Interim Results
ITIS Holdings PLC
09 November 2004
9th November 2004
ITIS Holdings plc (the 'Company' or 'ITIS')
Results for the six months ended 30th September 2004
ITIS Holdings plc, a leading UK road traffic information and data specialist, is
pleased to announce its results for the six months ended 30th September 2004.
Highlights
• New contracts for RDS-TMC with Land Rover, Renault, Nissan and Vauxhall
Motors;
• Extension of BMW Group contract for RDS-TMC to include Mini announced
today;
• Estimotion acquisition has exceeded expectations with deployments in
Antwerp (Belgium), Baltimore (USA) and Scotland;
• Turnover up 46% to £4.6m (2003: £3.2m);
• Loss for financial period almost halved to £1.6m (2003: £3.0m), including
£0.7m of costs associated with Estimotion operations and deployment;
• Period end cash balance remains strong at £5.5m (£6.1m at 31st March
2004);
• UK business now approaching breakeven;
• We are pleased to announce today that our next confirmed Estimotion
activity will be in Melbourne and Sydney (Australia) under the terms of a
new licencing agreement.
Stuart Marks, Chief Executive ITIS Holdings plc commented:
'These excellent results demonstrate that the combination of a strong order book
and vigorous cost control have enabled the company to continue to invest in new
technologies whilst retaining leadership in the provision of traffic information
services in the UK. The Estimotion technology has been very well received,
RDS-TMC goes from strength to strength and NavTrak has performed well.
Trading has remained strong throughout October and we expect the UK business to
reach breakeven during the second half of this financial year. As a result, the
board is confident that the company is well positioned for considerable growth
and profitability.'
Financial Overview
For the six month period ended 30th September 2004, turnover increased 46% to
£4.6m (2003: £3.2m), which has resulted in an increase in gross profit of £1.0m
to £1.1m (2003: £0.1m). Operating costs have again been stringently controlled,
with a reduction over the six months of £0.5m to £2.7m (2003: £3.2m). The
increased revenue and continuing cost control has enabled us to reduce the
operating loss for the financial period by 47% to £1.6m (2003: £3.1m).
At 30th September 2004, the cash balance of ITIS remained strong at £5.5m
million (30th September 2003: £7.5m). Increasing revenues and the strength of
the UK business leave the Directors confident that ITIS has sufficient cash to
develop the business and to fully exploit the opportunities now being afforded
by the Estimotion technology in the UK and internationally.
Business Review
RDS-TMC
ITIS is by far the dominant RDS-TMC service provider in the UK and has been
solely responsible for developing the largest commercial service in Europe. We
currently have contracts with Bentley, BMW, Ford, Land Rover, Lexus, Nissan,
Saab, Subaru, Toyota, Vauxhall and Volkswagen and further manufacturers are
expected to sign up over the next few months. We also supply TMC to all major
aftermarket navigation manufacturers including Alpine, Clarion, Kenwood,
Panasonic, Pioneer and Siemens VDO. We recently improved our broadcasting
coverage through an agreement with Scottish Radio Holdings plc to acquire extra
bandwidth in Scotland and Northern Ireland. Our customers sell their vehicles
throughout the UK and it is important that wherever a driver uses a navigation
system TMC can be clearly received.
TMC is recognised as the only international standard for delivering traffic
information into a vehicle navigation system. Through our international
development with the Estimotion technology we now have access to potential new
markets for TMC which we may operate with local partners.
Estimotion
Since its acquisition in December 2003, Estimotion has exceeded our
expectations. Over the last six months there has been a huge business
development drive running in parallel with integrating the software development
teams in the UK and Israel. This had led to deployments in Belgium, the US and
the UK, which are expected to contribute revenues in the next financial year.
Whilst the majority of enquiries we receive are for traffic flow information,
discussions at Government level have highlighted additional applications for our
technology.
Whilst the fully operational service in Israel enables us to demonstrate the
benefits of the Estimotion technology, there is no doubt that successful
deployments in Antwerp, Baltimore and Scotland will lead to important new
contracts - especially in the US where the Maryland Department of Transport are
viewed as early adopters of new traffic collection methods.
At the Company's AGM on 14th September 2004, we stated that our preferred method
of geographic expansion for this technology was to form partnerships in local
markets. This will reduce marketing, sales and administration costs and enable
us to receive licence fees and revenue shares with minimal set up costs.
We are therefore pleased to announce today that we have reached agreement with
Traffic Intelligence Pty Ltd, to be our exclusive licensee for the Estimotion
Technology in Australia and New Zealand and, as appropriate, other markets in
Asia Pacific. Traffic Intelligence Pty Ltd is in the process of finalising a
supply agreement with a major network and expects to open up Melbourne and
Sydney next year. Traffic Intelligence Pty Ltd is also tendering for various
Government and automotive projects which require high quality traffic
information. This transaction and others underline the flexibility of the
Estimotion technology and we continue to receive serious enquiries from around
the world which we expect to lead to the deployment of this technology in
various new cities.
