Prelim Results and Cash Offer
Mission Testing PLC
29 August 2002
For Immediate Release 29th August 2002
Mission Testing plc
('Mission Testing' or 'the Company')
Unaudited preliminary results for the year ended 30th June 2002
& details of recommended cash offer
Highlights
• Strong performance across all business operations despite increasingly
competitive and budget restrained market place
• Turnover up 58% to £16.5 million (2001: £10.5 million)
• Profit before interest, tax, goodwill amortisation and exceptional items up
16% to £1.3 million (2001: £1.1 million)
• Second interim dividend of 1.50 pence per share to be paid
• Current market pressures on Mission Testing has focused your Board on securing
Shareholder value
• As a consequence, your Board, in tandem with the Board of The Capita Group
Plc, have agreed a recommended cash offer at 80p for each Mission Testing
ordinary share
• Mission Testing, as part of The Capita Group Plc will be better placed to win
substantial new business with clients receiving an expanded service capability
Enquiries:
Tony Wells, Chief Executive 01293 457125
Mission Testing plc
Derek Rawlings, Director of Corporate Finance 020 7597 5970
Investec Investment Banking
Shane Dolan, Biddicks 020 7448 1000
CHAIRMAN'S STATEMENT
I am delighted to be able to report that Mission Testing has continued to grow
with revenues up over 57% to £16.5 million (2001: £10.5 million) and profit
before interest, tax, goodwill amortisation and exceptional items up
approximately 16% to £1.3 million (2001: £1.1 million).
The revenue increase came from all of Mission Testing's service offerings and
shows the positive effects from our continuing investment in the company and our
maintained focus on the provision of the highest quality service. Gross profit
levels also grew, from 25.8% in 2000/1 to 26.8% in 2001/2 giving support to our
contention that we are leaders in our field. This result is particularly welcome
since the market in which we operate is one in which significant reductions in
spend on IT and on software developments have become commonplace and where many
high technology businesses are failing not only to achieve growth but also
failing to maintain sustainable levels of sales.
In my Chairman's Statement last year I referred to the improving balance between
the test management and support sectors of the Group. This has continued and the
acquisition of Specialist Testing Solutions Limited ('STS') was, indeed, an
accelerator to that improvement. As regards additional acquisitions since August
2001, we have continued to evaluate the market and have found no company that
met all our criteria for adding value to our business.
Consistent with our ongoing policy of adopting a prudent approach on dividends
the Board has agreed that a second interim dividend of 1.5 pence per share shall
be paid to shareholders on the register as of 6 September 2002.
I made mention in my statement prior to the Annual General Meeting in November
of last year that we would continue to review management needs and look to
strengthen the team we have. To that end we appointed a new Finance Director,
Carl Thompson in December 2001 and were delighted to be able to promote Carl to
the position of Chief Operating Officer recently. We have also recently
appointed a new Sales Director, Chris Shaw, to the operating team. These moves
have allowed Tony Wells, the Chief Executive, to concentrate more on strategic
matters. We welcome both Carl and Chris to the team.
Looking forward, however, Mission Testing is beginning to feel the effect of
increasing competition in its market, particularly as broader based IT service
providers are turning their attentions to the specialised testing market as
revenues from their core operations decrease. Your Board believes that, as a
part of a much larger group, Mission Testing will be far better placed to win
substantial new business. I am, therefore, pleased to announce that the Boards
of Mission Testing and The Capita Group Plc ('Capita') have reached agreement on
the terms of a recommended cash offer for the entire issued ordinary share
capital of Mission Testing. The offer values each Mission Testing ordinary share
at 80 pence payable in cash. Furthermore, the declared dividend of 1.5 pence per
share referred to above will also be paid. Further details of the offer are set
out in the Capita announcement made today.
As part of the enlarged Capita group, our staff will be able to benefit from the
wider opportunities offered by Capita and its various incentive schemes and
option schemes and our clients will enjoy expanded service capability.
I wish to offer sincere thanks to my colleagues on the Board, both executive and
non-executive. Their efforts in the last year have been greatly appreciated as
have those of all the staff at Mission Testing. Well done and thank you to all
in the team. I trust all shareholders will appreciate the efforts of the team
and will support the Board in its recommendation of the offer announced today.
