Interim Results

RNS Number : 6012D

Coms PLC

17 September 2008

 

 COMS PLC 

("Coms", or "the Company")

Interim accounts for the six months ended 31 July 2008

Period Highlights

• Revenue growth of 134% to £1.2m (H1 2007: £0.5m)

• Gross profit of £321,000 (H1 2007: £202,000)

• Gross margin in excess of 27%

• Partnership with the Federation of Small Businesses (FSB) to promote Coms service across its 210,000 membership

• Change of Nomad and Broker to Daniel Stewart and Company

Post Period Highlights:

• 1 for 100 share consolidation

• Launch of combined broadband and VoIP (double play) service in conjunction with Tiscali

Jason Drummond, Chairman of Coms, said: "Coms continues to increase its customer base and the resulting revenues prove our business model; we are now focussed on growth. 

"I remain very confident that our growth will be sustained through the second half of the year and I am excited about the long term prospects for Coms." 

Contact:

Coms PLC Jason Drummond Richard Bennett	020 7148 3000
Daniel Stewart & Company plc Simon Leathers Tessa Smith	020 7776 6550
Threadneedle Communications Graham Herring Alex White	020 7653 9855

Chairman's Statement

I am pleased to report that, as a result of the successful integration of our acquisitions and sustained organic customer growth, Coms' revenue has increased by 134% over the same period last year. In addition, Coms continues to maintain a high gross margin of in excess of 27% across the group and maintains a 40% gross margin across our core hosted telephony product which we take as verification of our business model. 

As forecast, an expanded sales team and additional marketing programmes have led to an increase in administrative expenses. This figure is expected to narrow by the end of the year as they ramp up to their full revenue generating potential.

During the period Coms has channelled its efforts to target the business market with our hosted telephony proposition that saves customers money on both the set-up and ongoing call costs of owning their own switchboard, as well as providing advanced functions and flexibility. We concluded a revenue generating partnership with the Federation of Small Businesses (FSB) which markets the Coms products across its 210,000 customer base. This is an enormous validation of our services and continues to deliver significant sales leads. 

We are delighted with the performance of wholesale subsidiary, VCOMM, which continues to exceed our expectations. The subsidiary remains the sole distributor of iconic range of IP Phones from Polycom and we have seen significant growth in the corporate sector for these products. VCOMM 's strategic technology relationships also includes companies such as Extricom and Vegastream that generate good revenues for the business but importantly also generate corporate sales leads for our core hosted telephony services. With this being a higher turnover business with lower margins this significant increase in sales has created a minor erosion of the overall group gross profit margin.

During the period, Coms appointed Daniel Stewart & Company as our nomad and broker and their house analyst has since published an Initiation of Coverage research note.

As part of our corporate development, we requested shareholder approval at the August 2008 AGM to consolidate our stock by a factor of 100. This was granted, and the implementation has enabled the market to reduce the "bid-offer" spread which previously represented an additional cost to both existing and potential investors.

This is clearly a difficult point in the economic cycle, but it does focus many companies' minds on their bottom line - telecoms is the lifeblood of many businesses and the Coms proposition of reducing costs whilst increasing flexibility and functionality continues to be well received. I remain very confident that our growth will be sustained through the second half of the year and I am excited about the long term prospects for Coms. 

Accordingly, we intend to continue our current strategies of pursuing organic growth from business customers and taking advantage of complementary acquisitions that the current environment will undoubtedly create. 

Jason Drummond

Chairman.

 COMS PLC 

Income Statement 

For the Six months ended 31 July 2008

				Six months to 31 July 2008 Unaudited		Six months 31 July 2007 Unaudited		Year ended  31 January 2008  Audited
				£'000s		£'000s		£'000s
Continuing operations
Revenue				1,170		501		1,297
Cost of Sales				(849)		(299)		(854)
Gross Profit				321		202		443
Administrative expenses				(834)		(485)		(1,300)
Operating Loss				(513)		(283)		(857)
Finance income				1		3		4
Finance costs				(4)		(3)		(7)
Loss before tax				(516)		(283)		(860)
Income tax charges				-		-		30
Loss for the period from continuing operations attributable to shareholders				(516)		(283)		(830)
Loss per share
From continuing operations:
Basic and diluted				(0.04p)		(0.03p)		(0.09p)
Proforma loss per share after consolidation on 22 August 2008				(4p)		(3p)		(9p)

The Company's turnover and operating loss arose from continuing operations.

There were no recognised gains or losses other than those recognised in the income statement above.

