Final Results
For immediate release on
13 August 2008
County Contact Centres PLC
Statement of results for the year ended 30 June 2008
CHAIRMAN'S STATEMENT
Operational highlights
-
Turnover increased by 10% to £3,947,385 in a difficult trading period
-
CallScripter turnover increased by 40% in the year to £703,263
-
Profit before tax increased to £392,202 in the year compared to a previous year profit of £353,918
-
Additional resources invested in CallScripter division
-
Net cash balance of £309,514 at year end
-
IP3Telecom network telephony division formed
-
First set of statements prepared under the International Financial Reporting Standards
-
Share Premium Account cancelled
-
Additional non-executive director appointed
Financial summary
The board is pleased to report continued growth in both sales and profit before tax against an economic climate, which is becoming gloomier by the day, with each part of the group contributing to this success. CallScripter has gained large client software sales, both home and abroad, whilst Ansaback has continued to grow its TV Shopping, Telecoms and Call Centre Partner channels.
As a result the group has declared record profits for the third successive year.
The Group profit before taxation for the year to June 2008 is £392,202 (June 2007: £353,918), achieved on turnover of £3,947,385 (June 2007: £3,572,059)
In preparing the figures for the year to 30th June 2008, we have made the transition from UK GAAP to International Financial Reporting Standards ("IFRS"). There are many changes in the way we report our results and, in particular, a review of the capitalisation of development costs was undertaken. This highlighted that the capitalisation of development costs is not discretionary under International Accounting Standard 38, if certain criteria are met, and therefore the capitalisation and amortisation of these costs is now mandatory. As such, the Group has capitalised and amortised the development work undertaken within the CallScripter division (note 9).
In addition, under IFRS a holiday pay provision must be accrued. As our holiday year runs from January to December, a provision is required each June, which is then released each December (note 9).
During the previous year the Company decided to reorganise its capital and held an Extraordinary General Meeting in June 2007 to obtain shareholder approval. Following subsequent court proceedings, the capital re-organisation became effective on the 6th August 2007. All of the costs of the capital re-organisation have been charged to the Income Statement in the previous year. This reorganisation has a positive effect on both the Group and Company Balance Sheets, as well as allowing the Company to pay dividends in the future if the Board consider it appropriate to do so.
Risks
A key risk within Ansaback is the technology utilised in the call centre and as such we have invested in a 'state of the art' modern telephone switch. This new switch includes fail-over systems to further increase our business continuity / disaster recovery readiness whilst also enabling us to offer additional services to clients. Looking at other risks, to lower our susceptibility to power outages, we have a standby generator in case of power cuts, while our main computer systems have been upgraded to improve their resilience and minimise any down-time should a problem arise. Finally, the consumer downturn may have a knock-on effect on the volumes of calls for our TV shopping channel clients, reducing the sales in this sector.
The risks to the CallScripter division continue to be in the ability of our internal sales team and the partner resellers to achieve market penetration. We are confident that the sales targets can be achieved. The board is keen to capitalise on the current CallScripter momentum and is actively encouraging the executive team to push on with significant investment and resourcing in the division. This effort may result in a flattish CallScripter profit for the year ahead, but with the second year yielding the benefit.
Change of name
In light of the varied component parts of the Group we now feel it appropriate to de-emphasise the call centre within the parent company and are proposing to change the name to IPPlus PLC at the Annual General Meeting in September.
IP has a number of significant meanings within the industry including, Internet Protocol, and Intellectual Property as well as IP being the Ipswich postcode. In this way the new name will travel well across borders whilst still offering a strong sense of ownership with the staff at the front-line.
Dividend and articles of association
The Company will not be declaring a dividend. The Board considers it is appropriate to conserve cash against the present background of restricted credit markets. Further the Board believes the cash balance will enable it to take advantage of any opportunities to acquire distressed businesses.
Additionally the Company will be proposing a change to its Articles of Association at the Annual General Meeting in September to provide the authority to buy-back shares if this is deemed appropriate in the future.
Outlook
There are difficult trading times ahead, but with the addition of the new CallScripter Sales Executives and the new Ansaback General Manager we expect to make further progress.
In addition, we are pleased to welcome Stephen Allen as a non-executive director of the Group. Stephen has experience of selling software products on a global basis and will add significantly to the resources available to our software division. He has already made an effective contribution to the Group and we look forward to his continued advice.
