3rd Quarter & 9 Mths Results

InterX PLC 19 June 2000 InterX plc Results for the 39 weeks to 29 April 2000 HIGHLIGHTS - Philip Crawford appointed as Chief Executive - effective August 2000 - Integration of Cromwell Media successfully completed - re-named InterX Technology - Joint venture with Reed Business Information - ComputerWeekly.com - IT product information deal with AOL Bertlesman Online through ComputerWeekly.com - Disposal of Ideal Hardware in advanced negotiations - Pre-tax losses £0.4m, in line with expectations - Cash, excluding Ideal, £40m Richard Jewson, Chairman of InterX plc, commented: 'The appointment of Philip Crawford as Chief Executive is a critical step in the transition of the Group into a global software technology business. Philip is one of Europe's most prominent information technology executives and brings with him a wealth of contacts and experience. The disposal of Ideal Hardware, the original IT distribution business, is approaching completion and Cromwell Media, recently re-named InterX Technology, has been successfully integrated into the Group. We have also announced a strategic joint venture with Reed Business Information. This deal is a very visible demonstration of the power of our technology and our strategy of identifying leveragable investment opportunities.' For further information, please contact: InterX plc 020 7769 9200 James Wickes jwickes@interx.co.uk Simon Barker sbarker@interx.co.uk Simon Miesegaes smiesegaes@interx.co.uk Citigate Dewe Rogerson 020 7638 9571 Andy Cornelius Freida Davidson INTERX PLC THIRD QUARTER RESULTS FOR THE 39 WEEKS TO 29 APRIL 2000 Chairman's Statement Introduction I am pleased to be announcing this set of quarterly results - the first since InterX plc ('InterX' or 'the Group') completed its merger with Cromwell Media Limited ('Cromwell') on 7 April 2000. In the circular released pursuant to the merger, (the 'Circular'), the Board outlined the continuing steps that it would be taking in order to complete the transition of the Group from an IT hardware distributor, trading as Ideal Hardware plc ('Ideal'), into a global software technology business. As such the Group is now focusing exclusively on investing in the infrastructure required to maximise its future technology sales. This will be achieved by developing the best products, delivering the highest quality services to support our business partners, entering into strategic relationships and identifying leveragable investment opportunities. Your Board has continued to make significant progress in preparing the Group for its exciting future. To increase clarity of strategy, on 25 May 2000 Cromwell changed its name to InterX Technology Limited ('InterX Technology'). It is now time to augment the skills available at Board level to accelerate the delivery of the strategy. Appointment of Philip Crawford as Chief Executive I am therefore delighted to announce that Philip Crawford, has agreed to accept the position of Chief Executive of the Group as from 1 August 2000. Philip is currently a non-executive director of InterX and Chairman of InterX Technology, where he has been instrumental in recruiting its senior management team. Philip, who is 48, was previously President of EDS International, the global IT services group. While there, he was specifically responsible for the company's drive to become a leading international e-business consultancy. Prior to joining EDS, Philip was Senior Vice President, UK and Ireland, for Oracle Corporation. Under his leadership, Oracle UK grew sales from some $270 million to almost $1 billion. Upon his appointment, James Wickes, the current Chief Executive, founder of Ideal and architect of this fundamental change in direction of the Group, will move to the position of Group Marketing Director. Results As a result of the significant investments being made, and in line with expectations, operating losses for the Group, before exceptional items, for the 39 weeks to 29 April 2000 were £0.4m. Operating losses for the Group, after exceptional items, for the 39 weeks to 29 April 2000 were £4.0m. Exceptional items include one month's amortisation of goodwill, some £3.4m, following the acquisition of the shares not held by the Group in InterX Technology Limited. Turnover for the 39 weeks to 29 April 2000 amounted to £293m, of which some £292m relates to Ideal. Pre-tax losses for the Group, after exceptional items, were £4.9m. The loss per share, before exceptional items, was 5.81p. The loss per share, after exceptional items, was 21.74p. As reported previously, the Directors do not expect the Company to pay dividends for the immediate future. The Group's balance sheet remains strong. Cash, excluding Ideal's working capital facilities, was £40m. InterX Technology InterX Technology represents the core of our future strategy. Its current and future products, already in development, are well suited to the rapidly growing global market for robust, reliable, scalable and