues, and in spite of a reduction in new system sales, operating profits for the 6 months ended 30 June 2009 exceeded those seen in the second half of 2008, when the full impact of the recession was first reflected in the financial performance of the Group.

 

Financial Performance


Revenue in the 6 months ended 30 June 2009 amounted to £1,821,940 (2008 - £2,515,902), a reduction of 28% when compared with the same period in 2008. Operating profits for the 6 months ended 30 June 2009 were £465,655 (2008 - £931,631) and profits before tax fell to £471,461, (2008 - £948,577).  


However, when compared to the second half of 2008, operating profits increased slightly from £439,770 to £465,655, despite a reduction in revenue from £2.092m in the second half of 2008 to £1.822m in the period under review. Administrative costs were reduced to £1.296m in the 6 months ended 30 June 2009, when compared to £1.465m in the first half of 2008, and £1.569m in the second half of that year.


Recurring revenues increased by 12% to £1.204m when compared to the £1.071m earned in the first half of 2008, and by 2.5% over the £1.175m earned in the second half of 2008. In the first half of 2009, recurring revenues comprised some 66% of total sales, when compared to just 43% in the first half of 2008, and 56% in the second half of 2008. There was a marked difference in performance between the UK and Asia businesses, both of which suffered reductions in sales of over 40% in total sales, and our European and USA businesses, which were much less adversely affected. To illustrate the point, the USA business recorded an increase in sales of 4% in the first half of this year as a result of recurring ASP revenues. The USA business now earns some 70% of its revenues from recurring sources.


Non recurring revenues, mainly arising from the sale of new systems, universally suffered throughout the Group as orders from both existing and new clients were more difficult to come by. However, since the start of the second half we have seen what appears to be a significant improvement in the market, and this has manifested itself in a number of valuable orders.


Regionally, the UK and Asia both suffered badly in their overall performance, with the UK recording a 95% reduction in profits, and Asia 69%, both when compared to the comparable period in 2008.  Our Europe business showed a small reduction in profitability of just 7%, whilst the USA increased its profits from operations by some 13% partly as a result of a concentration in its business towards the ASP model.

 

Cashflow in the 6 months ended 30 June 2009 showed an outflow of some £533,000 primarily as a result of dividends paid of £396,000 and investment in new product development of £235,000 and reflects the decision to commit resources to the further development of FILEFINDER. This latter cost compares to just £38,000 in the first half of 2008. At 30 June 2009 we had cash reserves of some £1.8m and a strong balance sheet, both of which stand the Group in good stead and leave us well positioned to take advantage of any upturn. 

 

Earnings per share amounted to 6.42p, compared with 12.30p for the corresponding period in 2008, and 6.18p per share for the second half of 2008. As announced in my annual report for 2008, the Board has decided to maintain the dividend for 2009 at the same level as was paid in respect of 2008, and accordingly, the Board has decided to pay a dividend of 3.5p per share (2008-3.5p) on 30 October 2009 to holders on the register on 9 October 2009. Shares will trade ex-dividend from 7 October 2009.


Prospects


Having established some stability in a very difficult market, it does appear from recent orders received that the Group is likely to achieve its market expectations for the year as a whole, and is well positioned to take advantage of any upturn in global economic activity. The level of recurring revenue across the Group, the cash reserves and strong balance sheet all place the Group as a leading contender to emerge well from the current recession.


Jim McLaughlin

25th September 2009

  




CONSOLIDATED INCOME STATEMENTS






Year Ended


6 Months ended 30 June

31 December


2009

2008

2008


Unaudited

Unaudited

Audited


£

£

£

Revenue

1,821,940

2,515,902 

4,608,197 

Cost of sales

 (60,434)

(119,473)

(202,997)

Gross profit

1,761,506

2,396,429 

4,405,200 

Administrative expenses

(1,295,851)

(1,464,798)

(3,033,799)





Result from operating activities

465,655 

931,631 

1,371,401 

Financial income

5,806 

16,946 

54,171 

Profit before tax

471,461

948,577 

1,425,572 





Tax expense

(119,724)