Whilst the outlook is challenging, the directors believe that the Group is strongly based and they remain cautiously confident.
Philip Dayer
13th August 2008
BUSINESS REVIEW
Business summary
County Contact Centres PLC operates through two principal subsidiaries, County Contact Centres (UK) Limited and CallScripter Limited.
The Group trades under two main trading styles namely Ansaback and CallScripter.
Ansaback is a 24 hours a day, 7 days a week bureau telephony service providing overflow and out of hours call handling, emergency cover, dedicated phone resources, non-geographic, low call and freephone telephone facilities as well as disaster recovery lines and other ancillary telecommunication services.
CallScripter is an enhanced customer interaction software suite specifically developed for contact centres, telesales and telemarketing operations. Our clients gain major benefits by introducing CallScripter's dynamic scripting environment into their organisation. The software facilitates the rapid set-up, handling and reporting of sophisticated inbound, outbound and e-mail campaigns.
Key performance indicators
The Group performance is monitored using the following key financial performance indicators which are measured against budget and forecasts
2008 2007
£ £
Revenue 3,947,385 3,572,059
Profit before taxation 392,202 353,918
Cash and cash equivalents 309,514 413,890
The market
Our call centre, operating a 24/7 bureau service, is well placed to capture new customers who need overflow and out of hours support, but may not have the volume to justify a full blown offshore facility. As some (notably larger) clients do not wish to advertise the fact that they outsource, our client list remains confidential, but includes blue chip companies, TV shopping channels, London solicitors and high profile charities plus, of course, a wide spectrum of business users from across the UK.
The push towards eco-friendly working practices, coupled with the recent surge in fuel costs affecting many businesses, may have a positive knock on effect to the call centre industry. The ability to route calls at Network level from office to office and field workers if un-answered and then overflow to a bureau call centre is likely to gain traction with some calls being diverted to home workers. The home worker could either be a direct employee or an external contractor via an agency. An example of this could be a London firm who wished to increase its eco friendliness and achieve a carbon neutral standing by outsourcing its call handling to this 'ultra green' networked call centre whose carbon footprint is very negligible. CallScripter has been directly involved in just such a move, selling our CallScripter software to a company that emphasises its green credentials by serving calls at network level to its agents, all of whom are home based.
Review of operations
Ansaback
Once again progress has seen turnover rise and costs continue to be diligently controlled.
With several new account wins, billable minutes have risen and a total of 19 other call centres now use Ansaback for overflow, weekend, business continuity and disaster recovery plans.
The call volumes were up 5%, compared to last year, while client numbers remained consistent with no key account desertions. As we have a significant number of TV shopping and mail order clients, we eagerly awaited the upturn in calls relating to the Christmas season. Unfortunately, one major TV client was quieter than in the previous year and we saw a 4% fall in October calls. However, as has been customary, November became a new record high for billable minutes and this momentum carried on into December resulting in a satisfactory outcome for the division. Overall however the sales increase was not as hoped.
The Ansaback sales director returned from maternity leave in August 2007 and subsequently left the Group in October 2007. A new Ansaback general manager joined in May 2008 with a wide ranging brief.
The outlook for new contracts remains good enabling us to continue building the business. These contracts, along with the retention of our client base, are key to the continued profitable progress of this division.
Despite the credit crunch the seasonal jump caused by TV shopping duly arrived in November and the call centre was humming with fervent activity.
The momentum carried on with new campaigns from various companies fuelled by a burst of activity from the charity sector.
The ability to switch calls at network level seamlessly provides both our and other call centre's clients with the option of having more than one call centre working for them. This process of maximising the returns and responsiveness to media advertising remains a strong driving force, as a client advertising on a television shopping channel will be looking for an answering response rate as near to 100% as possible. This high level can only be achieved by using modern systems, as well as multiple call centres. Outsourcing increases the flexibility of capacity required by clients and alleviates the necessity for large investment to set up in house call centres. Independent call centres are focused to offer a better service as their core competence, monitored by tough client KPI's showing demonstrable results.
We continue to remain at the forefront of out of hours fault repair logging and this is another area which we have developed and requires slightly more specialist agent knowledge. We joined the Federation of Communication Services and attended their conferences promoting our specialist services.
