Final Results - Pre-tax Profit Up 28%

Comino Group PLC 8 June 2000 COMINO GROUP plc FINAL RESULTS ANNOUNCEMENT Profit up 28%; EPS up 18%; Dividend up 24%; Substantial order book Comino Group plc ('Comino'), the provider of software solutions for the social housing, occupational pensions and local government sectors, announces final results for the year ended 31 March 2000. Highlights of the results 2000 1999 Increase * Turnover £20.5m £18.6m 10% * Turnover continuing operations £17.1m £14.3m 20% * Profit before tax £6.0m Operating profit & interest - £3.47m £2.72m 28% Profit on disposal - £2.55m * Earnings per share 30.8p (now fully taxed) Operating profit & interest - 17.9p 15.2p 18% Profit on disposal - 12.9p * Proposed dividend 3.1p final 2.5p final * Total dividend 4.65p 3.75p 24% * Cash balances £12.4m £7.4m * Sale of non core subsidiary * Comino now focused on its 3 core sectors under one common brand and operating structure * New Universal Pensions Management product wins industry award and orders * £1m investment in joint venture ISP/ASP/FM company targeting the housing sector * Substantial sale opportunities in social housing with existing customers, including workflow * Market share gains in local authorities The Company made the following comments on its results: 'The Comino Group has completed a further year of excellent performance.. and is resolved to make its brand name synonymous with innovative, quality software and services. Regarding Prospects Comino said: 'Comino starts the new financial year with clearly identifiable opportunities, a substantial order book and a base of recurring revenue from support contracts for existing customers.' For further information please contact: Garth Selvey, Chief Executive tel: 020 7786 9600 on the day Paul Clifford, Finance Director thereafter: 01628 525433 Peter Binns/Jane Mallinson, Binns & Co tel: 020 7786 9600 Chairman's Statement The Comino Group has completed a further year of excellent performance. The non-core business has been sold and the principal operating company, Comino plc, is now focused on Social Housing, Local Government and Occupational Pensions under one common brand and operating structure. The company has established a strong technology platform and is well positioned both to serve its existing customer base and to develop new products and markets in related areas. For the year ended 31 March 2000, profit before taxation was £6.02 million. This included £3.47 million of operating profit and interest and a capital gain of £2.55 million from the disposal of the fashion and clothing business in November of last year. Operating profit and interest were 28% higher than in the previous year and included £2.92 million attributable to the ongoing core business. As expected, sales growth was affected by a slowing in new contracts in the period up to the millennium. Total turnover increased by 10% to £20.5 million reflecting a partial year from the disposal. Turnover from continuing operations increased by 20%. Gross margins were maintained at 69% and overheads were tightly controlled. There was a slight shift towards higher margin service revenues, which compensated for the anticipated downturn in new housing contracts during the period. The Group is now returning to a more normal and balanced revenue mix, divided fairly equally amongst annual recurring support, business with the customer base and new name contracts. Adjusted EPS of 17.9 pence per share showed an increase of 18%, after being subjected for the first time to a full tax charge. With the inclusion of the capital gain, EPS was 30.8 pence per share. Cash balances at the end of the year were £12.4 million compared with £7.4 million last year. The proposed dividend of 3.1 pence per share will bring the total for the year to 4.65 pence, an increase of 24% over the previous year. In Social Housing, there are substantial sales opportunities with existing customers, where the benefits of Workflow are becoming increasingly apparent. In Local Authorities, we continue to win market share and we are building the customer base by the sale of two Revenue & Benefit systems per month. Last year saw the release of Universal Pensions Management (UPM) as a new generation product for Occupational Pensions. We enter the new year with significant new name orders including the West Midlands Pensions Fund. UPM has won recognition in both the private and the public sectors. It has also been recognised by the pensions industry itself with the presentation of the 'Systems and Software Provider of the Year' award sponsored by Sun Life Financial of Canada. UPM shows what can be achieved in performance and efficiency when Workflow and Electronic Document Management are used to streamline the business flow and modernise the customer interface. UPM clearly presents a major growth opportunity. The company recently announced a £1 million investment in a joint-venture company, Comino Montal. This will allow an existing, profitable business to offer a range of new services to the Comino customer base. Comino Montal will provide internet access and communications (ISP), facilities for software rental (ASP), off-site server management and remote network management (FM). We estimate that there are some 1,000 organisations in Housing alone who could benefit from ASP services which offer a relatively low cost alternative to managing their own IT infrastructure. Comino Montal already provides ISP services for 30 Housing customers and has recently won its