Interim Results

GB Group PLC 18 November 2004 Embargoed until 07.00 18 November 2004 GB GROUP PLC ('GB' or the 'Group') Interim Results for the Six Months Ended 30 September 2004 Highlights â€¢ The Group has made good progress during the first half of the year. â€¢ The Group's new business, URU(TM), generated sales of Â£150,000 in the period (2003: nil). The investment in marketing and developing the service (net of sales) was Â£346,000 (2003: Â£142,000). The number of URU(TM) customers has increased from 6 (as at the date of the AGM on 22 July 2004) to 25. â€¢ The Group's existing businesses generated like-for-like turnover marginally ahead of the same period last year. This is after adjusting for sales of third party software licences which have been discontinued and which generated turnover in the first half last year of Â£497,000). Overall, Group turnover for the period was Â£5.2 million (2003: Â£5.5 million). â€¢ The operating loss for the period was Â£366,000 (2003: Â£337,000) after taking account of the increased investment in URU(TM). The Group's profitability continues to be weighted towards the second half of the financial year due to the timing of contract renewals. â€¢ Net cash balances at 30 September 2004 were Â£6.3 million (2003: Â£6.6 million) providing the Group with the opportunity to increase investment in URU(TM) if required. John Walker-Haworth, Chairman, commented: 'The Group has continued to make significant investment in its new business initiative in the first half and the benefits derived from this are reflected in the progress made in winning new customers for the URU(TM) service. Our existing businesses are competing effectively and efficiently. Whilst the impact of increased competition on these businesses is difficult to predict over the course of the full year, it remains our aim to fund new development in the current financial year, in particular URU(TM), largely if not entirely from the cash flow from these businesses. Looking beyond the full year, the Group's cash balances provide the ability to step up investment in URU(TM) if this is required to accelerate progress. As in previous years, profitability associated with the Group's existing businesses continues to be weighted towards the second half as a result of the timing of contracts originally signed in the second half of previous years and which continue to be renewed. This makes it difficult to comment at this stage on prospects for the year as a whole. But it is both an exciting and challenging time for GB, and we are encouraged by our progress, particularly the gathering momentum of URU(TM).' - Ends - For further information, please contact: GB Group plc Richard Law, Chief Executive 01244 657333 Mona Navin-Mealey, Finance Director Weber Shandwick Square Mile 020 7067 0700 Richard Hews Sarah Richardson Website www.gb.co.uk Notes to Editors About GB Group plc GB Group plc provides a range of products and services to enable organisations to capitalise on one of their greatest assets - customer data. The Company has expertise across a range of sectors and is able to transform customer data into valuable information, enabling clients to make better, more informed decisions. The development of innovative software and services, through to the provision of the UK's most comprehensive consumer business databases - The National Register (R) and the National Authentication Register - positions GB Group as a widely acknowledged industry leader in its specialist markets. GB Group plc has three business areas: â€¢ The DataIntegrity business helps companies capture and maintain accurate customer contact data, an essential foundation for any profitable customer relationship. â€¢ The DataSolutions business empowers companies to consolidate and analyse customer data from various sources, enabling them to make better, more informed decisions. â€¢ The DataAuthentication business helps businesses validate personal identity information and provides anti-fraud solutions to fight crime. Established since 1989, GB's core competencies combined with industry sector knowledge have enabled the company to deliver significant value to organisations such as Standard Life, Scottish Power and Laura Ashley in helping them derive maximum value from their customer data and sustain real advantage over their competition. GB Group is supported by its key relationships with major organisations with whom it partners on major initiatives (an example being British Telecom), together with a team of highly talented and motivated staff successfully delivering business solutions. GB Group plc is listed on the London Stock Exchange (www.gb.co.uk). About URU(TM) BT and GB Group have jointly developed the service, URU(TM), to help companies protect themselves from the growing problem of identity theft and fraud, which is estimated by the Cabinet Office to cost the UK economy over Â£1.3 billion per annum. URU(TM) enables companies subscribing to the service to make an instant decision whether to accept the identity claimed by any given individual and confirm their age in seconds. URU(TM) works by cross checking personal information provided by an individual at the point of acquisition, against a vast