Interim Results

ITIS Holdings PLC 21 November 2002 21st November 2002 ITIS Holdings plc Interim results for the six months ended 30th September 2002 Highlights • New 5 year agreement signed with the AA providing ITIS with the exclusive rights to operate AA Roadwatch branded telephone and telematics services; • Growing revenues from UK Government contracts for Floating Vehicle Data (FVD); • Turnover up 76% to £1,103,000 (2001: £628,000); • Operating loss reduced by 26% to £3,748,000 (2001: loss £5,034,000); • Strong cash position of £13.8 million. Stuart Marks, Chief Executive of ITIS Holdings plc commented: 'ITIS is now consistently winning new business and key contracts. The recent announcement with the AA is demonstrative of our ability to secure long term contracts with high profile brands. Vehicle manufacturers increasingly like our unique position in the areas of traffic data collection (FVD), distribution (RDS-TMC) and vehicle security (NavTrak). As a result we continue to believe that we are excellently positioned to take advantage of this market as it expands in the future.' Enquiries: Stuart Marks, Chief Executive ITIS Holdings plc Telephone: 0161 929 5788 Ginny Pulbrook , Director Citigate Dewe Rogerson Telephone: 020 7282 2940 Financial Overview For the six month period ended 30th September 2002 turnover increased by 76% to £1,103,000 (2001: £628,000). The increased revenue and the stringent cost reduction programme initiated last year has enabled us to reduce the operating loss for the financial period to £3,748,000 (2001: loss £5,034,000), substantially reduce cash outflow and safeguard our cash position. At September 30th 2002, the cash balance of ITIS remained strong at £13.8 million. We are seeing a reducing trend in monthly cash burn which will continue into the second half of the year and, as a result, the Directors are confident that ITIS has sufficient cash both to develop and to grow the business. Business review The AA On the 11th October ITIS announced a new five year contract with Automobile Association Developments Limited, part of the Automobile Association Limited (AA), to exclusively operate AA Roadwatch branded telephone and telematics services and to exploit new opportunities for selling and marketing traffic information. ITIS intends to build upon its new ownership of these telephone based traffic information services, by expanding its business into this important growth area. The new contract provides ITIS with a secure, long term revenue stream, which will significantly enhance Group revenues with immediate effect. ITIS' traffic information service is now available under the AA Roadwatch brand on all mobile phone networks, whilst Vodafone and T-Mobile also have their own short dial services. Our traffic information also enhances route information given over the AA's web site. The market The market has gathered increased momentum as vehicle manufacturers define their strategies for location related services. All major manufacturers are now introducing these services into their vehicles either as an option (in the case of NavTrak) or as standard equipment (RDS-TMC). Significantly, as part of this step change, in house organisations that had been set up to develop and operate these services have been disbanded and the manufacturers are now choosing to work with specialist providers like ITIS, who have the necessary skills, technology and delivery channels. Importantly, as the market develops so do the opportunities to expand our offering. In addition to the provision of content to in-vehicle applications, our traffic information service is now available on all mobile phone networks under the AA Roadwatch brand. Government agencies are increasingly turning to ITIS's traffic data, collated by FVD, for analysing congestion and evaluating strategic transport needs. Floating Vehicle Data ITIS now operates the world's largest commercial FVD system providing full coverage of the UK's Strategic Road Network totalling some 8,200 miles. Importantly this project was delivered on time and below budget. FVD is becoming increasingly valuable to a wide range of customers and we are benefiting from existing contracts with the AA, vehicle manufacturers and the UK Government agencies, as they provide important reference sites to potential customers. In October 2002 we announced a 5 year contract with the Scottish Executive to supply a comprehensive journey time planner and a traffic delay information service. Today, we are pleased to announce that ITIS is providing Transport For London (TFL) data on congestion patterns that will help measure the impact of congestion charging in London before and after its launch. As the software and systems are fully scaleable, FVD can also be licenced to other operators outside the UK. In particular, we have received many enquiries from USA and as a result of this interest we acquired a US patent on 1st November, which mirrors our FVD technology, and potentially opens up this valuable market. RDS-TMC RDS-TMC remains the only international standard for providing traffic data to a navigational system. Virtually all screen based Satellite Navigation systems are TMC compliant and vehicle manufacturers see this as a low cost entry point to providing driver information services. We continue to develop our RDS-TMC offering and are working with a number of manufacturers to make RDS-TMC available on their navigation hardware. Currently the service is fully operational with Toyota and BMW as well as leading aftermarket