Final Results

RNS Number : 3964X

IPPlus PLC

13 August 2009

 



IPPlus PLC 

(formerly County Contact Centres PLC)

Statement of results for the year ended 30 June 2009  

Operational Highlights

• Turnover fractionally up at £3,972,725 in a turbulent trading period

• Half year position recovered to produce an annual profit

• Measures implemented in December resulted in second half stability

• Profit before tax of £10,846 in the year compared to a previous year profit of £392,202

• Closing cash at 30th June 2009 of £421,119

• Company name changed to IPPlus PLC on 29th September 2008 

Financial Summary

The board is pleased to report that the measures outlined in the December 2008 Interim Statement have had the required effect, stabilising the business, recovering the first half loss and producing a small profit for the year in what has been widely described as unprecedented difficult economic conditions. Our markets remain incredibly tough, with fierce competition for all business regardless of size of contract, while our call centre partner's overflow traffic has reduced as a consequence of their own telephony traffic falling back. However the business has performed well in the second half and we are pleased to report that in June 2009 Ansaback billable minutes were higher than June 2008. This strong performance continued into July 2009.

The Group profit before taxation for the year to June 2009 is £10,846 (June 2008: £392,202), achieved on turnover of £3,972,725 (June 2008: £3,947,385)

Risks

The risks to the CallScripter division continue to be in the ability of our sales team and the partner resellers to achieve market penetration. Channels to market are a fierce battleground for all the suppliers keen that their product is seen as pre-eminent in the line up of products offered from consolidators bundling call handling solutions.

The main risk within Ansaback is the exposure to the failure of a major client, as approximately 10% of the clients account for 75% of the recent turnover. Care is taken within the credit control methods to minimise this exposure, with bad debts remaining at a low level in the year.

Additional risks include the technology utilised in the call centre and as such we have installed 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.

Name Change

At the AGM on 29th September 2008 it was agreed to rename the Company as IPPlus PLC.www.ipplusplc.com

Dividend

The Company will not be declaring a dividend.

Outlook

While the media may be reporting green shoots of recovery in certain sectors, there are difficult trading times ahead. We continue to press on with determination in each of our divisions to build sales, and improve profitability.

Last year we welcomed Stephen Allen as a non-executive Director of the Group and we can now report that Peter Brown, current non-executive director and a previous Chairman of the Group, will be stepping down at the AGM. Peter has served the company for over 9 years and has seen it transform from an unquoted fledgling internet business to the AIM quoted business of today. The Board would like to thank Peter for his assistance, direction and tremendous support over the years and wish him well for the future. 

I would also like to take this opportunity to thank the staff for their commitment and efforts in the last year. During the difficult period around the interim accounts the staff were asked to consider rebalancing their working practices to assist the company and this was enthusiastically accepted. This allowed the company to navigate the uncertainty whilst still retaining the skill sets ready for when our fortunes change. As such we are now well positioned to cope with increased business.

Whilst the outlook remains challenging, the Directors remain confident about the future prospects for the Group. 

Philip Dayer

13th August 2009

BUSINESS REVIEW

Business Summary

IPPlus PLC operates through two principal subsidiaries, IPPlus (UK) Limited and CallScripter Limited. 

The Group trades under three trading styles namely CallScripter, Ansaback and IP3 Telecom.

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 and advanced reporting software into their organisation. The software facilitates the rapid set-up, handling and reporting of sophisticated inbound, outbound and e-mail campaigns.

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.

IP3 Telecom is the telephony services arm of the Ansaback business providing a range of network level interactive call services. With options for self-sufficiency or fully managed services, the platform gives the user the ability to run a professional call handling operation without the necessity for expensive hardware, installation, and on-going maintenance costs. Clients can route their required services through our web portal, allowing them to monitor their call traffic in real time or have reports sent periodically by email, fax or text.