(284,573)

(427,672)

Profit for the period/year

351,737 

664,004 

997,900 





Earnings per share (pence)




Basic

6.42 

12.30 

18.48 

Diluted

6.17 

11.60 

17.50 





  

CONSOLIDATED BALANCE SHEETS





As at


As at 30 June

31 December


2009

2008

2008


Unaudited

Unaudited

Audited

ASSETS

£

£

£

Non-current assets




Intangible assets

911,540 

655,862 

707,396

Property plant & equipment

132,222 

147,877 

158,443


1,043,762 

803,739 

865,839

Current assets




Inventories

31,003 

21,506 

50,628

Trade and other receivables

1,311,385 

1,333,539 

1,306,748

Cash and cash equivalents

1,795,323 

2,041,885 

2,352,794


3,137,711 

3,396,930 

3,710,170

Total Assets

4,181,473 

4,200,669 

4,576,009









EQUITY AND LIABILITIES




Equity




Share capital

282,976 

270,000 

270,000

Share premium

28,947 

-

-

Share option reserve

9,254 

36,476 

40,427

Retained earnings

1,620,667 

1,489,027 

1,633,923

Translation reserve

99,084 

82,939 

123,749

Total Equity

2,040,928 

1,878,442 

2,068,099





Liabilities




Current liabilities




Trade and other payables

2,014,617 

1,982,768 

2,328,489

Current tax payable

122,928 

336,459 

176,421


2,137,545 

2,319,227 

2,504,910

Non-current liabilities




Deferred tax liability

3,000 

3,000 

3,000

Total Liabilities

2,140,545 

2,322,227

2,507,910





Total liabilities and equity

4,181,473 

4,200,669 

4,576,009

The financial statements were approved by the board of directors and authorised for issue on  25th September 2009.


They were signed on its behalf by:













J S Starr


J McLaughlin



CONSOLIDATED CASH FLOW STATEMENTS






Year ended


6 Months ended 30 June

31 December


2009

2008

2008


Unaudited

Unaudited

Audited


£

£

£

Operating Activities




Profit from operations

465,655 

931,631 

1,371,401 

Less taxation paid

(173,217)

(248,937)

(552,074)

Adjustment for




Depreciation

71,610 

52,938 

132,712 

Share option expense

-

9,698 

13,649 

Operating cash flows before movements




  in working capital

364,048 

745,330 

965,688 

Decrease / (Increase) in receivables

(4,637)

(49,349)

(22,558)

Decrease / (Increase) in inventories

19,625 

(19,172)

(48,294)

(Decrease) / Increase in payables

(313,872)

134,730 

480,451 





Net cash generated from operating activities

65,164 

811,539 

1,375,287 





Investing Activities




Interest received

5,806 

16,946 

54,171 

Purchases of property plant and equipment

(14,088)

(22,941)

(71,747)

Investment in product development

(235,445)

(38,400)

(131,579)





Net cash used in investing activities

(243,727)

(44,395)

(149,155)





Financing Activities




Proceeds from issue of share capital

41,923 

-

-

Dividends paid

(396,166)

(324,000)

(513,000)

Net cash used by financing activities

(354,243)

(324,000)

(513,000)









Net change in cash and cash equivalents

(532,806)

443,144 

713,132 

Cash and cash equivalents at beginning of the




   Period

2,352,794 

1,533,649 

1,533,649 





Effect of foreign exchange rate changes

(24,665)

65,092 

106,013 









Cash and cash equivalents at end of period

1,795,323 

2,041,885 

2,352,794 

  

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY















Share





Share

Share

option

Retained

Foreign

Total


capital

premium

reserve

earnings

exchange



£

£

£

£

£

£

Balance at 31 December 2007

270,000 

-

26,778 

1,149,023 

17,736 

1,463,537 








Profit for the 6 months ended 30 June 2008

-

-

-

664,004 

-

664,004 

 