range of up-to-date UK and International population datasources including Passport, Driving Licence, Utility Bill and Voters Roll to confirm that an individuals is who they claim to be, live where they claim to live and meet certain minimum legal age requirements. No personal data is disclosed by the reference databases and as a result URU(TM) is compliant with the Data Protection Act. URU(TM) also provides a valuable audit trail demonstrating that the necessary checks have taken place, thereby helping companies comply with legislation, including the 2nd European Money Laundering Directive, Proceeds of Crime Act and Minimum Legal Age requirements of certain industry sectors. The addition of data from CallCredit also enables users of URU(TM) to incorporate credit reference data. CHAIRMAN'S HALF YEAR STATEMENT Overview The Group has made good progress during the first half of the year. GB's new business initiative URU(TM), developed jointly with BT and which both parties are now marketing, has made significant advances in winning new customers. Investment in URU(TM) during the period was Â£204,000 higher than the same period last year. In the Group's existing businesses, like-for-like turnover (adjusting for sales of third party software licences which were discontinued at the start of the current financial year) was marginally higher than the same period last year. Competition increased in the markets served by GB's existing businesses, although the effects of this were offset by efficiency savings leaving the operating result for the existing businesses Â£175,000 better than for the same period last year. Overall, therefore, the Group's loss on ordinary activities for the first half was in line with that of last year. New Business The continuing growth of the URU(TM) service, launched in January 2004, has been encouraging. Revenue from customers and trialists has increased to Â£150,000 in the period. This is compared to Â£6,000 in the preceeding three months from the launch of URU(TM) on 1st January 2004 to 31 March 2004. GB's investment, net of revenue, in developing and marketing URU(TM) was Â£346,000, an increase of Â£204,000 compared to the same period last year. As I outlined in my statement at the AGM in July, the strategy to develop URU(TM) is initially to win reference customers across the key target sectors and then to expand sales within those sectors. This strategy is working well and since July the number of customers contracted to URU(TM) has increased from six to twenty five. The first application for URU(TM) was the prevention of identity theft and anti-money laundering. Further applications are being developed by GB as the market for the authentication of individuals expands. For example, it is now successfully assisting businesses in the online gaming sector fulfil their obligations to verify the age, as well as the identity, of internet and telephone account customers. The challenge of authenticating the identity and age of individuals is a growing problem not just in the UK but globally and in this context GB entered into an agreement with Aristotle Inc. of the USA in October 2004 to gain access to international identity and age verification data for inclusion in URU(TM). GB's Joint Collaboration Agreement with BT to develop and market URU(TM) and its derivatives continues to operate well, and BT's role of providing its web services infrastructure as well as its technical and commercial expertise has been important in the considerable progress achieved to date. In summary, progress has been positive in the first half of the year. We remain aware, however, that the URU(TM) proposition and the markets into which it is deployed are in the early stages of their development and further investment and growth will be required to take the business to profitability. The early indications remain encouraging. Existing Businesses Despite increased competition, our existing DataIntegrity and DataSolutions businesses generated like-for-like turnover in the first half of the year marginally ahead of the same period last year and operating profitability Â£175,000 ahead of the same period last year. Following on from the decision taken in March 2004 to withdraw from the sale of third party software licences, which generated turnover in the first half of last year of Â£497,000, the DataSolutions division has benefited from greater focus and a better quality of business giving higher margins and an increased proportion of repeatable future revenues. The DataIntegrity division, which provides software and services to assist clients to capture, enhance and maintain accurate customer data, continues to generate high quality repeatable revenue streams with around half of its revenue coming from the renewal of annual contracts. The market in which this business operates is maturing and accordingly continues to be competitive. We have, therefore, continued to implement efficiencies and in October, GB's two locations were merged and a number of functions were consolidated resulting in cost savings to the Group. One-off exceptional costs associated with these actions are expected to be approximately Â£300,000 and will be recognised in the second half of