The platform allows for fast and efficient configuration of services, with most functions available to go live at the push of a button. Web access also allows remote management from anywhere in the world, without any proprietary software requirement. We have triple redundancy in place covering location, infrastructure and service providers. This minimises the chance of any client down time and is key to the resilience of the platform.

Key performance indicators

The Group performance is monitored using the following key financial performance indicators which are measured against budget and forecasts:

		2009	2008
		£	£
Revenue		3,972,725	3,947,385
Profit before taxation		10,846	392,202
Cash and cash equivalents		421,119	309,514
		════════	════════

The Market

Despite the unprecedented turbulence both in the UK economy and more widely in the international market place, call centres remain an important characteristic of the modern business enterprise. Call centre technology continues to evolve at pace and a bewildering array of options are now available to the managers of these modern day workplaces. 

Clients and prospective clients looking at cost savings in these difficult times explore exhaustively outsourcing some or all of their work to call centres. Quoting for this business can be time consuming requiring meetings and then submission of lengthy documentation. Similarly the call centres looking to improve their performance must justify expenditure on upgrading the 

kit they purchase and therefore the tender process can become quite lengthy with a string of hoops; (RFI) Request for information, (PQQ) Pre-Qualification Questionnaire, (RFP) Request for proposal, (ITT) Invitation to Tender, web demonstrations, live demonstrations, quotations and then final order.

Our call centre, operating a 24/7 bureau service, is well placed as it has a broad range of clients requiring different services which provides a degree of insulation from sector specific influences. The diversity of clients using CallScripter software both domestically and internationally also provides a cushion from being sector specific.

IP3 Telecom now have 53 clients on its network platform which offers the ability to set up sophisticated call ringing plans which can route client's network level calls from office to office, and then if needed to field workers, with some calls being diverted to home workers and ultimately an outsourced call centre such as Ansaback. In addition services such as IVR (Interactive Voice Response) and call recording enhance the sticky nature of the service. Whilst the market for this type of service is quite mature the key to winning clients is quality and ease of the service provision.  

Review of Operations

CallScripter

This division sells our software to other call and contact centres both domestically and internationally on a direct basis and through various re-seller channels.

As reported in the Interim Report, on the strength of the previous year's performance the Board implemented an expansion programme. The cost of new staff, coupled to annual pay reviews carried out in June 2008, substantially increased our monthly overheads whilst expected growth in revenue increases ebbed as the recession started to bite. The Board immediately undertook a strategic review and implemented a cost reduction programme to ensure that the company was able to weather the economic downturn without cutting so far that we would have been unable to cope when the economy started to turn around. The first act was to down-size the newly expanded sales and marketing team and consequently 3 new CallScripter positions were cut.

Despite the division's reduced sales team, and the market battening down its purchasing hatches, we have secured new business while a number of the existing client base have increased their licences producing a better than envisaged final outcome. It has been hard fought business as all manner of discounting and promotional techniques have been used by the competitors. In spite of this we increased our turnover in the year.

Whilst it may not be a total recovery there are business opportunities to win and in that regard we have decided to rebook the NEC Call Centre Expo 2009 showing our commitment to the sector. Last year's autumn Call Centre Expo showed the industry putting on a brave face with thin pickings all round in terms of qualitative enquiries. However despite this we have deemed it 

sufficiently prominent to warrant attendance as it is the principal showcase for suppliers to the call centre trade, and attracts both a domestic and international audience looking for the latest offerings. We followed this up by attending our second Government Contract Expo - GC 2009expo, the leading public sector IT event in the UK, incorporating Information Communications and Technology (ICT). As previously, this show yielded enough positive enquiries to warrant attendance although the lead time between enquiry and order is guaranteed to be frustratingly long despite Governments being anxious to improve departmental efficiencies.

