Interim Results

RNS Number : 9482Y

IS Solutions PLC

14 September 2009

 



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Date: 14 September 2009

Embargoed: 7.00am

IS Solutions plc

Interim Results for the six months ended 30 June 2009

Revenue £5.12million (2008: £3.64 million)	+40.4%
Adjusted Operating profit* £213,000 (2008: £157,000)	+36%
Pre-tax profit £184,000 (2008: £189,000)	-2%
Earnings per share 0.71p (2008: 0.71p)	-
Interim dividend 0.33p (2008: 0.33p)	-
Strong cash generation resulted in cash and cash equivalents at the half year increasing to  £1.81 million(31 December 2008: £1.76 million)

*Pre amortisation and share based payments

'With an increasing recurring revenue stream and a high level of project revenues, coupled with the continued improvement in operating profit the Board remains confident of meeting market expectations for the full year.'

Barrie Clark, Chairman

FULL STATEMENT ATTACHED

Enquiries:
John Lythall, Managing Director	Keith Gabriel/Fiona Tooley
IS Solutions Plc	Citigate Dewe Rogerson Ltd
Tel: [phone]	Tel: [phone]
www.issolutions.co.uk
Ticker: AIM: ISL
Charles Cunningham
FinnCap
Tel: [phone]

  -2-

IS Solutions plc

Interim Results for the six months ended 30 June 2009

Statement by the Chairman, Barrie Clark

Against a continuing background of economic uncertainty, the Board is pleased to announce the interim results for the period ended 30 June 

Revenue increased by 40.4% to £5.12 million (2008: £3.64 million) of which, 19% was organic and 21% from last year's acquisition. Adjusted operating profit increased by 36% to £213,000 (2008: £157,000) and earnings per share were unchanged at 0.71p (2008: 0.71p) caused by a drop of £40,000 in the interest earned on our cash holdings. Cash flow from operations has again been positive with cash and cash equivalents at the half year increasing to £1.81 million (31 December 2008: £1.76 million).

To further improve our operating position, the Company completed the purchase of its headquarters building in Sunbury on Thames (announced on 4 September 2009) which will lead to a reduction in overheads as we move forward into next year. 

During the year we also invested in establishing a branch office in the Indian sub-continent to help reduce our operating costs and assist us in being more competitive once the UK economy starts to grow again.  This, coupled with strong recurring revenues from a quality client base, has allowed us to retain staff through the recession thereby enabling us to respond to any upturn.

Dividend

In the current economic climate the Board continues to look carefully at its level of dividend. With continued strong cash generation from operations, improving markets and prospects, and the first half results being in line with our expectations, the Board has held the interim dividend at last year's level at 0.33p per ordinary share. The interim dividend will be paid on 30 October 2009 to shareholders on the register at the close of business on 25 September 2009.

Outlook

With an increasing recurring revenue stream and a high level of project revenues, coupled with the continued improvement in operating profit the Board remains confident of meeting market expectations for the full year.

Consolidated income statement for the six months ended 30 June 2009
		6 months ended		Year ended
		30 June		31 December
		2009	2008	2008
			Restated
		£'000	£'000	£'000
Continuing operations
	Revenue	5,119	3,644	8,854
	Cost of sales	(3,602)	(2,309)	(5,855)
Gross profit		1,517	1,335	2,999
	Distribution costs	(889)	(762)	(1,565)
	Administration expenses	(499)	(476)	(1,177)
	Other operating income	49	46	92
Profit from operations		178	143	349
	Investment income	6	46	103
Profit before tax		184	189	452
	Tax	(18)	(24)	(22)
Profit attributable to equity holders of the parent		166	165	430
Earnings per share
	Basic	0.71 p	0.71 p	1.83 p
	Diluted	0.70 p	0.70 p	1.82 p

Consolidated statement of changes in equity for the six months ended 30 June 2009
		6 months ended		Year ended
		30 June		31 December
		2009	2008	2008
		£'000	£'000	£'000
	Purchase of own shares	-	(331)	(515)
	Sale of own shares	3	16	235
	Share-based payments	5	7	14
Total expense recognised directly in equity		8	(308)	(266)
	Profit for the period	166	165	430
	Dividends paid	(157)	(160)	(238)
Change in shareholders' equity for the period		17	(303)	(74)
	Shareholders' equity at start of period	2,997	3,071	3,071
Shareholders' equity at end of period		3,014	2,768	2,997

