Final Results

Eurolink Managed Services PLC 05 August 2002 EUROLINK MANAGED SERVICES PLC CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 31 MARCH 2002 Introduction and Results I am pleased to report results for the year ended 31 March 2002, with turnover up 11% to £9.23 million (2001: £8.27 million) and profit before tax at £155,000 (2001: £390,000). Earnings per share are 0.47p (2001: 2.57p). The Group has had a positive cashflow for the year of £207,000, compared to last years £18,000 and the year end cash at bank was £418,000. With the current uncertain market conditions the directors are retaining the cash balance to assist in managing the Group's working capital requirements and therefore , even with Group reserves standing at £578,000, a dividend is not being recommended. Business Review As reported in December 2001, business activity was improving as we went into the second half and this is reflected in turnover being 23% up on the first six months. The Group has introduced several new clients during the year and this has contributed to this increase. The overall gross margin was 21.0% compared to 23.9% last year as the mix of projects changed and this, together with maintaining the overall level of infrastructure costs in anticipation of further growth has impacted the overall profit for the year. As stated in previous reports the business model requires the Group to be able to demonstrate available resources to potential clients in the form of both accommodation and project management, thus enabling clients to benefit from the flexibility our managed service environment offers to them, to rapidly increase or reduce resource levels to meet their business needs. The Group has been very successful in delivering significant projects to our larger clients in this period and we continue to benefit from follow-on projects as a consequence. The market overall has been static for some while now and whilst businesses are inviting to tender, many decisions to commence projects are subsequently being deferred. Whilst this is frustrating we are encouraged by the number of opportunities being gained. Outlook We maintain a focused approach on our business model, which we believe differentiates us from our less focused competitors. We continue to be positioned to increase business levels without further increases in overheads. The first quarter has been profitable with the completion of a major project. The second quarter will be challenging to maintain utilization levels of both property and permanent consultants in anticipation of either a general upturn in the market or securing of further projects. The Group is waiting on a number of opportunities at present and therefore the preference to retain the successful quality permanent consultant team we have built up has to be weighed against the confidence of securing new projects. Consequently the Group is prepared to absorb any costs for a short period of time to allow the outcome of these opportunities to be determined. At the same time we are pleased to be increasing our numbers of contracted consultants by some 10% in this second quarter, the benefits of which will not be fully achieved until the second half of the year. Overall the directors are cautious about prospects for the first half of the year. David Wood Chairman and Managing Director 5 August 2002 Consolidated profit and loss account for the year ended 31 March 2002 Note 2002 2001 £'000 £'000 Turnover 9,226 8,269 Cost of sales (7,293) (6,292) --------- --------- Gross profit 1,933 1,977 Administrative expenses (1,734) (1,514) --------- --------- Operating profit 199 463 Net interest payable (44) (73) --------- --------- Profit on ordinary activities before taxation 155 390 Tax (106) (123) --------- --------- Profit for the financial year 49 267 --------- --------- Earnings per share Basic 2 0.47p 2.57p Diluted 2 0.47p 2.57p --------- --------- Consolidated balance sheet at 31 March 2002 2002 2001 £'000 £'000 Fixed assets Tangible assets 297 382 Current assets Debtors 1,930 1,392 Cash at bank 418 211 --------- --------- 2,348 1,603 --------- --------- Creditors: amounts falling due (1,713) (1,091) within one year --------- --------- Net current assets 635 512 --------- --------- Total assets less current liabilities 932 894 Creditors: amounts falling due after more than one year (43) (85) --------- --------- 889 809 --------- --------- Capital and reserves Called up share capital 208 208 Share premium account 103 72 Profit and loss account 578 529 --------- --------- Equity shareholders' funds 889 809 --------- --------- Consolidated cash flow statement for the year ended 31 March 2002 2002 2001 £'000 £'000 Net cash (outflow)/inflow from operating activities (98) 428 Returns on investments and servicing of finance Net interest paid (44) (73) Taxation UK corporation tax (143) (107) Capital expenditure and financial investment Purchase of tangible fixed assets (24) (226) Sale of tangible fixed assets 33 61 --------- --------- Cash (outflow)/inflow before financing (276) 83 --------- --------- Financing Capital element of finance lease contracts - Repayments (108) (65) Amounts advanced against trade debtors 591 - --------- --------- Cash inflow/(outflow) from financing 483 (65) --------- --------- Increase in cash in the year 207 18 --------- --------- Reconciliation of operating profit to net cash inflow from operating activities 2002 2001 £'000 £'000 Operating profit 199 463 Depreciation 67 77 Loss on sale of tangible assets 9 6 Increase in debtors (538) (206) Increase in creditors 165 88 --------- --------- Net cash (outflow)/inflow from operating activities (98) 428 --------- --------- Reconciliation of net cash inflow to movement in net debt 2002 2001 £'000 £'000 Increase in cash at bank 207 18 Cash (inflow)/outflow from changes in debt (483) 65 Inception of finance leases - (99) --------- --------- Movement in net funds (276) (16) Net funds at start of year 47 63 --------- --------- Net (debt)/funds at end of year (229) 47 --------- ---------- Notes to the Preliminary Announcement 1. Preparation of preliminary announcement The preliminary results have been extracted from the company's audited accounts which have been approved and signed by the directors and auditors. They have not yet been delivered to the Registrar of Companies. The financial information set out in this preliminary announcement does not comprise Statutory Accounts within the meaning of section 254 of the Companies Act 1985. 2. Earnings per share The calculation of earnings per share is based on the profit on ordinary activities after tax for each period and the weighted average number of shares in issue during the period, being 10,400,000 (2001: 10,400,000). The diluted earnings per share is based on the profit after tax for each period and the weighted average number of shares in issue during the period being 10,400,000 (2001: 10,400,000). 3. Copies of report The Annual Report will be posted to all shareholders and will be available on request from the Company Secretary, Queen Square House, 15 Queen Square, Brighton, East Sussex, BN1 3FD. 4. Copy of this announcement A copy of this announcement will be available for one month from the Company Secretary, Queen Square House, 15 Queen Square, Brighton, East Sussex, BN1 3FD. 5 August 2002 This information is provided by RNS The company news service from the London Stock Exchange

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