first ASP contract based on Comino's housing software. The operation will become a central portal to those communities who use Comino software. Comino starts the new financial year with clearly identifiable opportunities, a substantial order book and a base of recurring revenue from support contracts for existing customers. During the year Gordon Skinner was regrettably obliged to retire as Chairman through ill health. Gordon was involved with Comino from its inception and the Board wishes to thank him for his very considerable contribution. Comino is resolved to make its brand name synonymous with innovative, quality software and services in its chosen market sectors. We already provide products which are resilient and systems that provide essential business functionality. To this, we are now adding the features and benefits which the internet provides. We are grateful to all our customers and staff for the contribution which they have made to results for the year just ended and for helping Comino position itself for an exciting future. David Quysner Chairman Consolidated profit and loss account for the year ended 31 March 2000 2000 1999 £000 £000 Turnover Continuing operations 17,125 14,270 Discontinued operations 3,327 4,325 ---------- ---------- 20,452 18,595 Cost of sales (6,236) (5,784) ---------- ---------- Gross profit 14,216 12,811 Administrative expenses (11,110) (10,377) ---------- ---------- Operating profit Continuing operations 2,558 2,043 Discontinued operations 548 391 ---------- ---------- 3,106 2,434 Exceptional item Profit on disposal of subsidiary 2,549 - Interest receivable 369 288 Interest payable (4) (4) ---------- ---------- Profit on ordinary activities before taxation 6,020 2,718 Tax on profit on ordinary activities (1,834) (676) ---------- ---------- Profit on ordinary activities after taxation 4,186 2,042 Dividends (635) (513) ---------- ---------- Retained profit for the financial year 3,551 1,529 ====== ====== Basic earnings per share 30.8p 15.2p ====== ====== Diluted earnings per share 29.9p 14.8p ====== ====== Adjusted earnings per share 17.9p 15.2p ====== ====== The Group had no recognised gains or losses during the year ended 31 March 2000 other than the profit for the year. Consolidated balance sheet at 31 March 2000 2000 1999 £000 £000 Fixed assets Tangible assets 665 649 ----------- ----------- Current assets Stocks 329 859 Debtors 4,754 6,596 Cash at bank and in hand 12,434 7,449 ---------- ----------- 17,517 14,904 Creditors: amounts falling due within one year (5,507) (5,678) ----------- ----------- Net current assets 12,010 9,226 ----------- ----------- Total assets less current liabilities 12,675 9,875 Creditors: amounts falling due after more than one year (16) (55) Deferred income (5,281) (6,545) ----------- ----------- 7,378 3,275 =========== =========== Capital and reserves Share capital 683 678 Share premium reserve 4,375 4,334 Profit and loss account 2,320 (1,737) ---------- ---------- 7,378 3,275 =========== ========== These financial statements were approved by the Board of Directors on 7 June 2000. G R Selvey ) Directors P L Clifford ) Consolidated cash flow statement for the year ended 31 March 2000 2000 1999 £000 £000 Net cash inflow from operating activities 3,044 4,134 Returns on investment and servicing of finance Interest received 369 288 Interest paid (4) (4) ---------- ---------- Net cash inflow from returns on investments and servicing of finance 365 284 ---------- ---------- Taxation (647) (451) ---------- ---------- Capital expenditure Purchase of tangible fixed assets (512) (341) Sale of tangible fixed assets 15 29 ---------- ---------- Net cash outflow from capital expenditure (497) (312) ---------- ---------- Acquisitions and disposals Disposal of subsidiary undertaking 3,277 - ---------- ---------- Net cash inflow from acquisitions and disposals 3,277 - ---------- ---------- Equity dividends paid (550) (502) ---------- ---------- Management of liquid resources Decrease in short term deposits - 2,200 ---------- --------- Financing Issue of shares 46 31 Repayment of borrowings (53) (64) ---------- ---------- Net cash outflow from financing (7) (33) ---------- ---------- Increase in cash 4,985 5,320 ========== ========== Notes 1. Earnings per ordinary share have been calculated on the profit for the financial year of £4,186,000 after taxation and minority interest and on 13,610,139 ordinary shares being the weighted number of ordinary shares in issue during the year. The calculation of diluted earnings per share takes account of share options that do not currently rank for dividends but may do so in the future. The adjusted earnings per share excludes the profit after tax of £1,750,000 on the disposal of Prologic Computer Consultants Limited. 2. The financial information set out above does not constitute the statutory accounts for the period ended 31 March 2000 within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 3. The annual report and accounts will be posted to shareholders on 8 June 2000 and will also be available on request from the Company's registered office, Comino House, Furlong Road, Bourne End, Buckinghamshire, SL8 5AJ. 4. The directors are recommending a final dividend of 3.1p per share which, if approved, will be paid on 27 July 2000 to shareholders on the register on 23 June 2000. 5. The Annual General Meeting will be held at Binns & Co, 16 St Helen's Place, London, EC3A 6DF on Friday 7 July 2000 at 11:30 am.

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