Share option expense

-

-

9,698 

-

-

9,698 

Exchange differences on translation 







  of overseas operations

-

-

-

-

65,203 

65,203 

Dividends paid

-

-

-

(324,000)

-

(324,000)

Balance at 30 June 2008

270,000 

 -

36,476 

1,489,027 

82,939 

1,878,442 








Profit for the 6 months ended 31 

-

-

-

333,896 

-

333,896 

  December 2008







Share option expense

-

-

3,951 

-

-

3,951 

Exchange differences on translation 







  of overseas operations

-

-

-

-

40,810 

40,810 

Dividends paid

-

-

-

(189,000)

-

(189,000)

Balance at 31 December 2008

270,000 

 -

40,427 

1,633,923 

123,749 

2,068,099 








Profit for the 6 months ended 30 June 2009

-

-

-

351,737 

-

351,737 

 







Issue of share capital

12,976 

28,947 

-

-

-

41,923 

Share option release

-

-

(31,173)

31,173 

-

-

Exchange differences on translation







  of overseas operations

-

-

-

-

(24,665)

(24,665)

Dividends paid

-

-

-

(396,166)

-

(396,166)

Balance at 30 June 2009

282,976 

28,947 

9,254 

1,620,667 

99,084 

2,040,928 






  

 NOTES TO THE INTERIM REPORT


1.    Basis of Preparation


The financial information for the six months ended 30 June 2009 included in this interim report comprises the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement, 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 and their review opinion is included in this interim report. 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 2008 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 record 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 2008 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 sales by geographical market.








Year ended


6 Months ended 30 June

31 December


2009

2008

2008


£

£

£

UK

720,668 

1,285,633 

2,256,516 

Europe

527,791 

570,005 

1,008,035 

USA

423,936 

407,702 

832,527 

Asia Pacific

149,545 

252,562 

511,120 


1,821,940 

2,515,902 

4,608,198 





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


2009

2008

2008


£

£

£

Recurring

1,203,759 

1,071,388 

2,245,943 

Non Recurring

618,181 

1,444,514 

2,362,254 


1,821,940 

2,515,902 

4,608,197 





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


2009

2008

2008


£

£

£

UK

22,737 

456,307 

523,611 

Europe

408,923 

440,668 

729,318 

USA

176,841 

156,840 

324,377 

Asia Pacific

44,396 

141,860 

307,447 


652,897 

1,195,675 

1,884,753 

Unallocated Expenses

(187,242)

(264,044)

(513,352)

Profit from Operations

465,655 

931,631 

1,371,401 

 


Total assets

As at

As at

As at


  30 June 2009

 30 June

 2008

 31 December

 2008


£

£

£

UK

2,595,856 

2,792,493 

3,438,892 

Europe

716,558 

539,621 

338,609 

US

554,072 

684,360 

583,553 

Asia Pacific

314,987 

184,195 

214,955 


4,181,473 

4,200,669 

4,576,009 


4.    Dividends


A final dividend of 7p per share in respect of the year ended 31 December 2008 was paid on 9 June 2009. The total cost of this dividend was £396,166.


The Board has decided to pay an interim dividend of 3.5 pence per share (2008: 3.5p) on 30 October 2009 to holders on the register on 9 October 2009. Shares will trade ex-dividend from 7 October 2009.



 5.    Earnings per Share




Year ended


6 Months ended 30th June

31 December


2009

2008

2008

Basic earnings per share




Profit attributable to ordinary shareholders

£351,737 

£664,004 

£997,900 





Weighted average number of shares

5,480,739 

5,400,000 

5,400,000 





Basic earnings per share (pence)

6.42 

12.30 

18.48 





Diluted Earnings per share




Profit attributable to ordinary shareholders

£351,737 

£666,427 

£997,900 





Diluted weighted average number of shares

5,701,325 

5,745,449 

5,702,087 





Diluted earnings per share (pence)

6.17 

11.60 

17.50 


6.    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. There were no transactions with any other related parties.



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