Final Results

COUNTYWeb.com PLC 3 August 2001 COUNTYWEB.COM PLC PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS FOR THE YEAR ENDED 30th JUNE 2001 CHAIRMAN'S STATEMENT Since my appointment as Chairman on 22nd June, the company has taken some strategic decisions, which are designed to increase the likelihood of our remaining in business after the annus horribilis that has wiped out so many dot.com businesses. Having built a technically highly successful and flexible site to support our ownership of virtually all the county domain names of Britain, we are promoting partnership deals to major organisations that have not invested in their own sites or, having done so, have discovered that the cost of maintaining them is prohibitive. We are initiating discussions with several national and strong regional organisations who are considering co-sponsoring our database in the geographic areas of interest to them. We realise that shareholders have had an extremely rough ride since our initial public offering. This has of course also affected the board who have all suffered severe reductions in the value of their holdings. Unlike many comparator companies whose directors' remuneration has risen during this period, we have not only frozen directors' salaries but have implemented a reduction from the 1st July of 10% for myself and the managing director and slightly lower percentages for the other executive directors. In addition, 85% of executive option holders, including all the directors, have given back all the options issued to them on or before flotation. With these options hopelessly under water, the shareholders could say there is little sacrifice. However, unlike boards of more illustrious companies, we are not re-issuing or re-pricing options at today's depressed value and will only reintroduce the scheme, with your consent, when we can give shareholders positive news on the company's future. We have had several potential discussions with companies interested in acquiring our cash and quotation but we see little benefit to shareholders in recommending equity, which is almost as volatile as our own, in exchange for hard assets of cash, a highly successful database and our valuable library of domain names. The future is unclear. However, we now have a significant new operation, ANSABACK, are receiving tentative but sensible approaches from those interested in the company, and have reduced our overheads in the light of current income projections. There will, I am afraid, be no dividend declared for the year to June 2001 or for the year ahead. The Managing Director's business review overleaf gives more information on developments during the past year, as I wanted to concentrate on the way forward and not the past. Keith Richmond, my predecessor, retired from the board on 22nd June, having led the company during its initial period as an independent quoted AIM business. The board is very conscious of the huge contribution he made and wishes him well in his future business undertakings. Peter Brown Chairman 2nd August 2001 BUSINESS REVIEW Since our interim results statement of 16th March, in which we drew attention to the 'rapidly deteriorating climate for companies involved in the Internet sector' the turbulence has continued unabated. The COUNTYWeb Directory remains popular amongst users, with traffic consistently over 2 million page impressions per month. However, the ability to attract significant numbers of enhanced entries, along with severe pricing competition on our other revenue streams, led the Board on the 11th June to announce a strategic review with regard to the future of the directory. Further directory development work was suspended allowing the Group to conserve its remaining cash resources. The core database provides a barrier to entry and is a major reason as to why the site not only remains popular but also why our market has not been swamped by huge numbers of competing sites. The sites which we believe to be our main competitors, as mentioned in the AIM admission document, remain: - yell.co.uk, thomweb.co.uk, 192enquiries.com, scoot.com and askalex.co.uk (now askalix.com). Gross turnover on the directory side of the business has increased from £ 227,000 to £489,000 with the number of enhanced entry subscribers rising from 1,900 to over 4,500. These include many nationally well-known companies who perceive the value we offer in their marketing mix. The use of the Equifax and Dun & Bradstreet functions have all shown promise but have failed to deliver expected substantive e-commerce commissions. However, the tide may indeed turn and the directory may yet prove to be a long-term source of recurring revenues. In addition we continue to offer web hosting in our secure air-conditioned server room and the site has its own independent power supply and uninterrupted power supply systems. Overall the staff actively concerned with running the directory totals eight and we believe that the directory will cover its costs and contribute to the group overheads in the next year. Shortly after the publication of the interim results the Group concluded the acquisition of ANSABACK, a 24/7 message and call-centre service. This acquisition provided COUNTYWeb with a specialist overflow and out of hours message taking service and its associated software, and has now been consolidated within the Group's own operations at its offices in Ipswich. The ANSABACK business, whilst using new technology, is a service industry to other companies, providing a variety of telephony services. Client contracts contain some well-known names and it is the Group's intention to actively expand the sale of ANSABACK services, which contributed £135,000 of turnover to these results, by leveraging on the Group's larger offices and improved technical infrastructure. ANSABACK has been able to use the significant