navigation suppliers such as VDO Dayton and Alpine. ITIS provides the RDS-TMC service using the AS/1 licence which enables our traffic data to be transmitted nationally using the Classic FM network. The licence expires on 31st December 2003 and in October this year, ITIS submitted its application to the Radio Authority to operate the licence for the next 8 years. Although the formal process is expected to be completed during December, the Radio Authority announced that the only application they received was from ITIS. NavTrak Our focus with NavTrak, through the development and launch of NavTrak ADR (Automatic Driver Recognition), has been to develop a product that sets the industry standard and is attractive to vehicle manufacturers and insurers alike. NavTrak ADR now uniquely addresses the key concerns of manufacturers and insurers: detecting theft with the owners keys, delivering low current drain and offering full service coverage across Europe including police liaison in 20 countries. During the period we connected 1,085 NavTrak units. While satisfactory, the figure does reflect the challenges of selling aftermarket products without the endorsement of vehicle manufacturers and we are now undergoing rigorous evaluation with a number of prestige manufacturers for endorsement of NavTrak which will substantially enhance our volume opportunity. New Partners PTV AG provides software, consulting and research for travel, traffic and transportation planning in the B2B market. They are the European Market Leader specialising in innovative technologies which ensure continuous mobility in the business fields of Traffic, Mobility and Logistics. ITIS is supporting PTV's web based Telematics platform for OEM's with ITIS Dynamic Traffic Data, and working closely with PTV on joint applications to further promote FVD to the public. Through our agreement with PTV GmbH, ITIS is providing realtime traffic information to a website recently launched by Toyota (www.getmethere.co.uk). Board changes We are delighted to announce that Andrew Forrest has been appointed to the Board as Finance Director with immediate effect. Andrew, previously the Company's Financial Controller, has been with the Company since May 2000. Outlook We are very encouraged by the business relationships we have created both with the AA and vehicle manufacturers for whom we are now offering a wide range of in car information services. As revenues continue to grow the Directors remain confident that the Company can continue to reduce cash burn towards achieving positive cash flow. Notes Andrew Derek Forrest has confirmed that there are no companies or partnerships of which he is or has been a director or partner at any time in the last five years and that there is no additional information with regards to his appointment that would require disclosure pursuant to paragraph (f) of Schedule Two of the AIM Rules. Consolidated profit and loss account Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Turnover 1,102,945 628,280 1,480,520 Cost of sales (2,045,412) (1,697,201) (3,895,119) __________ __________ __________ Gross loss (942,467) (1,068,921) (2,414,599) Other operating costs - Other (2,805,831) (3,965,262) (7,153,051) - Impairment of fixed assets - - (896,000) __________ __________ __________ Operating loss (3,748,298) (5,034,183) (10,463,650) Share of operating loss of discontinued joint venture - (275,000) (659,678) Goodwill amortisation - joint venture - (141,667) (236,111) Profit on sale of joint venture - - 1,533,971 Interest receivable 284,357 679,486 1,089,214 Interest payable and similar charges (1,929) - (7,121) __________ __________ __________ Loss on ordinary activities before taxation (3,465,870) (4,771,364) (8,743,375) Tax on loss on ordinary activities - - 255,843 __________ __________ __________ Loss for the financial period (3,465,870) (4,771,364) (8,487,532) ====== ====== ====== Loss per ordinary share (p) (3.5) (4.8) (8.6) ====== ====== ====== The Group has no recognised gains or losses other than those shown in the profit and loss account above. Consolidated Balance Sheet 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Fixed assets Intangible assets 414,502 456,500 435,501 Tangible assets 387,861 1,202,263 474,371 Investments - Joint ventures - share of gross assets - 705,878 - - share of gross liabilities - (180,878) - - associated goodwill - 661,111 - __________ __________ __________ 802,363 2,844,874 909,872 __________ __________ __________ Current assets Stocks 152,179 104,959 109,648 Debtors - due within one year 2,119,471 3,458,519 2,825,139 - due after more than one year 500,000 - 500,000 Cash at bank and in hand 13,812,444 19,718,863 17,079,443 __________ __________ __________ 16,584,094 23,282,341 20,514,230 Creditors: Amounts falling due within one year (1,548,043) (3,070,182) (2,083,237) __________ __________ __________ Net current assets 15,036,051 20,212,159 18,430,993 __________ __________ __________ Total assets less current liabilities 15,838,414 23,057,033 19,340,865 Creditors: Amounts falling due after more than one year (342,224) (378,805) (378,805) __________ __________ __________ Net assets 15,496,190 22,678,228 18,962,060 ======== ========= ========= Capital and reserves Called-up share capital 5,186,286 5,186,286 5,186,286 Share premium account 37,342,877 37,342,877 37,342,877 Profit and loss account (27,032,973) (19,850,935) (23,567,103) __________ __________ __________ Equity shareholders' funds 15,496,190 22,678,228 18,962,060 ======== ========= ========= Consolidated Cash Flow Statement Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Net cash outflow from operating activities (3,504,057) (5,481,010) (9,595,338) __________ __________ __________ Returns on investments and servicing of finance Interest paid - - (5,835) Interest element of finance lease rental payments (1,929) - (1,286) Interest received 284,357 67,665 1,027,135 __________ __________ __________ Net cash inflow from returns on investments and servicing of finance 282,428 67,665 1,020,014 __________ __________ __________ Taxation Research and development tax credit - - 255,843 __________ __________ __________ Net cash inflow from taxation - - 255,843 __________ __________ __________ Capital expenditure and financial investment Purchase of tangible fixed assets (30,278) (632,929) (705,235) Sale of tangible fixed assets 5,000 6,500 6,500 __________ __________ __________ Net cash outflow from capital expenditure (25,278) (626,429) (698,735) __________ __________ __________ Acquisitions and disposals Investment in joint venture - - (490,040) Disposal of joint venture - - 859,000 __________ __________ __________ Net cash inflow from acquisitions and disposals - - 368,960 __________ __________ __________ Cash outflow before financing (3,246,907) (6,039,774) (8,649,256) __________ __________ __________ Financing Issue of shares to minorities - - 200 Capital element of finance lease rental payments (20,092) - (30,138) __________ __________ __________ Net cash outflow from financing (20,092) - (29,938) __________ __________ __________ Decrease in cash (3,266,999) (6,039,774) (8,679,194) =========== ========= ======== Notes (unaudited) 1. Accounting policies The interim accounts have been prepared using accounting policies stated in the Company's Report and Accounts for the year ended 31 March 2002 and are unaudited. 2. Preparation of the interim financial information The summarised results for the six months to 30 September 2002 have been prepared in accordance with the accounting policies adopted in the accounts for the year to 31 March 2002. These and the comparative results for the half year to 30 September 2001 are non-statutory accounts within the meaning of Section 240 of the Companies Act 1985 and have not been reported upon by the auditors under Section 235 of the Companies Act 1985. The comparative figures for the year ended 31 March 2002 are an abridged version of the Company's full accounts and, together with other financial information contained in these interim results, do not constitute statutory accounts of ITIS Holdings PLC within the meaning of section 240 of the Companies Act 1985. The statutory accounts for the year ended 31 March 2002 have been delivered to the Registrar of Companies. The report of the auditors was not qualified and did not contain a statement under Section 237 (2) and (3) of the Companies Act 1985. 3. Loss per share Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Loss for the financial period (3,465,870) (4,771,364) (8,487,532) __________ __________ __________ Weighted average number of ordinary shares 98,420,884 98,420,884 98,420,884 in issue __________ __________ __________ Loss per ordinary share (p) (3.5) (4.8) (8.6) __________ __________ __________ Due to losses made, there is no difference between loss per ordinary share and diluted loss per ordinary share. 4. Net cash outflow from operating activities Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Operating loss (3,748,298) (5,034,183) (10,463,650) Depreciation and amortisation of licenses 134,954 340,967 346,533 Impairment of fixed asstes - - 896,000 Increase in stocks (42,531) (11,080) (15,769) Decrease (increase) in debtors 705,668 (1,539,051) (674,616) (Decrease) increase in creditors (551,683) 762,700 316,527 Profit on disposal of tangible fixed assets (2,167) (363) (363) __________ __________ __________ Net cash outflow from operating activities (3,504,057) (5,481,010) (9,595,338) ========== ========= ========= 5. Reconciliation of net cash flow to movement in net funds Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Decrease in cash in the period (3,266,999) (6,039,774) (8,679,194) Cash inflow from decrease in lease funding 20,092 - 30,138 __________ __________ __________ Change in net funds (3,246,907) (6,039,774) (8,649,056) New finance lease - - (80,368) __________ __________ __________ (3,246,907) (6,039,774) (8,729,424) Net funds brought forward 17,029,213 25,758,637 25,758,637 __________ __________ __________ Net funds carried forward 13,782,306 19,718,863 17,029,213 ========= ======= ======= 6. Reconciliation of movements in Group shareholders' funds Six months to Six months to Year ended 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £ £ £ Loss for the financial period (3,465,870) (4,771,364) (8,487,532) __________ __________ __________ Net reduction from shareholders' funds (3,465,870) (4,771,364) (8,487,532) Opening shareholders' funds 18,962,060 27,449,592 27,449,592 __________ __________ __________ Closing shareholders' funds 15,496,190 22,678,228 18,962,060 ========== ========= ====== 7. Interim statement A copy of this announcement will be circulated to all registered shareholders of the Company and copies will be available for members of the public upon application to the Registered Office at Station House, Stamford New Road, Altrincham, Cheshire, WA14 1EP. This information is provided by RNS The company news service from the London Stock Exchange

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