As a direct result of the progress made with the development of the technology,
on October 1st 2004 we paid the deferred consideration due for the Estimotion
intellectual property of US$1.5m (£0.8m). Excluding running costs and general
overheads of US$75k per month, this takes our investment in Estimotion to date
to US$1.8m. Up to a further US$2.7m earn-out may be payable over the next two
years dependant upon the performance of the ITIS Group as a whole.
NavTrak
NavTrak has enjoyed a solid performance for the period and is now cash flow
positive on a monthly basis. We have seen the subscriber base growing strongly
and the product has now been successfully launched in several European countries
in association with Bentley Motors.
A landmark event was the recent decision by Ferrari SPA to fit NavTrak on the
production line at the Ferrari and Maserati factories as opposed to the original
agreement where units were fitted at Maranello Sales in the UK. This is a
prestigious achievement for NavTrak that we are confident will lead to further
business in this area.
People
As the Group reaches this exciting stage of its development the Board would like
to thank everyone in the UK and Israel for their continued hard work and
commitment. We are particularly pleased at the integration of the software
development teams in the UK and Israel and the knowledge that is now flowing
between us, enabling them to further improve our technology. The NavTrak team
have put in an outstanding performance culminating in successfully integrating
NavTrak onto the production line at Ferrari and Maserati.
Current Trading and Prospects
The Board believes that the company is now entering an exciting and high growth
period. The front end investment of the past few years and management's ability
to control costs during this period have resulted in a business that is more
than capable of becoming a leading global player in the traffic information
market. The approach of careful cost control with consistent increases in
revenues should lead to a profitable and well capitalised company.
Contact:
Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700
Ginny Pulbrook, Director Citigate Dewe Rogerson - 0207 282 2945
Consolidated profit and loss account
Note Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Group turnover 7 4,604,880 3,155,760 7,057,890
Exceptional direct costs 8 - - (362,583)
Other cost of sales (3,518,780) (3,053,778) (6,496,959)
Cost of sales (3,518,780) (3,053,778) (6,859,542)
__________ __________ __________
Gross profit 1,086,100 101,982 198,348
Exceptional operating costs 8 - - (383,790)
Other operating costs (2,730,358) (3,225,102) (6,302,153)
Operating costs (2,730,358) (3,225,102) (6,685,943)
__________ __________ __________
Operating loss (1,644,258) (3,123,120) (6,487,595)
Group interest receivable and similar income 100,404 154,913 270,902
Group interest payable and similar charges (354) (723) (1,607)
__________ __________ __________
Loss on ordinary activities before taxation 7 (1,544,208) (2,968,930) (6,218,300)
Tax on loss on ordinary activities (5,358) - 75,558
__________ __________ __________
Loss on ordinary activities after taxation (1,549,566) (2,968,930) (6,142,742)
Minority interests (4,876) - (2,308)
__________ __________ __________
Loss for the financial period (1,554,442) (2,968,930) (6,145,050)
__________ __________ __________
Basic and diluted loss per ordinary share (p) 3 (1.6) (3.0) (6.3)
__________ __________ __________
Consolidated statement of total recognised gains and losses
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Loss for the financial period (1,554,442) (2,968,930) (6,145,050)
Currency translation difference 3,571 - 2,194
__________ __________ __________
Total recognised losses relating to the year (1,550,871) (2,968,930) (6,142,856)
__________ __________ __________
Consolidated Balance Sheet
Note 30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Fixed assets
Intangible assets 963,704 375,540 981,062
Tangible assets 413,244 750,070 414,077
__________ __________ __________
1,376,948 1,125,610 1,395,139
__________ __________ __________
Current assets
Stocks 99,752 458,416 156,914
Debtors
- due within one year 2,143,808 3,799,071 2,705,050
- due after more than one year 740,196 885,312 817,186
Cash at bank and in hand 5,464,140 7,536,292 6,046,068
__________ __________ __________
8,447,896 12,679,091 9,725,218
Creditors: Amounts falling due within one year (5,195,805) (3,997,290) (4,539,723)
__________ __________ __________
Net current assets 3,252,091 8,681,801 5,185,495
__________ __________ __________
Total assets less current liabilities 4,629,039 9,807,411 6,580,634
Creditors: Amounts falling due after more than one year (953,429) (1,242,224) (1,294,189)
Provisions for liabilities and charges (263,479) (328,319)
-
__________ __________ __________
Net assets 7 3,412,131 8,565,187 4,958,126
__________ __________ __________
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 (39,124,216) (33,963,976) (37,573,345)
__________ __________ __________
Shareholders' funds 3,404,947 8,565,187 4,955,818
6
Minority Interests - equity 7,184 - 2,308
__________ __________ __________
Total capital employed 3,412,131 8,565,187 4,958,126
__________ __________ __________
Shareholders' funds may be analysed as:
Equity interests 187,079 5,347,319 1,737,950
Non-equity interests 3,217,868 3,217,868 3,217,868
__________ __________ __________
3,404,947 8,565,187 4,955,818
__________ __________ __________
Consolidated Cash Flow Statement
Note
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Net cash outflow from operating activities 4 (576,777) (3,770,115) (4,975,838)
__________ __________ __________
Returns on investments and servicing of finance
Interest element of finance lease rental payments (354) (723) (1,607)
Interest received 100,404 140,964 275,902
__________ __________ __________
Net cash inflow from returns on investments and servicing of finance 100,050 140,241 274,295
__________ __________ __________
Taxation
Research and development tax credit 78,137 246,593 241,431
__________ __________ __________
Net cash inflow from taxation 78,137 246,593 241,431
__________ __________ __________
Capital expenditure and financial investment
Purchase of tangible fixed assets (78,193) (124,326) (293,375)
Sale of tangible fixed assets 9,200 - -
Purchase of intangible fixed assets - - (173,570)
Sale of intangible fixed assets - - 362,475
__________ __________ __________
Net cash outflow from capital expenditure (68,993) (124,326) (104,470)
__________ __________ __________
Cash outflow before financing (467,583) (3,507,607) (4,564,582)
__________ __________ __________
Financing
Purchase of own shares under Treasury Regulations - - (435,443)
Issue of shares to minorities - - 147
Capital element of finance lease rental payments (114,345) (110,046) (110,046)
__________ __________ __________
Net cash outflow from financing (114,345) (110,046) (545,342)
__________ __________ __________
Decrease in cash 5 (581,928) (3,617,653) (5,109,924)
__________ __________ __________
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 2004 and have been
neither audited nor reviewed.