We use our in-house developed CallScripter software package, which enables our agents to handle the vast array of calls presented. Scripts have a client graphic or picture on the front screen providing an auto-cognitive focus helping the agent identify with the client's business activity.
We continue to provide clients with detailed data regarding call durations and outcomes, using our in-house developed CallScripter software package. Scripts are designed in a manner reflecting the client businesses, ensuring that the agent delivery reflects the culture of the client's organisation. Ansaback is monitored and controlled on the actual and predicted billable minutes and this Key Performance Indicator, as well as the number of agent call minutes per hour, is reviewed on a daily basis to ensure the correct levels of staff efficiencies within the call centre. We also scrutinise our Grade of Service and Percentage of Calls Answered to maintain our contracted Service Level Agreements of answering 80% of calls presented within 20 seconds.
Significant investment in new infrastructure has occurred during the period. The network has been upgraded and a new telephony switch has been installed and commissioned within the Ansaback back office environment. A staged role out across the call centre is being planned as we transfer over 3,000 client telephone numbers onto the new system. This new telephony platform will open up the world of VoIP (Voice Over Internet Protocol) to the call centre allowing us to explore new areas such as Internet call handling, advanced Interactive Voice Response functionality for automated call handling, natural speech recognition, enhanced call recording, agent home working and intelligent call routing between contact centres.
Our Internet data feed has also been upgraded from a 2Mbps to a 100Mbps bearer.
CallScripter
This division sells our software to other call and contact centres.
In autumn 2007 we attended our 7th Call Centre Expo, the principal showcase for suppliers to the call centre trade, which attracts both a domestic and international audience looking for the latest offerings. We followed this up by attending GC 2008expo which is the leading public sector IT event in the UK, where public servants come to see the very latest technologies in action and to discover the solutions to the challenges they face within government.
In the past we have been diffident regarding the inordinate delays in decision making within the public sector despite good interest. We now think the time is right for us to give the sector a concerted push.
In the interim accounts we reported that CallScripter had broadened its channels to market and in this regard we have pushed forward with the network hosted (Application Service Provider) route (now commonly referred to as SaaS - Software as a Service) which allows businesses to use the product on a "needs basis" without either complex licence or in house technical support. We already have six clients signed up and using this service and whilst this is still early days it would seem to provide a low cost entry model for using CallScripter which suits a number of clients where their internal IT resource is limited. Internationally it also enables us to offer a low cost direct channel and we anticipate further growth in the coming year.
Similar to previous years, we were invited as guests of Interactive Intelligence (ININ), our American OEM (Original Equipment Manufacturer) distributor, to their annual EMEA conference held in Vienna to meet both existing and new ININ distributors. This was a successful event and provided introductions to an audience that would have been difficult to meet without the partnership. Post the Vienna conference we have already attended substantive collaborative presentations in Turkey.
Steve Allen, our new non-executive, has been instrumental in a procedural overview and we have actively embarked upon a recruitment campaign to bolster the division to ensure recent contracts are satisfactorily handled. The pipeline has several encouraging prospects both domestically and internationally.
Two prestigious orders have recently been won and successfully installed. The first was a Cypriot bank and the second a substantial world theme park operator. Both of these installations have the potential to be further rolled out throughout the respective organisations and produce ongoing revenues.
The outlook for our call centre software remains positive as contact centres look to their software solution providers for increasing agent performance and maximising their profitability.
IP3Tele.com
We currently provide a range of network based interactive call services on a managed basis and are now able to offer a self-serve option. With this clients can route their required services through our web portal, which allows them to monitor their call traffic in real time or have periodic reports sent via email. Our web portal allows fast and efficient configuration of services with detailed logging for reviewing changes and are hosted across resilient platforms with triple redundancy for location, infrastructure and service providers. Web access also allows remote management from anywhere in the world, without any proprietary software requirement.
Social responsibilities and green initiatives
The company employees support a designated charity throughout the year and raised £1,100 for the Alzheimer's Society.
Looking ahead
Both sides of our business will continue to push forward with exciting prospects.
Ansaback will be focusing on further development of the Ansaback Plus up-selling service and telephone fault logging services - areas where we feel we have a unique selling point, while CallScripter will continue to target new revenue streams with reselling partners and other software manufacturers as well as increasing the existing revenue streams from both the OEM and direct sales.