flexible online-services software. Current customers for BladeRunner, its interactive web application platform technology, include Royal and Sun Alliance, Cambridge University Press and, through the ComputerWeekly.com Limited joint venture, Reed Business Information, part of the Reed Elsevier group. Recruitment and Skilled Resources Over the last few months we have continued to strengthen the management team at InterX Technology and we anticipate the imminent announcement of further key board appointments. The company's recruitment and training programmes have been highly effective during the period and, as of today, we now have 80 fully or partially trained BladeRunner developers either in the employ of the company or at our integrator partners. Sales Prospects In the Circular I referred to the fact that the market for BladeRunner is not demand constrained. I am pleased to report that these exciting market conditions persist and there is strong demand from our targeted markets of publishing and financial services. Partners and Strategic Relationships We reported in our EGM statement on 6 April 2000 that InterX Technology had entered into partnership agreements with two leading UK e-business solutions company. There is significant activity in this area currently and I anticipate being able to report additional agreements at the time of our full year results. Performance against Previously Stated Milestones In the Circular we stated that we would aim to achieve the following in the period reported: - The gaining of 2 new customers for our technology, and - The establishment and development of a suitable network of qualified system integrators - more specifically, two such partners before the end of this financial year. I am pleased to report that both these milestones have been achieved and that we are on course to achieve our stated milestones for the current quarter. Electronic Product Intelligence ('E-PI') On 11 May 2000, our subsidiary, IT Network Limited, changed its name to E-PI in accordance with the terms of the joint venture between InterX and Reed Business Information Limited ('RBI') and in order to reflect more accurately its business model of developing intelligent product information applications, based on our technologies, and other related services. InterX has a 25% stake in this new venture which is called ComputerWeekly.com Limited ('ComputerWeekly.com'). The new company combines E-PI's www.itnetwork.com web site, product information and technical skills with RBI's on-line IT titles, including www.computerweekly.com, and editorial skill. ComputerWeekly.com has entered into a significant service agreement with E-PI for its technology and services. ComputerWeekly.com is the first leveragable investment by InterX in support of our Group strategy. It provides, not only incremental revenue and capital value appreciation, but also a significant reference site and showcase for our unique technology. The strategic importance of this investment is clearly shown in that through ComputerWeekly.com, InterX is now delivering 'AOL Product Finder', an IT product information resource, to AOL Bertlesman Online, the UK subsidiary of AOL Europe, one of Europe's leading multinational internet, online e-commerce service providers. I expect that the outstanding key milestones documented in the Circular, relating to market intelligence reports and the establishment of a US presence, will also be achieved, while, and as a direct result of the joint venture, the anticipated sales and marketing investment will be significantly reduced. We are continuing to invest in the development of E-PI's product information systems and we continue to look for international partners in our efforts to globalise these systems. Ideal Hardware plc On 25 April 2000 we announced that InterX had signed a letter of intent with Bell Microproducts Inc. ('Bell Microproducts') for the sale to Bell Microproducts of Ideal, InterX's original IT distribution business, subject to due diligence and the negotiation of a definitive sale agreement. These negotiations are continuing and I anticipate that we will be able to conclude them, subject to our shareholders' approval, in the near future. I, and the rest of the Board, would like to extend our gratitude to all the directors and employees of Ideal, most notably its Chief Executive Ian French, who have continued to grow the business of Ideal, in terms of turnover and market share, despite the distraction of this transaction and the current, well-publicised, difficult market conditions, which continue to significantly impact its margins and profitability. Prospects I am excited for the prospects of the Group. Not only do we have the right technology, at the right time for the right market, but we have a team of management and staff who continue to demonstrate a total willingness to adapt and accept change for the benefit of the Group. With the appointment of Philip Crawford as Chief Executive, the