With our increasing number of foreign installations and 27% of CallScripter revenue being foreign we decided to attend Call Centre World in Berlin as a first step to expanding our international channels to market. Time will tell if this move will bear fruit but several collaborative meetings indicate the value of attending this premier European event. One of CallScripter's latest features, specifically designed to assist this international push, is the "Language File" which enables script builders to choose which language they wish to work in. We currently have 5 completed language files covering French, German, Russian, Spanish and Turkish. 

Part of the CallScripter channels to market is the network hosted (Application Service Provider) route now commonly referred to as SaaS - Software as a Service. This allows businesses to use the product on a "needs basis" without either complex licences or in house technical support. Clients using this method have access to a low cost entry model which suits a number of customers when their internal IT resource is limited. Internationally this also enables CallScripter to offer a low cost direct channel and like many other software vendors we anticipate further growth via this channel in the coming years. 

In the second half of the year we concluded an agreement with Nixxis Group SA to integrate CallScripter within the Nixxis Interaction platform (a modern switch). Whilst this is still in its infancy Nixxis have already purchased 1,500 licences and have many high profile clients throughout Europe and North Africa.

Last year we reported on two prestigious orders, a Cypriot bank and a substantial world theme park operator. Both of these installations have now been rolled out and produce ongoing revenues, whilst one of the companies has already ordered additional licences for their German operation and commissioned extensive bespoke work. This year we also won our first NHS Trust licensing agreement for 20 seats which we plan to promote as a beacon of excellence.

Despite market jitters the outlook for our call centre software remains positive as contact centres look to their software solution providers for increasing agent performance and maximisation of profits. The sales pipeline has several encouraging prospects, both domestically and internationally, with one particular existing council client, managed by Voicetec, planning to roll out throughout Holland.  

Ansaback

Turnover has remained fairly stable, with continued client loyalty and new clients adding minutes in the second half, combined with our costs being diligently controlled, assisting the return to the Group's profitability.

The credit crunch struck hard in the retail sector, as witnessed by the demise of several well known high street brands. We felt the chill wind of this sector's difficulties and as a result saw a significant drop in call minutes in the run up to Christmas. In addition our call centre partners were able to handle more calls themselves and as such we ended up with less overflow traffic. The majority of the call centre partners continue using Ansaback for overflow, weekend, business continuity and disaster recovery plans. 

Our figures show that despite ongoing difficult economic conditions, we have been able to recover lost minutes and maintain call volumes in our market. 

At the same time, the current recession has forced most clients to examine costs and demand increased value from their services with us. We have been able to respond by increasing agent performance for orders and up-sells, which in turn should increase client retention and provide better opportunities to win further business from referrals in these competitive sectors.

The outlook for new contracts remains good enabling us to continue building the business. These contracts, along with the retention of our Blue Chip client base, are key to the continued profitable progress of this division. It would appear that the drop in interest rates and the generally brighter outlook has prevented a full scale downward slide with call volumes rallying to end with a very un-characteristic all time high in June and July 2009.

Our client services team take responsibility in ensuring smooth flow of data and day to day account management with their respective client counterparts as we view this close co-operation to be pivotal in retaining major clients. Price may be important but for some clients quality of service is always going to be the deciding factor. We have steered away from the high volume, churn and burn, philosophy and whilst at peak periods of the day our agents may talk for 45 minutes in the hour, the average is somewhat less, resulting in lower than average staffing metrics within the call centre. This ultimately benefits our clients who know the workforce is knowledgeable and stable. We provide detailed data in a variety of mediums to our clients regarding call duration and call outcome, and whilst some clients are anxious not to have long calls, which obviously cost them money as we charge per minute, our prime concern is the quality of the call and the accuracy of the data collected. 

Within Ansaback our Eco Repair Services department continues to remain at the forefront of out of hours fault repair logging. There has been some consolidation in this space with the mergers and takeovers resulting in a slight drop in overall total clients.

We continue to provide clients with detailed data using the CallScripter software package. Scripts are designed in a manner reflecting the client businesses, including client graphics and logos on the front screen, 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. 