traffic of the COUNTYWeb directory to advertise its services and also utilise the database for targeting potential new clients. Since acquiring the business new accounts have been signed, which combined with the anticipated growth from the existing clients is encouraging for the division. The existing technical and telephone infrastructure, purchased for COUNTYWeb Directory sales, which primarily consists of out-bound calls, is adaptable to accommodate the ANSABACK operation, which is primarily in-bound work and the remaining technical team is currently in the process of altering these workstations and their associated software to provide a larger in-bound platform. This recent acquisition places us in a strong growth sector, and with the new operation now firmly integrated, the Board proposes to change the Company name to County Contact Centres PLC to reflect the new expanded nature of our business. CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30th JUNE 2001 Restated 2001 2001 2001 2000 £ £ £ £ Continuing Acquisitions Operations Gross Turnover 134,868 489,324 624,192 227,411 Deferred - (66,233) (66,233) (29,096) Income ----- ----- ----- ----- Turnover 134,868 423,091 557,959 198,315 Cost of sales - (114,145) (114,145) (28,568) ----- ----- ----- ----- Gross profit 134,868 308,946 443,814 169,747 Administrative (302,057) (4,066,673) (4,368,730) (1,276,723) expenses ----- ----- ----- ----- Operating loss (167,189) (3,757,727) (3,924,916) (1,106,976) Other interest 155,194 83,854 receivable and similar income Interest (3,139) (2,239) payable and similar charges ----- ----- Loss on (3,772,861) (1,025,361) ordinary activities before taxation Tax on loss on - - ordinary activities ----- ----- Loss on (3,772,861) (1,025,361) ordinary activities after taxation deducted ----- ----- Basic loss per (14.1) p (4.7) p share STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Restated 2001 2000 £ £ Loss for the financial year (3,772,861) (1,025,631) Prior year adjustment (29,096) - ----- ----- Total loss recognised since last financial (3,801,957) (1,025,631) statements ----- ----- CONSOLIDATED BALANCE SHEET AS AT 30th JUNE 2001 Restated 2001 2000 £ £ Fixed assets Intangible assets - 298,621 Tangible assets 213,658 289,305 ----- ----- 213,658 587,926 Current assets Debtors 750,733 330,415 Cash at bank and in hand 1,565,760 3,664,002 ----- ----- 2,316,493 3,994,417 Creditors: amounts falling due within one (1,143,206) (512,537) year ----- ----- Net current assets 1,173,287 3,481,880 ----- ----- Total assets less current liabilities 1,386,945 4,069,806 ----- ----- Capital and reserves Share capital 268,572 257,672 Share premium account 5,873,199 4,794,099 Other reserve 25,000 25,000 Merger reserve 18,396 18,396 Profit and loss account (4,798,222) (1,025,361) ----- ----- Shareholders' funds 1,386,945 4,069,806 ----- ----- CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30th JUNE 2001 Restated 2001 2000 £ £ Net cash outflow from operating activities (2,832,485) (598,409) Returns on investments and servicing of finance Interest received 155,194 83,854 Interest paid (3,139) (2,239) ----- ----- Net cash inflow from returns on investments and 152,055 81,615 servicing of finance ----- ----- Capital expenditure and financial investment Purchase of fixed assets (323,335) (732,886) Proceeds from sale of tangible fixed assets 9,523 9,000 ----- ----- Net cash outflow from capital expenditure and (313,812) (723,886) financial investment ----- ----- Acquisitions Purchase of ANSABACK business (194,000) - Cash acquired with COUNTYWeb business - 54,518 ----- ----- Net cash (outflow)/inflow from acquisitions (194,000) 54,518 ----- ----- Financing Proceeds from issue of new shares 1,090,000 5,606,500 Issue expenses - (756,336) ----- ----- Net cash inflow from financing 1,090,000 4,850,164 ----- ----- (Decrease) / Increase in cash (2,098,242) 3,664,002 ----- ----- Notes to the preliminary results 1. The financial information set out above does not comprise the Company's statutory accounts. Statutory accounts for the previous financial year ended 30 June 2000 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985. The auditors have given an unqualified opinion on the accounts for the year ended 30 June 2001 which will be delivered to the Registrar of Companies following the Annual General Meeting. 2. Copies of the audited statutory accounts will be available from the Company's registered office at Melford Court, The Havens, Ransomes Europark, Ipswich, Suffolk IP3 9SJ from 6 August 2001. Copies of the statutory accounts are being sent to shareholders on the same date. 3. These figures have been prepared in accordance with the same accounting policies used in the audited statutory accounts for the year ended 30 June 2001 and for the period ended 30 June 2000, save for turnover as set out below. During the year the accounting policy in respect of the recognition of subscription and advertising revenues was changed to recognise these revenues over the period to which the subscription and advertising relates. The previous policy was to credit these revenues to the profit and loss account when they were invoiced and not spread them over the period of the contract. The Directors believe that this policy should be changed because it is more appropriate to recognise revenues attributable to subscriptions and advertising over the period in which the Group has the obligation to maintain an enhanced directory listing and to provide the advertising. This change of accounting policy has given rise to a prior year adjustment of £29,096 and the comparative figures in these financial statements have been restated in accordance with the revised accounting policy. The impact of the change of accounting policy on the current year's result is to reduce turnover by £66,233.

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