William A Catchpole
13th August 2008
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30th JUNE 2008
Note 2008 2007
£ £
Continuing Operations
Revenue 3,947,385 3,572,059
Cost of sales (1,970,925) (1,802,932)
Gross profit 1,976,460 1,769,127
----- -----
Administrative expenses (1,600,486) (1,417,135)
----- -----
Operating profit 375,974 351,992
Finance income 6 22,426 10,962
Finance expenditure 7 (6,198) (9,036)
----- -----
Profit before taxation 5 392,202 353,918
Taxation 12 180,566 50,558
----- -----
Profit for the year 572,768 404,476
Attributable to:
Equity holders of the parent company 572,768 404,476
Basic and diluted earnings per share 11 1.92p 1.36 p
All activities of the Group are classed as continuing.
There were no recognised gains or losses for the year other than the profit disclosed above.
The accompanying accounting policies and notes form an integral part of these financial statements.
CONSOLIDATED BALANCE SHEET
AS AT 30th JUNE 2008
Note 2008 2007
£ £
ASSETS
Non-current assets
Intangible assets 13 222,252 182,770
Plant and equipment 14 259,715 79,727
Deferred taxation 18 280,000 76,000
Non-current assets 761,967 338,497
Current assets
Trade and other receivables 15 943,826 660,243
Cash and cash equivalents 309,514 413,890
Current assets 1,253,340 1,074,133
Total assets 2,015,307 1,412,630
LIABILITIES
Non-current liabilities
Long-term borrowings 17 (3,781) (34,564)
Deferred taxation 18 (58,160) (34,726)
Non-current liabilities (61,941) (69,290)
Current liabilities
Trade and other payables 16 (614,793) (544,156)
Current portion of long-term borrowings 16 (30,783) (64,162)
Current liabilities (645,576) (608,318)
Total liabilities (707,517) (677,608)
Net assets 1,307,790 735,022
EQUITY
Equity attributable to
equity holders of the parent
Share capital 297,908 297,908
Share premium account - 6,045,563
Other reserves 18,396 18,396
Profit and loss account 991,486 (5,626,845)
Total equity 1,307,790 735,022
═ ═
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30th JUNE 2008
2008 2007
£ £
Cash flows from operating activities
Profit for the year 572,768 404,476
Adjustments for:
Interest income (22,426) (10,962)
Interest expense 3,802 6,233
Interest element of finance leases 2,396 2,803
Deferred tax provision (180,566) (65,558)
Tax expense - 15,000
Depreciation 40,222 36,252
Amortisation of intangible assets 83,677 45,991
Increase in trade and other receivables (283,583) (169,799)
(Decrease)/increase in trade and other payables (9,727) 78,058
Cash generated from operations 206,563 342,494
Interest paid (3,802) (6,233)
Interest element of finance leases (2,396) (2,803)
Tax paid - (15,000)
Net cash generated from operating activities 200,365 318,458
Cash flows from investing activities
Interest received 22,426 10,962
Capitalisation of development costs (108,121) (100,948)
Customer contracts purchased (15,038) -
Purchase of property, plant and equipment (148,769) (51,250)
Net cash used in investing activities (249,502) (141,236)
Cash flows from financing activities
Repayment of borrowings (46,667) (50,000)
Capital element of finance leases (8,572) (13,224)
Net cash used in financing activities (55,239) (63,224)
Net (decrease)/increase in cash (104,376) 113,998
Cash at beginning of year 413,890 299,892
Net (decrease)/increase in cash (104,376) 113,998
Cash at end of year 309,514 413,890
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30th JUNE 2008
|
|
Share Capital |
Share Premium |
Other Reserves |
Profit And Loss Account |
Total Equity |
|
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
Balance at 1st July 2006 |
297,908 |
6,045,563 |
18,396 |
(6,031,321) |
330,546 |
|
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
404,476 |
404,476 |
|
|
---- |
---- |
---- |
---- |
---- |
|
Total recognised income and expense for the period |
- |
- |
- |
404,476 |
404,476 |
|
|
---- |
---- |
---- |
---- |
---- |
|
Balance at 30th June 2007 |
297,908 |
6,045,563 |
18,396 |
(5,626,845) |
735,022 |
|
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
572,768 |
572,768 |
|
|
---- |
---- |
---- |
---- |
---- |
|
Total recognised income and expense for the period |
- |
- |
- |
572,768 |
572,768 |
|
Capital reorganisation |
- |
(6,045,563) |
- |
6,045,563 |
- |
|
|
---- |
---- |
---- |
---- |
---- |
|
Balance at 30th June 2008 |
297,908 |
- |
18,396 |
991,486 |
1,307,790 |
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30th JUNE 2008
1 AUTHORISATION OF FINANCIAL STATEMENTS
The Group's consolidated financial statements (the "financial statements") of County Contact Centres PLC (the "Company") and its subsidiaries (together the "Group") for the year ended 30th June 2008 were authorised for issue by the Board of Directors on 13th August 2008 and the Managing Director, William Catchpole and the Financial Director, R.Stuart Gordon signed the balance sheet.