As reported last year we made a significant investment in new infrastructure. With the network upgraded and the new telephony switch fully commissioned the call centre can genuinely be called "modern" although we will continue to examine its rich features. 

IP3Telecom

IP3 Telecom is the telecommunications section of the Ansaback division. We currently provide a range of network based interactive call services to 53 clients. With our platform you can manage to route your required services through our web portal. You also have the ability to monitor call traffic real time or have periodic reports sent via e:mail. Our web portal allows fast and efficient configuration of services with detailed logging for reviewing changes. Our services are hosted across resilient platforms with triple redundancy for location, infrastructure and service providers. Web access allows remote management from anywhere in the world, without any proprietary software requirement. The business appears to be on a firm footing and we expect continued growth from this niche service.

Social Responsibilities

The company employees support a designated charity throughout the year and raised £1,328 for MacMillan Cancer Support.

In conjunction with a Government initiative and the Reed Employment Group we have taken on 6 long term unemployed for training which has resulted in 3 recruits holding down positions for over 6 months. We also received a Rotary Exchange visitor from the Philippines interested in how a UK call centre works.

Looking ahead

Our businesses are all fortunate to be in sectors which, whilst affected by the recession, have been able to regain lost ground and are now ready to push forward after returning to sustained profitability. 

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 (Original Equipment Manufacturer) and direct sales, whilst Ansaback will continue to focus on the development of key sectors where we have a strong understanding and presence in the sector.

In May 2010 we reach the end of our 10 year lease on the building and are currently considering the best options for the future of the business.

William A Catchpole

13th August 2009

   CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30th JUNE 2009

	2009		2008
	£		£
Continuing Operations
Revenue	3,972,725		3,947,385
Cost of sales	(2,201,305)		(1,970,925)
	-----		-----
Gross profit	1,771,420		1,976,460
Administrative expenses	(1,768,348)		(1,600,486)
	-----		-----
Operating profit	3,072		375,974
Finance income	9,028		22,426
Finance expenditure	(1,254)		(6,198)
	-----		-----
Profit before taxation	10,846		392,202
Taxation (charge)/credit	(6,067)		180,566
	-----		-----
Profit for the year	4,779		572,768
	════════		════════
Attributable to:
Equity holders of the parent company	4,779		572,768
	════════		════════
Basic and diluted earnings per share	0.02p		1.92p

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 2009

		2009		2008
		£		£
ASSETS
Non-current assets
Intangible assets		240,910		222,252
Plant and equipment		215,542		259,715
Deferred taxation		280,000		280,000
		────────		────────
Non-current assets		736,452		761,967
		────────		────────
Current assets
Trade and other receivables		851,155		943,826
Cash and cash equivalents		421,119		309,514
		────────		────────
Current assets		1,272,274		1,253,340
		────────		────────
Total assets		2,008,726		2,015,307
		────────		────────
LIABILITIES
Non-current liabilities
Long-term borrowings		-		(3,781)
Deferred taxation		(64,227)		(58,160)
		────────		────────
Non-current liabilities		(64,227)		(61,941)
		────────		────────
Current liabilities
Trade and other payables		(628,149)		(614,793)
Current portion of long-term borrowings		(3,781)		(30,783)
		────────		────────
Current liabilities		(631,930)		(645,576)
		────────		────────
Total liabilities		(696,157)		(707,517)
		────────		────────
Net assets		1,312,569		1,307,790
		════════		════════
EQUITY
Equity attributable to  equity holders of the parent
Share capital		297,908		297,908
Other reserves		18,396		18,396
Profit and loss account		996,265		991,486
		────────		────────
Total equity		1,312,569		1,307,790
		════════		════════

