Record Interim Results

RNS Number : 2954C

Dillistone Group PLC

01 September 2008

 



                                  1st September 2008

Dillistone Group Plc

Record Interim results - Delivering Reach, Quality & Quantity 

'Recruitment Software demand fuelled by Emerging Markets'

Dillistone Group Plc ('Dillistone' or 'the Group'), the AIM listed supplier of Recruitment Software is pleased to announce its record Interim results for the six months ended 30th June 2008. 

Highlights

                                     2008           2007          Change

Revenue                       £2.516m      £1.928m     +30%    

Profit Before Tax          £949k          £659k         +44%

Basic EPS                     12.3p           8.42p         +46%

Cash Balances              £2.042m      £1.534m*    +33%

Interim Dividend            3.5p             2.5p           +40%

• Recurring revenues as a %age of total revenue increased to 43%, 31% up on 2007 

• Group operating margins increased to 37% from 34% in H1 2007

• Sales growth by region; Asia - 47%, Europe - 36%, UK - 29%, USA - 21%

• Dillistone working with clients in over 55 countries worldwide

• Further take up of our 'Software as a Service' product ('SaaS')

• Cash inflow of £767k in period

• The Group is debt free

*Balance at 2007 year end (31/12/2007)

Commenting on the results, Jim McLaughlin, Chairman and Finance Director said:

'Despite recent uncertainties in global markets, Dillistone has achieved growth across all areas of our business; revenue, profit, cash, earnings per share, market share and geographic expansion. This represents our best performance to date.

'Coupled with this growth, we have improved our quality of earnings with recurring revenues now representing 43% of our headline sales. This is partly due to the increasing take up of our 'SaaS' product however for the most part as a consequence of the greater volume of support contracts directly linked to increased sales volume.  

'We are delighted with Dillistone's continued development and the performance at the half year.  Whilst we are optimistic about the full year result we are still mindful of the ongoing economic uncertainty.'

For further enquiries:

Jim McLaughlin, Chairman & Finance Director,  Dillistone Group Plc	01934 710 509
John Wakefield  Blue Oar Securities Plc	0117 933 0020
Tom Cooper  Winningtons Financial PR	0797 122 1972

Chairman's Statement 

I am very pleased to be able to report further significant progress in the 6 Months ended 30th June 2008, with record Interim results for the Group, and continued cash generation during the period.

Financial Performance

The financial results for the 6 Months ended 30th June show excellent growth in both sales and profitability. Overall sales increased by some 30% over the same period in 2007, underpinned by an increase of some 30% in non recurring revenues partly as a result of orders taken towards the end of 2007 which were implemented during the early part of 2008.  Recurring revenues, mainly support contracts, increased by some 31% over the same period in 2007, and now comprise 43% of total revenues.

Total turnover in the period increased by 30% to £2,515,902 (6 Months ended 30 June 2007 £1,927,943), and profits before tax increased by 44% to £948,577 (2007 - £658,853). Geographically, sales in all operations grew well, with Asia posting an impressive increase of 47% over the same period last year, Europe 36%, the UK 29% and the USA a more modest 21%. However the nature of the US operation is now benefiting significantly from our initiative to offer our 'SaaS' product in the region, and now some 57% of the revenues in this region are recurring, which has contributed to an increase in profits attributable of some 82%.

The UK, which now has a higher level of costs than the rest of the Group increased its revenues by 29%, and operating profits by 33%. Overall Group operating margins increased from 34% in the first half of 2007 to 37% in the current year.

Cashflow has continued to reflect the profitable performance of the business, and at the end of the period we held net cash balances of £2,041,885, compared with £1,533,649 at the year end. There was a cash inflow of over £767,000 in the period (excluding foreign exchange effects), after the payment of corporation tax of some £250,000 reflecting the Group's tight controls over its working capital. The Group continues to have no borrowings whatsoever, and from this inflow paid a dividend of £324,000 in May 2008.

Earnings per share amounted to 12.3p in the period (2007 - 8.42p) an increase of 46% over the same period in 2007, and the Board has decided to pay an interim dividend of 3.5p per share on 3rd October 2008 to holders on the register on 12th September 2008. The cost of this dividend will be £189,000 and will be met from the cash resources of the Group. Shares will trade ex-dividend from 10th September 2008. In the absence of unforeseen circumstances, a further dividend of some 6.5p per share is expected to be paid following the publication of the final accounts and approval of shareholders at the Annual General Meeting.

Prospects

We enjoyed a very high level of orders towards the end of 2007 and our strong performance in the first half of 2008 reflects this. Whilst there is general economic uncertainty, and I do not expect our performance in the second half to match that of the first half, I do however anticipate that trading for the full year will be somewhat ahead of current market expectations. Following the launch of our latest product release, FILEFINDER 8, we have increased our market share and have won some significant and highly regarded new clients. 