Graham Pooley
Chairman
29 August 2002
Mission Testing plc
Group Profit and Loss Account
for the year ended 30 June 2002
Note 2002 2001
£000 £000 £000 £000
Turnover
Continuing operations 14,925 10,515
- Acquisitions 1,624 -
16,549 10,515
Cost of sales (12,107) (7,802)
Gross profit 4,442 2,713
Administrative expenses (4,415) (1,919)
Operating profit before goodwill amortisation and exceptional items: 1,279 1,104
Goodwill amortisation 5 (1,106) -
Exceptional items (146) (310)
(included in administrative expenses above)
Operating profit
Continuing operations (146) 794
- Acquisitions 173 -
27 794
Interest receivable 314 258
Interest payable (9) (85)
Profit on ordinary activities before taxation 332 967
Tax on profit on ordinary activities (460) (337)
(Loss)/profit on ordinary activities after taxation (128) 630
Dividends paid and declared 2 (434) (305)
Retained (loss)/profit for the year (562) 325
Earnings per share (pence)
Adjusted basic earnings per share (excluding exceptional costs) 3 6.36 6.41
Basic (loss)/earnings per share 3 (0.75) 4.56
Diluted (loss)/earnings per share 3 (0.75) 4.43
The Group had no recognised gains or losses, in either the current or prior
years, other than those dealt with in the profit and loss account. All of the
results derive from continuing operations
Mission Testing plc
Group Balance Sheet
at 30 June 2002
2002 2001
£000 £000 £000 £000
Intangible Fixed Assets
Goodwill 2,875 -
Fixed assets
Tangible assets 176 121
3,051 121
Current assets
Debtors 2,373 2,092
Cash at bank and in hand 8,733 8,985
11,106 11,077
Creditors; amounts falling due within one year (2,197) (1,545)
Net current assets 8,909 9,532
Total assets less current liabilities 11,960 9,653
Capital and reserves
Called up share capital 1,747 1,581
Share premium account 8,504 8,493
Merger reserve 1,569 (1,123)
Other reserve 100 100
Profit and loss account 40 602
Equity shareholders' funds 11,960 9,653
Mission Testing plc
Group Cash Flow Statement
for the year ended 30 June 2002
Note 2002 2002 2001 2001
£000 £000 £000 £000
Net cash inflow from operating activities 4 1,090 96
Returns on investments and servicing of finance
Interest received 314 258
Interest paid (9) (85)
Net cash flow on returns on investments and servicing of finance 305 173
Taxation
Corporation tax paid (317) (129)
Capital expenditure
Payments to acquire tangible fixed assets (90) (112)
Cash acquired on acquisition of subsidiary 34 -
Acquisition of subsidiary (870) -
Equity dividends paid (429) (66)
Cash outflow before management of liquid resources and financing (277) (38)
Financing
Issue of ordinary shares 25 9,051
(Decrease) in debenture loans - (75)
Net cash inflow from financing 25 8,976
(Decrease)/increase in cash in the year (252) 8,938
Mission Testing plc
Notes to the preliminary results
for the year ended 30 June 2002
1 Basis of preparation
The financial information set out above 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 of Mission
Testing plc for the financial year ended 30 June 2001. Those accounts, upon
which the auditors issued an unqualified opinion and did not contain a statement
under section 237 (2) or (3) Companies Act 1985, have been delivered to the
Registrar of Companies. The statutory accounts for the year ended 30 June 2002
will be finalised on the basis of the unaudited financial information presented
by the directors in this preliminary announcement and will be delivered to the
Registrar of Companies following the Company's Annual General Meeting.
2 Dividends
2002 2001
£000 £000
Equity shares
Interim dividend paid 2002: 1.00 pence per share (2001: £480 per share) 172 48
Second interim dividend declared 2002: 1.50 pence per share, (2001: 1.50 pence per share) 262 257
434 305
The interim dividend paid for 2001 was paid to the shareholders of Mission
Testing Europe Ltd (now the wholly owned subsidiary of Mission Testing plc) for
the periods prior to the Group's flotation on AIM.
3 Earnings per share
2002 2001
Weighted average number of shares in issue - basic 16,976,620 13,824,792
Adjustment in respect of share options 378,004 407,424
Weighted average number of ordinary shares in issue - diluted 17,354,624 14,232,216
2002 Earnings £ Basic EPS Diluted EPS 2001 Earnings Basic EPS Diluted EPS
(pence) (pence) £ (pence) (pence)
Profit/(loss) for (127,979) (0.75) (0.75) 630,643 4.56 4.43
the financial year
Adjustments:
Goodwill 1,105,739 6.51 6.37 - - -
amortisation
charge
Operating 146,239 0.86 0.85 - - -
Exceptional items
Float related - - - 309,568 2.24 2.18
exceptional items
Tax credit (43,872) (0.26) (0.25) (54,480) (0.39) (0.38)
Adjusted earnings
and EPS 1,080,127 6.36 6.22 885,731 6.41 6.23
The adjusted diluted earnings per share are detailed in the above table. In the
Directors' opinion this best reflects the underlying performance of the group
and assists in the comparison with the results of earlier years. In accordance
with FRS 14 the weighted average number of shares in the period has been
adjusted to take account of the affects of all dilutive potential ordinary
shares.
For the purposes of the disclosures required by FRS14 'Earnings per share', none
of the potential ordinary shares are regarded as being dilutive as their
conversion would reduce the basic net loss per share. Consequently, the diluted
loss per share is the same as the basic loss per share.
4 Reconciliation of operating profit to net cash inflow from operating
activities
2002 2001
£000 £000
Operating profit before exceptional costs 173 1,104
Exceptional items (146) (310)
27 794
Depreciation 101 35
Amortisation of goodwill 1,106 -
Decrease / (Increase) in debtors 279 (534)
(Decrease) in creditors (423) (199)
Net cash inflow from operating activities 1,090 96
5 Acquisition of subsidiary
During the year the company acquired Specialist Testing Solutions Limited for a
total consideration of £3.54 million, comprising cash of £0.70 million and
1,516,188 shares at a price of £1.875 per share. The goodwill after acquisition
of £3.98 million is being amortised over three years resulting in a charge in
the year of £1.11 million.
This information is provided by RNS
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