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 30th JUNE 2009

		2009		2008
		£		£
Cash flows from operating activities
Profit for the year		4,779		572,768
Adjustments for:
Interest income		(9,028)		(22,426)
Interest expense		298		3,802
Interest element of finance leases		956		2,396
Deferred tax provision		6,067		(180,566)
Depreciation		55,412		40,222
Amortisation of intangible assets		103,151		83,677
Decrease/(increase) in trade and other receivables		92,671		(283,583)
Increase/(decrease) in trade and other payables		92,640		(9,727)
		────────		────────
Cash generated from operations		346,946		206,563
Interest paid		(298)		(3,802)
Interest element of finance leases		(956)		(2,396)
		────────		────────
Net cash generated from operating activities		345,692		200,365
		────────		────────
Cash flows from investing activities
Interest received		9,028		22,426
Capitalisation of development costs		(121,809)		(108,121)
Customer contracts purchased		-		(15,038)
Purchase of property, plant and equipment		(90,523)		(148,769)
		────────		────────
Net cash used in investing activities		(203,304)		(249,502)
		────────		────────
Cash flows from financing activities
Repayment of borrowings		(15,000)		(46,667)
Capital element of finance leases		(15,783)		(8,572)
		────────		────────
Net cash used in financing activities		(30,783)		(55,239)
		────────		────────
Net increase/(decrease) in cash		111,605		(104,376)
		════════		════════
Cash at beginning of year		309,514		413,890
Net increase/(decrease) in cash		111,605		(104,376)
		════════		════════
Cash at end of year		421,119		309,514
		════════		════════

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30th JUNE 2009

	Share Capital	Share Premium	Other Reserves	Profit And Loss Account	Total Equity
	£	£	£	£	£
Balance at 1st July 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
	═══════	═══════	═══════	═══════	═══════
Profit for the period	-	-	-	4,779	4,779
	----	----	----	----	----
Total recognised income and expense for the period	-	-	-	4,779	4,779
	----	----	----	----	----
Balance at 30th June 2009	297,908	-	18,396	996,265	1,312,569
	═══════	═══════	═══════	═══════	═══════

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30th JUNE 2009

1.    AUTHORISATION OF FINANCIAL STATEMENTS

The Group's consolidated financial statements (the "financial statements") of IPPlus PLC (the "Company") and its subsidiaries (together the "Group") for the year ended 30th June 2009 were authorised for issue by the Board of Directors on 13th August 2009 and the Managing Director, William Catchpole and the Financial Director, R.Stuart Gordon signed the balance sheet. 

2.    NATURE OF OPERATIONS AND GENERAL INFORMATION

IPPlus PLC is the Group's ultimate parent company. It is a public limited company incorporated and domiciled in the United Kingdom. IPPlus PLC's shares are listed and publicly traded on the AIM division of the London Stock Exchange. The address of IPPlus 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.

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.

As of 30th June 2009, the following Standards and Interpretations have are in issue 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) 

• Group Cash-settled Share-based Payment Transactions - Amendment to IFRS 2 (effective 1st January 2010) 

• Amendment to IFRS 7 Financial Instruments: Disclosures - Improving Disclosures About Financial Instruments (effective 1st January 2009) 

• Improvements to IFRSs 2008 (effective 1 January 2009 other than certain amendments effective 1st July 2009) 

• Improvements to IFRSs 2009 (various effective dates, earliest of which is 1st July 2009, but mostly 2010) 

• IFRS 3 Business Combinations (Revised 2008) (effective 1st July 2009) 

• IFRS 8 Operating Segments (effective 1st January 2009) 

• 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) 

• IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1st July 2009) 

• IFRIC 18 Transfers of Assets from Customers (effective prospectively for transfers on or after 1st July 2009)

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 2009 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 on 19 August 2009 and will be made available on the Company's website shortly thereafter at www.ipplusplc.com

For further enquiries:

William Catchpole - Managing Director                                                   (01473 321 800)

Stuart Gordon - Finance Director

Mark Brady - Brewin Dolphin Ltd, Nominated Adviser                               (0845 213 4730)

ENDS

 

END

 

 

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