2 NATURE OF OPERATIONS AND GENERAL INFORMATION
County Contact Centres PLC is the Group's ultimate parent company. It is a public limited company incorporated and domiciled in the United Kingdom. County Contact Centres PLC's shares are listed and publicly traded on the AIM division of the London Stock Exchange. The address of County Contact Centres PLC's registered office is also its principal place of business.
The Company operates principally as a holding company. The main subsidiaries are engaged in the provision of a 24 hours a day, 7 days a week out of hours and overflow telephony service and the development and sale of call centre contact relationship management software.
3 STATEMENT OF COMPLIANCE WITH IFRS
These financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and the requirements of IFRS 1 "First-time Adoption of International Financial Reporting Standards", because they are for the period covered by the Group's first IFRS financial statements for the year ended 30th June 2008. The financial statements were prepared in accordance with UK GAAP until 30th June 2007. The date of transition to IFRS was 1st July 2006. The comparative figures in respect of 30th June 2007 have been restated to reflect changes in accounting policies as a result of the adoption of IFRS. The disclosures required by IFRS 1 concerning the transition from UK GAAP are given in the reconciliation schedules and explained in note 10.
The principal accounting policies adopted by the Group are set out in Note 4. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these financial statements.
The following Standards and Interpretations have been issued, but not yet effective and have not been adopted early by the Group:
-
IAS 1: Presentation of Financial Statements (revised 2007) (effective 1st January 2009)
-
IAS 23: Borrowing Costs (revised 2007) (effective 1st January 2009)
-
Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation (effective 1st January 2009)
-
IAS 27: Consolidated and Separate Financial Statements (revised 2008) (effective 1st July 2009)
-
Amendment to IFRS 2: Share-based Payment - Vesting Conditions and Cancellations (effective 1st January 2009)
-
Amendments to IFRS 1: First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements - Costs of Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1st January 2009)
-
Amendment to IAS 39: Financial Instruments: Recognition and Measurement - Eligible Hedged Items (effective 1st July 2009)
-
Improvements to IFRSs: (effective 1st January 2009 other than certain amendments (effective 1st July 2009):
-
IFRS 3: Business Combinations (revised 2008) (effective 1st July 2009)
-
IFRS 8: Operating Segments (effective 1st January 2009)
-
IFRIC 12: Service Concession Arrangements (effective 1st January 2008)
-
IFRIC 13: Customer Loyalty Programmes (effective 1st July 2008)
-
IFRIC 14: IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their interaction (effective 1st January 2008)
-
IFRIC 15: Agreements for the Construction of Real Estate (effective 1st January 2009)
-
IFRIC 16: Hedges of a Net Investment in a Foreign Operation (effective 1st October 2008)
The directors anticipate that the adoption of these standards and interpretations in future periods will have no material effect on the financial statements of the Group, except for additional disclosures and amendment to presentation as required by IAS 1.
4 ANNUAL REPORT AND ACCOUNTS
The above summary of results for the year ended 30th June 2008 does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed with the Registrar of Companies in due course; the independent auditors' report on those financial statements under Section 495 of the Companies Act 2006 is unqualified and does not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
The annual report and accounts of the Company is being posted to shareholders next week and will be made available on the Company's website shortly at www.countycontactcentres.com.
For further enquiries:
William Catchpole - Managing Director (01473 321 800)
Stuart Gordon - Finance Director
Richard Evans - Brewin Dolphin Ltd, Nominated Adviser (0845 213 4853)
ENDS
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