Group will be led by one of Europe's best known information technology executives with the market expertise and industry visibility required to penetrate international markets. It is this potential, secured by our financial strength and long experience of strict financial control, that leads me to view the future with confidence. Richard Jewson Chairman 19 June 2000 INTERX PLC Group Profit and Loss Account 39 wks to 27 wks to Yr ended 29 Apr 5 Feb 30 Jul 2000 2000 1999 (unaudited)(unaudited)(audited) Notes £'000 £'000 £'000 Turnover 2 293,321 200,546 318,056 Cost of sales (271,230) (185,785) (288,512) ---- ---- ---- Gross profit 2 22,091 14,761 29,544 Other income 1,283 994 - Overheads (23,800) (14,691) (22,684) Exceptional items Amortisation of goodwill (3,397) - - National Insurance on share options (208) - - Restructuring costs - Group - - (160) Restructuring costs - Ideal - - (700) IT Network development - - (3,688) ---- ---- ---- (27,405) (14,691) (27,232) ---- ---- ---- Operating (loss)/profit 2 (4,031) 1,064 2,312 Share of results of associated undertaking (198) (185) 42 ---- ---- ---- (Loss)/profit on ordinary activities before interest (4,229) 879 2,354 Net interest payable (691) (428) (264) ---- ---- ---- (Loss)/profit on ordinary activities before taxation (4,920) 451 2,090 Taxation on (loss)/profit on ordinary activities 4 - (184) (761) ---- ---- ---- (Loss)/profit on ordinary activities after taxation (4,920) 267 1,329 Dividends - - (2,967) ---- ---- ---- (Loss)/ retained profit for period 6 (4,920) 267 (1,638) ====== ====== ====== (Loss)/ Earnings per share (basic) 5 (21.74)p 1.26p 6.27p Less : exceptional items (net of taxation) Amortisation of goodwill 15.01p -p -p National Insurance on share options 0.92p -p -p Restructuring costs - Group -p -p 0.75p Restructuring costs - Ideal -p -p 2.28p IT Network development -p -p 12.01p ---- ---- ---- Earnings per share (pre exceptionals) (5.81)p 1.26p 21.31p ---- ---- ---- (Loss)/ Earnings per share - fully diluted (21.74)p 1.26p 6.24p Earnings per share - fully diluted (pre exceptionals) (5.81)p 1.26p 21.21p Interim ordinary dividend -p -p 6.00p Final ordinary dividend -p -p 8.00p There were no recognised gains or losses in any of the above periods other than those shown in the profit and loss account. Turnover and operating profit were derived from continuing activities. There were no discontinued activities in the period. INTERX PLC Group Balance Sheet At 29 Apr At 5 Feb At 30 Jul 2000 2000 1999 (unaudited)(unaudited)(audited) Notes £'000 £'000 £'000 Fixed assets Goodwill 200,434 - - Other intangible assets 151 - - ---- ---- ---- Intangible assets 200,585 - - Tangible assets 20,286 19,054 19,431 Investment in associated undertaking - 2,051 120 ---- ---- ---- 220,871 21,105 19,551 Current Assets Stocks 25,469 16,347 9,280 Debtors 69,693 49,210 52,324 Cash at bank and in hand 22,908 - 8,241 ---- ---- ---- 118,070 65,557 69,845 Creditors: amounts falling due within one year (77,130) (63,527) (67,581) ---- ---- ---- Net Current Assets 40,940 2,030 2,264 ---- ---- ---- Total assets less current liabilities 261,811 23,135 21,815 Creditors: amounts falling due after more than one year (248) (7,217) (6,387) Provision for liabilities and charges (130) (130) (130) ---- ---- ---- 261,433 15,788 15,298 ====== ====== ====== Capital and Reserves 6 Called up share capital (including shares to be issued) 1,740 1,065 1,063 Share premium account 54,975 2,884 2,663 Capital redemption reserve 31 31 31 Other reserve 198,066 - - Profit and loss account 6,621 11,808 11,541 ---- ---- ---- Equity Shareholders' Funds 261,433 15,788 15,298 ====== ====== ====== INTERX PLC Group Cash Flow Statement 39 wks to 27 wks to Yr ended 29 Apr 5 Feb 30 Jul 2000 2000 1999 (unaudited)(unaudited)(audited) Notes £'000 £'000 £'000 Cash (outflow)/ inflow from operating activities 7 (19,195) (6,021) 1,056 ---- ---- ---- Returns on investments and servicing of finance Interest received 270 59 337 Interest paid (1,178) (505) (522) ---- ---- ---- Net cash outflow from returns on investments and servicing of finance (908) (446) (185) ---- ---- ---- Taxation (430) (226) (2,787) ---- ---- ---- Capital expenditure Purchase of tangible fixed assets (3,850) (1,764) (6,853) Sale of tangible fixed assets 175 6 4,800 ---- ---- ---- Net cash outflow for capital expenditure (3,675) (1,758) (2,053) ---- ---- ---- Acquisitions Investment in subsidiary undertaking (4,001) (2,100) - ---- ---- ---- Net cash outflow from acquisitions (4,001) (2,100) - ---- ---- ---- Equity dividends paid (1,696) (1,696) (2,967) ---- ---- ---- Net cash outflow before financing (29,905) (12,247) (6,936) ---- ---- ---- Financing New bank loan acquired 1,500 1,500 4,940 Repayment of loans (9,359) (707) (1,419) Finance lease (16) - - Issue of shares 52,447 223 1 ---- ---- ---- Net cash inflow from financing 44,572 1,016 3,522 ---- ---- ---- Increase/ (decrease) in cash in the period 8 14,667 (11,231) (3,414) ====== ====== ====== Reconciliation