the year; these costs are expected to be matched by the savings in the second half, and the overall impact on earnings of merging locations will, therefore, be broadly neutral in the year as a whole. Prospects The Group has continued to make significant investment in its new business initiative in the first half and the benefits derived from this are reflected in the progress made in winning new customers for the URU(TM) service. Our existing businesses are competing effectively and efficiently. Whilst the impact of increased competition on these businesses is difficult to predict over the course of the full year, it remains our aim to fund new development in the current financial year, in particular URU(TM), largely if not entirely from the cash flow from these businesses. Looking beyond the full year, the Group's cash balances provide the ability to step up investment in URU(TM) if this is required to accelerate progress. As in previous years, profitability associated with the Group's existing businesses continues to be weighted towards the second half as a result of the timing of contracts originally signed in the second half of previous years and which continue to be renewed. This makes it difficult to comment at this stage on prospects for the year as a whole. But it is both an exciting and challenging time for GB, and we are encouraged by our progress, particularly the gathering momentum of URU(TM). John Walker-Haworth Chairman 18 November 2004 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 30 September 2004 Unaudited Unaudited Audited 6 Months to 6 Months to Year to 30 September 30 September 31 March 2004 2003 2004 Â£'000 Â£'000 Â£'000 Note Turnover 3 5,232 5,537 11,916 Cost of sales 3 (2,194) (2,530) (5,224) -------- -------- -------- Gross profit 3 3,038 3,007 6,692 Other operating expenses (excluding goodwill amortisation and exceptional items) 3 (3,140) (3,080) (6,239) Goodwill amortisation 3 (264) (264) (576) Exceptional items 3 - - (89) -------- -------- -------- Other operating expenses (3,404) (3,344) (6,904) Operating loss before exceptional items (366) (337) (123) Exceptional items - - (89) Operating loss after exceptional items 3 (366) (337) (212) Share of operating (loss)/profit in associate - (9) (10) -------- -------- -------- Total operating loss : Group and share of associate (366) (346) (222) Interest receivable less payable 135 104 212 -------- -------- -------- Loss on ordinary activities before taxation (231) (242) (10) Taxation 58 (32) (4) -------- -------- -------- Loss on ordinary activities after taxation (173) (274) (14) Dividend - - (398) -------- -------- -------- Amount transferred from reserves (173) (274) (412) -------- -------- -------- Loss per 2.5p ordinary share (pence) - basic 6 (0.2) (0.3) 0.0 -------- -------- -------- Loss per 2.5p ordinary share (pence) - diluted 6 (0.2) (0.3) 0.0 -------- -------- -------- Adjusted profit per 2.5p ordinary share (pence) - before goodwill 6 0.1 0.0 0.7 -------- -------- -------- Dividend per share (pence) - - 0.5 -------- -------- -------- CONSOLIDATED BALANCE SHEET As at 30 September 2004 Unaudited Unaudited Audited 30 September 30 September 31 March 2004 2003 2004 Â£'000 Â£'000 Â£'000 Fixed assets Intangible assets 6,240 6,815 6,504 Tangible assets 391 438 410 Investments - 13 - --------- --------- -------- 6,631 7,266 6,914 --------- --------- -------- Current assets Stocks 3 5 18 Debtors 2,071 2,450 2,724 Cash and short term deposits 6,283 6,588 6,859 --------- --------- -------- 8,357 9,043 9,601 Creditors : amounts falling due within one year (1,781) (2,695) (3,113) --------- --------- -------- Net current assets 6,576 6,348 6,488 --------- --------- -------- Total assets less current liabilities 13,207 13,614 13,402 Creditors : amounts due in more than one year - - - Provisions for liabilities and charges (105) (206) (132) --------- --------- -------- 13,102 13,408 13,270 --------- --------- -------- Capital and reserves Called up share capital 1,990 1,989 1,989 Share premium account 3,137 3,133 3,133 Merger reserve 6,575 6,575 6,575 Capital redemption reserve 3 3 3 Profit and loss account 1,397 1,708 1,570 --------- --------- -------- 13,102 13,408 13,270 --------- --------- -------- CONSOLIDATED CASHFLOW STATEMENT For the six months ended 30 September 2004 Note Unaudited Unaudited Audited 6 Months to 6 Months to Year to 30 September 30 September 31 March 2004 2003 2004 Â£'000 Â£'000 Â£'000 Net cash (outflow)/inflow from operating activities 5(a) (220) 186 440 --------- ---------- --------- Returns on investments and servicing of finance Interest received 135 104 212 --------- ---------- --------- Taxation Corporation tax paid - - (4) --------- ---------- --------- Capital expenditure and financial investment Payments to acquire tangible fixed assets (98) (54) (153) --------- ---------- --------- Acquisitions and disposals Disposal of associate - - 12 --------- ---------- --------- Equity dividends paid (398) (398) (398) --------- ---------- --------- Net Cash (outflow)/inflow (581) (162) 109 --------- ---------- --------- Management of liquid resources Cash deposited to/(withdrawn from) short term deposits 124 (394) (291) --------- ---------- --------- Financing Proceeds from issue of ordinary shares (5) (2) (2) --------- ---------- --------- (Decrease)/increase in cash 5(b) (700) 234 402 --------- ---------- --------- (581) (162) 109 --------- ---------- --------- NOTES TO THE INTERIM FINANCIAL STATEMENTS 1. BASIS OF PREPARATION The interim financial statements are prepared on the basis of the accounting policies set out in the annual report and accounts for the year ended 31 March 2004. 2. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory accounts for the financial year ended 31 March 2004. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. 3. SEGMENTAL INFORMATION Turnover and Operating Profit All of the turnover, profits and operating assets relate to the Group's principal business activities, being the development, sale and support of business application software, the provision of marketing database services and the licensing of technology. Turnover is stated net of value added tax. Turnover and operating profit arise principally in the United Kingdom. 4. ANALYSIS OF BUSINESSES - TURNOVER & OPERATING LOSS Unaudited Audited 6 Months to Year to Unaudited 6 months ended 30 September 31 March 30 September 2004 2003 2004 Existing New Total Total Total Business Business Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 (a) Turnover 5,082 150 5,232 5,537 11,916 ------- ------- ------ --------- -------- (b) Operating loss Existing businesses (20) 0 (20) (195) 290 New business 0 (346) (346) (142) (413) Exceptional items 0 0 0 0 (89) ------- ------- ------ --------- -------- (20) (346) (366) (337) (212) ------- ------- ------ --------- -------- 5. NOTES TO THE STATEMENT OF CASH FLOWS a) Reconciliation of operating loss to operating cash flows Unaudited Unaudited Audited 6 Months to 6 Months to Year to 30 September 30 September 31 March 2004 2003 2004 Â£'000 Â£'000 Â£'000 Operating loss (366) (337) (212) Depreciation 117 132 257 Goodwill amortisation 264 264 576 Decrease/(increase) in stocks 15 (3) (16) (Decrease)/Increase in provisions (27) 15 (58) Decrease in debtors 653 494 220 Decrease in creditors (876) (379) (327) ----------- ---------- ----------- (220) 186 440 ----------- ---------- ----------- b) Reconciliation of net cashflow to movement in net funds Unaudited Unaudited Audited 6 Months to 6 Months to Year to 30 September 30 September 31 March 2004 2003 2004 Â£'000 Â£'000 Â£'000 At the beginning of the period 6,859 6,748 6,748 Increase/(decrease) in cash (700) 234 402 Movement in short term deposits with banks 124 (394) (291) ---------- --------- ----------- At the end of the period 6,283 6,588 6,859 ---------- --------- ----------- c) Analysis of net funds At 31 March Cashflow At 30 September 2004 Six Months 2004 Â£'000 Â£'000 Â£'000 Cash 1,327 (700) 627 Short term deposits 5,532 124 5,656 ---------- --------- ----------- 6,859 (576) 6,283 ---------- --------- ----------- 6. EARNINGS PER SHARE Earnings per share has been calculated in accordance with Financial Reporting Standard 14 by reference to the following: Unaudited 6 Months Unaudited 6 Months Audited Year to to 30 September to 30 September 31 March 2004 2003 2004 Pence Â£'000 Pence Â£'000 Pence Â£'000 (Loss)/profit after taxation (0.2) (173) (0.3) (274) 0.0 (14) Add goodwill amortisation 0.3 264 0.3 264 0.7 576 ------- ------- ------- ------- ------- -------- Adjusted profit/(loss) after taxation 0.1 91 0.0 (10) 0.7 562 ------- ------- ------- ------- ------- -------- Basic weighted average number of shares in issue 79,624,238 79,579,898 79,585,369 Diluted effect of share options - - - ---------- ---------- ---------- Diluted weighted average number of shares in issue 79,624,238 79,579,898 79,585,369 ---------- ---------- ---------- Diluted earnings per share (0.2) (0.3) 0.0 ------- ------- -------- The loss for the period and the weighted average number of ordinary shares for calculating the diluted earnings per share for the period to 30 September 2004 is identical to those used for the basic earnings per share. This is because the outstanding share options would have the effect of reducing the loss per ordinary share and would therefore not be dilutive under the terms of Financial Reporting Standard No. 14 (FRS 14). INDEPENDENT REVIEW REPORT TO GB GROUP PLC Introduction We have been instructed by the company to review the financial information for the six months ended 30 September 2004 which comprises the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement and the related notes 1 to 6. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2004. Ernst & Young LLP Manchester 18 November 2004 This information is provided by RNS The company news service from the London Stock Exchange

Companies

GB Group (GBG)

Thursday, 21st November 2024

COMPANIES COVERED:

HLMA JD. ITH

JD Sports tanks after management tighten profit guidance towards the lower end of expectations, Halma finds support from strong earnings and capital return commitment cheers shareholders in Ithica Energy.

Full Archive

UK 100

Latest directors dealings

3 hours ago Alphawave IP Group
4 hours ago WH Smith
4 hours ago Staffline Group
5 hours ago Manchester & London Investment Trust
5 hours ago Associated British Foods

All directors dealings today