 COMS PLC 

Balance Sheet as at 31 July 2008

				As at 31 July 2008 Unaudited		As at 31 July 2007 Unaudited		As at 31 January 2008 Audited
				£'000s		£'000s		£'000s
Assets
Non-current assets
Goodwill				2,308		2,330		2,308
Other intangibles				55		14		46
Property, plant and equipment				52		49		37
				2,415		2,393		2,391
Current assets
Inventories				212		56		187
Trade and other receivables				547		296		758
Cash and cash equivalents				63		186		22
				822		538		967
Total assets				3,237		2,931		3,358
Equity and liabilities
Capital and reserves
Share capital				4,642		3,446		4,168
Accumulated deficit				(2,060)		(1,027)		(1,544)
Total equity				2,582		2,419		2,624
Current liabilities
Trade and other payables				589		414		652
Bank overdrafts				5		-		2
Bank loans				37		37		37
				631		451		691
Non current liabilities
Bank loans				24		61		43
				24		61		43
Total equity and liabilities				3,237		2,931		3,358

 COMS PLC 

Cash Flow Statement

For the Six months ended 31 July 2008

		Six months to 31 July 2008 Unaudited		Six months to 31 July 2007 Unaudited		Year ended 31 January 2008 Audited
	Note	£'000		£'000		£'000
Operating activities	3	(376)		(565)		(1,417)
Investing activities
Purchases of plant and equipment		(23)		(39)		(40)
Purchase of other intangibles		(15)		(1)		(39)
Purchase of subsidiary undertakings (net of cash acquired)		-		(39)		(44)
Financing activities
Proceeds on issue of shares		474		660		1412
Repayment of bank loans		(19)		(9)		(28)
Finance income		1		3		4
Finance expense		(4)		(3)		(7)
Net cash inflow/(outflow)		38		7		(159)
Cash and cash equivalents at the beginning of the period		20		179		179
Bank balances and cash		58		186		20

Consolidated statement of changes in equity

		As at 31 July 2008		As at 31 July 2007		As at  31 January 2008
		£'000s		£'000s		£'000s
As at beginning of period		2,624		1,942		1,942
Deficit for the period		(516)		(283)		(830)
Issue of share capital net of expenses		474		760		1,512
As at end of period		2,582		2,419		2,624

 COMS PLC 

Notes to the Interim Report

1.    Significant Accounting Policies

       Whilst unaudited these accounts have been prepared in accordance with International 
       Financial  Reporting Standards and on the historical cost basis, using generally recognised
       accounting principles consistent with those used in the annual report and accounts for the year
       ended 31 January 2008 and expected to be used for the year ended 31 January 2009

       This interim report for the six months to 31 July 2008 which complies with IAS 34 was approved
       by the Board on 16 September 2008.

2.    Loss per Share

	Six months to 31 July 2008		Six months 31 July 2007		Year ended  31 January 2008
Earnings per ordinary shares
Basic and diluted	(0.04p)		(0.03p)		(0.09p)

The loss per ordinary share is based on the Company's loss for the period of £516,333 (31 July 2007 - £283,024; 31 January 2008 - £830,210) and a basic weighted average number of shares of 1,152,291,661 (31 July 2007 - 908,450,023; 31 January 2008 - 953,887,789) .

In order to calculate diluted earnings per share, the weighted average number of ordinary shares in issue would be adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. In each of the periods ended 31 July 2008, 2007 and 31 January 2008 the Group has made a loss after taxation and the effect of the potential ordinary shares is anti-dilutive and therefore the diluted earnings per share is the same as basic earnings per share.

3.    Reconciliation of operating loss to net cash outflow from operating activities.

		Six months to 31 July 2008		Six months 31 July 2007		Year ended  31 January 2008
		£'000s		£'000s		£'000s
Loss for the period		(516)		(283)		(860)
Adjustments for :
Finance income		(1)		(3)		(4)
Finance expense		4		3		7
Depreciation and amortisation		14		14		34
(Increase) in inventories		(25)		(17)		(130)
(Increase)/Decrease in receivables		211		(54)		(475)
(Decrease)/Increase in payables		(63)		(225)		11
Net cash from operating activities		(376)		(565)		(1,417)

COMS PLC 

                    Notes to the Interim Report

4.    Called up Share Capital

       The issued share capital as at 31 July 2008 was 1,221,961,533 Ordinary Shares of 0.1 p each 
       (31 July 2007 - 921,378,200; 31 January 2008 - 1,056,378,200). 

       On 23 March 2008 the company issued 3,500,000 ordinary shares of 0.1p each for cash at   
       0.1p per share as a result of the exercise of 'A' Warrants.

       On 17 April 2008 the company issued 162,083,333 ordinary shares of 0.1p each for cash at
       0.3p per share. The net amount raised after costs amounted to £471,659.

       On 20 May 2008 the company granted options over 36 million ordinary shares of 0.1p each at 
       an option price of 0.5p per share. The Black Scholes value of these options at the date of grant 
       was insignificant.

5.    The unaudited results for period ended 31 July 2008 do not constitute statutory accounts within
       the meaning of Section 240 of the Companies Act 1985. The comparative figures for the year 
       ended 31 January 2008 are extracted from the statutory financial statements which have been 
       filed with the Registrar of Companies and which contain an unqualified audit report and did not 
       contain statements under Section 237(2) or (3) of the Companies Act 1985.

6.    Copies of this interim statement are available from the Company at its registered office at 5-7 
       Cranwood Street, London, EC1V 9EE. The interim statement will also be available on the 
       company website www.coms.com/governance_policy.html

7.    Events subsequent to 31 July 2008

       On 22 August 2008 the Company enacted a share consolidation on a 1 for 100 basis, 
       converting its ordinary shares of 0.1p to ordinary shares of 10p. At that date, the Company's 
       total number of issued ordinary shares of 0.1p amounting to 1,221,961,533 were, after the  
       issue of a further 67 shares, converted to 1,221,962 ordinary shares of 10p each.

 

END

 

 

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