Consolidated balance sheet as at 30 June 2009
		At 30 June		At 31 December
		2009	2008	2008
		£'000	£'000	£'000
Non-current assets
	Goodwill	1,134	254	603
	Other intangible assets	60	-	90
	Property, plant and equipment	100	144	141
	Deferred tax assets	77	61	99
		1,371	459	933
Current assets
	Trading investments carried at fair value	-	250	-
	Trade and other receivables	1,510	1,244	2,070
	Cash and cash equivalents	1,810	1,860	1,757
		3,320	3,354	3,827
Total assets		4,691	3,813	4,760
Current liabilities
	Trade and other payables	(1,594)	(1,025)	(1,676)
	Tax liabilities	(71)	(20)	(69)
		(1,665)	(1,045)	(1,745)
Non-current liabilities
	Deferred tax liabilities	(12)	-	(18)
Total liabilities		(1,677)	(1,045)	(1,763)
Net assets		3,014	2,768	2,997
Equity
	Share capital	496	496	496
	Share premium account	1,786	1,786	1,786
	Own shares	(274)	(368)	(280)
	Retained earnings	1,006	854	995
Attributable to equity holders of the parent		3,014	2,768	2,997

Consolidated cash flow statement for the six months ended 30 June 2009
		6 months ended		Year ended
		30 June		31 December
		2009	2008	2008
		£'000	£'000	£'000
Operating activities
	Profit from operations	178	143	349
Adjustments for:
	Depreciation of property, plant and equipment	46	52	116
	Gain on disposal of property, plant and equipment	(2)	(2)	(1)
	Amortisation of intangible assets	30	7	37
	Impairment of goodwill	-	-	25
	Share-based payments	5	7	14
Operating cash flows before movements in working capital		257	207	540
	Decrease/(increase) in debtors	560	(20)	(594)
	(Decrease)/increase in creditors	(82)	(85)	379
Cash generated by operations		735	102	325
	Income taxes paid	-	-	(20)
Net cash from operating activities		735	102	305
Investing activities
	Interest received	6	46	74
	Purchase of trading investments	-	(250)	(250)
	Proceeds on disposal of trading investments	-	-	279
	Purchase of property, plant and equipment	(12)	(74)	(109)
	Proceeds on disposal of property, plant and equipment	9	7	6
	Acquisition of subsidiary	(531)	-	(311)
Net cash (used in)/from investing activities		(528)	(271)	(311)
Financing activities
	Dividends paid	(157)	(160)	(238)
	Sale/(purchase) of own shares	3	(315)	(503)
Net cash used in financing activities		(154)	(475)	(741)
Net increase/(decrease) in cash and cash equivalents		53	(644)	(747)
	Cash and cash equivalents at start of year	1,757	2,504	2,504
Cash and cash equivalents at end of period		1,810	1,860	1,757

Notes to the interim financial statements

1.    Basis of preparation

The interim financial information for the six months ended 30 June 2009 and 30 June 2008 does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 and has not been audited by the Group's auditors. The financial information for the year ended 31 December 2008 has been extracted from the statutory accounts for that year which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain a statement under s237(2) or (3) of the Companies Act 1985.

The interim financial information has been prepared on the basis of the accounting policies and presentation required by International Financial Reporting Standards, incorporating International Accounting Standards (IAS's) and Interpretations (collectively IFRS), and on a consistent basis with the latest published annual accounts. The comparative amounts for revenue, cost of sales and distribution costs to June 2008 have been restated to comply with the change in accounting policies adopted in those annual accounts, as has the segmental analysis.

2.    Business and geographical segments

For management purposes the Group reports its revenue and gross profit by vendor generated third party sales (distribution) and sales to the Group's own customers (direct). No allocation of operating costs and other income is made because the directors consider that any such allocation would be arbitrary.

Business segments 2009		Direct	Distribution	Unallocated	Total
	Revenue	3,984	1,135	-	5,119
	Gross profit	1,434	83	-	1,517
	Other income and expense	-	-	(1,351)	(1,351)
	Segment result	1,434	83	(1,351)	166
	Assets	1,461	-	3,230	4,691
	Liabilities	(437)	-	(1,240)	(1,677)
Business segments 2008		Direct	Distribution	Unallocated	Total
	Revenue	3,198	446	-	3,644
	Gross profit	1,307	28	-	1,335
	Other income and expense	-	-	(1,170)	(1,170)
	Segment result	1,307	28	(1,170)	165
	Assets	1,148	-	2,665	3,813
	Liabilities	(708)	-	(337)	(1,045)
Geographical segments
	The group operates entirely within the UK.

3.    Earnings per share

	6 months ended		Year ended
	30/06/2009	30/06/2008	31/12/2008
Earnings attributable to equity holders of the parent	£166,000	£165,000	£430,000
Weighted average of ordinary shares in issue	24,793,190	24,793,190	24,793,190
Weighted average of own shares	(1,362,730)	(1,403,998)	(1,254,024)
Weighted average for calculating basic EPS	23,430,460	23,389,192	23,539,166
Effective dilutive share options	129,892	201,000	81,559
Weighted average for calculating diluted EPS	23,560,352	23,590,192	23,620,725

4.    Dividends

During the period a dividend of £157,000 (0.67p per share) was paid in relation to the year ended 31 December 2008 (2008: £160,000 (0.67p per share) in relation to the year ended 31 December 2007).

An interim dividend of 0.33p per share (2008: 0.33p) is proposed, and will be paid on 30 October 2009 to shareholders on the register at the close of business on 25 September 2009.

 

END

 

 

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