of net cash flow to movement in net debt Increase/ (decrease) in cash in the period 14,667 (11,231) (3,414) Net cash outflow/ (inflow) from decrease/ (increase) in debt 7,875 (793) (3,521) ---- ---- ---- Change in net funds resulting from cash flows 22,542 (12,024) (6,935) New finance leases (280) - - Arrangement fee amortisation (65) (37) (19) ---- ---- ---- Movement in net funds in the period 22,197 (12,061) (6,954) Net funds at start of period 8 447 447 7,401 ---- ---- ---- Net funds at end of period 8 22,644 (11,614) 447 ====== ====== ====== INTERX PLC Notes 1. Basis of preparation The comparative figures for the 27 weeks to 5 February 2000 have been extracted from the Company's interim financial statements for that period. The comparative figures for the year ended 30 July 1999 have been extracted from the Group's statutory accounts to that date. These received an unqualified audit report, did not contain a statement under section 237(2) or 237(3) of the Companies Act 1985 and have been filed with the Registrar of Companies. This interim report, which is unaudited and does not constitute statutory accounts, has been prepared on the basis of the accounting policies laid down in those statutory accounts. 2. Segmental analysis of turnover and operating profit 39 weeks to 29 April 2000 (unaudited) Electronic Product InterX Parent Distri- Intell- Tech- Company Total bution igence nology £'000 £'000 £'000 £'000 £'000 Turnover 292,281 805 235 - 293,321 Gross profit 21,522 334 235 - 22,091 Operating (loss)/ profit - pre exceptional items 4,718 (3,287) (257) (1,600) (426) Operating (loss)/ profit - post exceptional items 4,718 (3,287) (257) (5,205) (4,031) 27 weeks ended 5 February 2000 (unaudited) Electronic Product InterX Parent Distri- Intell- Tech- Company Total bution igence nology £'000 £'000 £'000 £'000 £'000 Turnover 200,046 500 - - 200,546 Gross profit 14,543 218 - - 14,761 Operating (loss)/ profit - pre exceptional items 3,857 (2,023) - (770) 1,064 Operating (loss)/ profit - post exceptional items 3,857 (2,023) - (770) 1,064 3. Geographical analysis of turnover and gross profit Turnover and Operating (loss)/profit are derived entirely from operations in the UK Distribution Turnover and Gross profit by destination are analysed below: 39 weeks ended 27 weeks ended 29 April 2000 5 February 2000 (unaudited) (unaudited) UK Europe Total UK Europe Total £'000 £'000 £'000 £'000 £'000 £'000 Turnover 258,124 34,157 292,281 177,627 22,419 200,046 Gross profit 20,287 1,235 21,522 13,715 828 14,543 Gross margin 7.9% 3.6% 7.4% 7.7% 3.7% 7.3% 4. Taxation There is no taxation charge for the period (27 weeks ended 5 February 2000 and year ended 30 July 1999:31%). 5. Earnings per share Earnings per share for the period is based on the (loss)/profit attributable to the weighted average of 22,633,356 ( 5 February 2000 : 21,227,188; 30 July 1999 : 21,194,134) ordinary shares in issue during the period. The diluted earnings per share for the period is based on the (loss)/profit attributable to the adjusted weighted average of 22,633,356 (5 February 2000: 21,227,188; 30 July 1999: 21 285,389) ordinary shares for the period. 6.Share capital and reserves Movements in share capital and reserves were as follows: Capital Profit & redem- Share Share ption Other Loss capital premium reserve reserve account Total £'000 £'000 £'000 £'000 £'000 £'000 At 31 July 1999 1,063 2,663 31 - 11,541 15,298 Shares issued, net of expenses 677 52,312 - - - 52,989 Merger relief - - - 198,066 - 198,066 Loss for the period - - - - (4,920) (4,920) ---- ---- ---- ---- ---- ---- At 29 April 2000 1,740 54,975 31 198,066 6,621 261,433 ====== ====== ====== ====== ====== ====== 7.Reconciliation of operating (loss)/profit to net cash (outflow)/inflow from operating activities: 39 wks to 27 wks to Yr ended 29 Apr '00 5 Feb '00 30 Jul '99 (unaudited)) (unaudited) (audited) £'000 £'000 £'000 Operating (loss)/profit (4,031) 1,064 2,312 Depreciation charges 2,356 1,524 1,815 Amortisation of goodwill 3,397 - - Loss on disposal of fixed assets 5 5 11 Increase in stock (16,189) (7,067) (3,033) (Increase)/ decrease in debtors (17,369) 3,154 (20,207) Increase/ (decrease) in creditors 12,636 (4,701) 20,158 Net cash (outflow)/ inflow from operating activities (19,195) (6,021) 1,056 ====== ====== ====== 8.Analysis of Net funds At 31 Jul At 29 Apr '99 Non cash '00 (audited) Cash flow movements (audited) £'000 £'000 £'000 £'000 Cash at bank and in hand 8,241 14,667 - 22,908 Debt due within 1 year (1,407) 1,407 - - Debt due after 1 year (6,387) 6,452 (65) - Finance leases - 16 (280) (264) ---- ---- ---- ---- (7,794) 7,875 (345) (264) ---- ---- ---- ---- Total Net funds 447 22,542 (345) 22,644 ====== ====== ====== ====== A copy of this report is being sent to all shareholders. Copies are available to the public on request from the Company's registered office, at Holden House, 57 Rathbone Place, London W1P 1AW.

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