Jim McLaughlin

1st September 2008

CONSOLIDATED INCOME STATEMENT
			Year Ended
	6 Months ended 30 June		31 December
	2008	2007	2007
	£	£	£
Revenue	2,515,902	1,927,943	4,066,463
Cost of sales	(119,473)	(145,082)	(236,951)
Gross profit	2,396,429	1,782,861	3,829,512
Administrative expenses	(1,464,798)	(1,130,268)	(2,659,390)
Profit from operations	931,631	652,593	1,170,122
Investment income	16,946	6,260	26,091
Profit before tax	948,577	658,853	1,196,213
Tax expense	(284,573)	(204,244)	(391,838)
Profit for the period/year	664,004	454,609	804,375
Earnings per share (pence)
Basic	12.30	8.42	14.90
Diluted	11.60	7.96	14.05

CONSOLIDATED BALANCE SHEET
			As at
	As at 30 June		31 December
	2008	2007	2007
ASSETS	£	£	£
Non-current assets
Intangible assets	655,862	632,180	639,835
Property plant & equipment	147,877	171,708	155,390
	803,739	803,888	795,225
Current assets
Inventories	21,506	48,322	2,334
Trade and other receivables	1,333,539	1,118,048	1,284,190
Cash and cash equivalents	2,041,885	1,190,608	1,533,649
	3,396,930	2,356,978	2,820,173
Total Assets	4,200,669	3,160,866	3,615,398
EQUITY AND LIABILITIES
Equity
Share capital	270,000	270,000	270,000
Share option reserve	36,476	18,071	26,778
Retained earnings	1,489,027	934,257	1,149,023
Translation reserve	82,939	(17,478)	17,736
Total Equity	1,878,442	1,204,850	1,463,537
Liabilities
Current liabilities
Trade and other payables	1,982,768	1,473,904	1,848,038
Current tax payable	336,459	277,868	300,823
	2,319,227	1,751,772	2,148,861
Non-current liabilities
Deferred tax liability	3,000	7,328	3,000
Non-current tax payable	-	196,916	-
Total Liabilities	2,322,227	1,956,016	2,151,861
Total Liabilities and Equity	4,200,669	3,160,866	3,615,398

CONSOLIDATED CASH FLOW STATEMENT
			Year ended
	6 Months ended 30 June		31 December
	2008	2007	2007
	£	£	£
Operating Activities
Profit for the year / period	931,631	652,593	1,170,122
Less taxation paid	(248,937)	(204,244)	(319,590)
Adjustment for
Depreciation	52,938	61,079	126,606
Share option expense	9,698	4,755	13,462
Loss on disposal	-	-	657
Operating cash flows before movements in
working capital	745,330	514,183	991,257
(Increase) in receivables	(49,349)	(290,415)	(456,557)
(Increase) / decrease in inventories	(19,172)	(27,112)	18,876
Increase in payables	134,730	513,619	637,216
Net cash used in operating activities	811,539	710,275	1,190,792
Investing Activities
Interest received	16,946	6,260	26,091
Purchases of property plant and equipment	(22,941)	(18,549)	(35,653)
Investment in development costs	(38,400)	(34,671)	(75,088)
Net cash used in investing activities	(44,395)	(46,960)	(84,650)
Financing Activities
Dividends paid	(324,000)	-	(135,000)
Net cash used by financing activities	(324,000)	-	(135,000)
Net increase in cash and cash equivalents	443,144	663,315	971,142
Cash and cash equivalents at beginning of
year / period	1,533,649	538,591	538,591
Effect of foreign exchange rate changes	65,092	(11,298)	23,916
Cash and cash equivalents at end of year /
period	2,041,885	1,190,608	1,533,649

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Share	Share option	Retained	Foreign	Total
	capital	reserve	earnings	exchange
	£	£	£	£	£
Balance at 31 December 2006	270,000	13,316	479,648	(6,180)	756,784
Profit for the 6 months ended 30 June 2007	-	-	454,609	-	454,609
Share option expense	-	4,755	-	-	4,755
Exchange differences on translation of
overseas operations	-	-	-	(11,298)	(11,298)
Balance at 30 June 2007	270,000	18,071	934,257	(17,478)	1,204,850
Profit for the 6 months ended 31 December 2007	-	-	349,766	-	349,766
Share option expense	-	8,707	-	-	8,707
Exchange differences on translation of
overseas operations	-	-	-	35,214	35,214
Dividends paid	-	-	(135,000)	-	(135,000)
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

  NOTES TO THE INTERIM

NOTES TO THE INTERIM REPORT

CONSOLIDATED STATEMENT OF 

1.    Basis of Preparation

The financial information for the six months ended 30 June 2008 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 on pages 10 - 12. 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 1985. Financial information for the year ended 31 December 2007 included herein is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2) or section 237(3) of the Companies Act 1985.

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.    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
	2008	2007	2007
	£	£	£
UK	1,285,633	999,395	2,180,172
Europe	570,005	420,036	845,745
USA	407,702	336,158	633,597
Asia Pacific	252,562	172,354	406,949
	2,515,902	1,927,943	4,066,463
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
	2008	2007	2007
	£	£	£
Recurring	1,071,388	816,914	1,665,870
Non Recurring	1,444,514	1,111,029	2,400,593
	2,515,902	1,927,943	4,066,463
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
	2008	2007	2007
	£	£	£
UK	456,307	343,366	536,428
Europe	440,668	308,427	656,827
USA	156,840	86,322	185,339
Asia Pacific	141,860	99,443	258,064
	1,195,675	837,558	1,636,658
Unallocated Expenses	(264,044)	(184,965)	(466,536)
Profit from Operations	931,631	652,593	1,170,122

4.    Dividends

A dividend of 3.5 pence per share, totalling £189,000 has been approved by the Board, and will be paid on 3rd October 2008 to holders on the register on 12th September 2008.

 5.    Earnings per Share

			Year ended
	6 Months ended 30th June		31 December
	2008	2007	2007
Basic earnings per share
Profit attributable to ordinary shareholders	£664,004	£454,609	£804,375
Weighted average number of shares	5,400,000	5,400,000	5,400,000
Basic earnings per share (pence)	12.30	8.42	14.90
Diluted Earnings per share
Profit attributable to ordinary shareholders	£666,427	£455,359	£804,385
Diluted weighted average number of shares	5,745,449	5,723,876	5,726,811
Diluted earnings per share (pence)	11.60	7.96	14.05

 

END

 

 

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