2. Preparation of the interim financial information
The summarised results for the six months to 30 September 2004 and the
comparative results for the half year to 30 September 2003 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 2004 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 2004 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. Basic and diluted loss per ordinary share
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Loss for the financial period (1,554,442) (2,968,930) (6,145,050)
__________ __________ __________
Weighted average number of ordinary shares in 96,243,669 98,420,884 98,218,629
issue
__________ __________ __________
Loss per ordinary share (p) (1.6) (3.0) (6.3)
__________ __________ __________
Due to losses made, there is no difference between loss per ordinary share and
diluted loss per ordinary share.
4. Reconciliation of operating loss to cash outflow from operating
activities
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £
£
Operating loss (1,644,258) (3,123,120) (6,487,595)
Depreciation and amortisation of licences 145,213 207,870 372,072
Impairment losses - - 362,583
Decrease in stocks 57,162 310,449 611,951
Decrease (increase) in debtors 563,665 (1,221,604) 4,893
Increase (decrease) in creditors 366,928 56,290 (168,061)
(Decrease) increase in provisions (64,840) - 328,319
Profit on disposal of fixed assets (647) - -
__________ __________ __________
Net cash outflow from operating activities (576,777) (3,770,115) (4,975,838)
__________ __________ __________
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
2004 2003 2004
Unaudited Unaudited Audited
£ £
£
Decrease in cash in the period (581,928) (3,617,653) (5,109,924)
Cash inflow from decrease in lease funding 114,345 110,046 110,046
__________ __________ __________
Change in net funds resulting from cash flows 467,583 (3,507,607) (4,999,878)
New finance lease (57,381) - -
Translation differences 3,571 - 2,047
__________ __________ __________
Change in net funds in the period (521,393) (3,507,607) (4,997,831)
Net funds brought forward 5,646,068 10,643,899 10,643,899
__________ __________ __________
Net funds carried forward 5,124,675 7,136,292 5,646,068
__________ __________ __________
6. Reconciliation of movements in Group shareholders' funds
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £ £
Loss for the financial period (1,554,442) (2,968,930) (6,145,050)
Other recognised gains and losses relating to the period 3,571 - 2,194
Purchase of own shares - - (435,443)
__________ __________ __________
Net reduction in Group shareholders' funds (1,550,871) (2,968,930) (6,578,299)
Opening Group shareholders' funds 4,955,818 11,534,117
11,534,117
__________ __________ __________
Closing Group shareholders' funds 3,404,947 8,565,187 4,955,818
__________ __________ __________
7. Segmental analysis
The Directors are of the opinion that the Group operates in a single segment,
that of the provision of telematic products and services. Hence all turnover,
profits and net assets relate to this class of business.
Six months to Six months to Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
£ £
£
Turnover by destination and origin
United Kingdom 4,604,880 3,155,760 7,057,890
Rest of World - - -
__________ __________ __________
Group 4,604,880 3,155,760 7,057,890
__________ __________ __________
Loss before taxation
United Kingdom (1,352,849) (2,968,930) (6,127,185)
Rest of World (191,359) - (91,115)
__________ __________ __________
Group (1,544,208) (2,968,930) (6,218,300)
__________ __________ __________
Net assets
United Kingdom 3,409,229 8,565,187 4,950,920
Rest of World 2,902 - 7,206
__________ __________ __________
Group 3,412,131 8,565,187 4,958,126
__________ __________ __________
8. Exceptional items
Exceptional direct costs in the year ended 31 March 2004 comprise a £362,583
impairment charge relating to a fixed asset no longer utilised by the Group.
Exceptional items included within administrative expenses in the year ended 31
March 2004 comprise provisions for onerous leases.
9. 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
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