Information  X 
Enter a valid email address

Kalamazoo Comp Grp. (KLMZ)

  Print      Mail a friend

Thursday 21 December, 2000

Kalamazoo Comp Grp.

Interim Results

Kalamazoo Computer Group PLC
21 December 2000


                                                               21 December 2000

                         KALAMAZOO COMPUTER GROUP PLC

          INTERIM RESULTS FOR THE HALF YEAR ENDED 30 SEPTEMBER 2000


Kalamazoo Computer Group plc, the West Midlands based supplier of specialist
computer solutions, announces interim results for the half year ended 30
September, 2000.



KEY POINTS


-    Turnover from continuing operations £22.6m (1999: £30.9m)


-    Pre-tax loss £2.1m (1999: profit £0.75m after exceptional profit
     of £0.64m on sale of businesses discontinued)


-    Phases One and Two of change management programme 'Advantage
     2000' complete with cost structure altered and efficiency of organisation
     significantly improved. Phase Three, focusing on growth, now started.


-    Long term growth generated  by new offerings into the market,
     specifically a new pan-European Dealer Management System and the expansion 
     of e-Zoo.

-    Dealer Management System now live in Germany, Belgium and Spain.
     Actively working on manufacturer endorsements that should lead to volume   
     roll outs across continental Europe.

-    The Group has continued its investment programme in the
     development of new product, the widening of its customer base and in the
     attraction and retention of high calibre staff  to ensure it can deliver   
     the growth phase of Advantage 2000.


-    Commenting on prospects, Chairman Bob Jordan said:



       'Whilst immediate trading conditions remain difficult, the Board
continues to work towards returning the Group to profitability and expects to
see some of the benefits from having a more efficient organisation flowing
through during the second half of this financial year.'



For further information:


Bob Jordan, Chairman
Malcolm Roberts, Chief Executive
Kalamazoo Computer Group                         +44 (0) 121 411 2345

Richard Darby
Suzanne Dunne
Buchanan Communications                          +44 (0) 20 7466 5000



                           CHAIRMAN'S STATEMENT

The start of our financial year saw an expected fall in new orders after the
additional business which had been generated by Y2K.  This was exacerbated by
conditions in the UK Automotive Sector with dealers reluctant to make further
investment in an uncertain market place.



We have adjusted the cost structure and significantly improved the efficiency
of the organisation and continue to do so.  Our Advantage 2000 change program,
which started two years ago, has completed two of its three phases:  Phase One
being primarily cost reduction and Phase Two efficiency improvement.  We are
now starting Phase Three which focuses on growth.



Short term growth will be impacted by market conditions but there are signs
that we are increasing our market penetration.  Long term growth will be
generated by new offerings into the market, specifically our new pan-European
Dealer Management System and the expansion of our start up business, e-Zoo.



Our Dealer Management System is now live in Germany, Belgium and Spain and we
are actively working on manufacturer endorsements that should lead to volume
roll outs across continental Europe.



The potential for the new e-Zoo business is promising.  We have formed a
strategic alliance with Evans Sales Systems Inc., a US West Coast automotive
business transformation group, and are now focusing our e-Zoo offering on a
program which introduces new and more efficient Sales and Customer
Relationship Marketing processes and techniques into Automotive Dealerships.
We are currently market testing the program in the United Kingdom.



Against this background, the Group delivered, on continuing operations, an
interim operating loss of £1.74 million (1999 profit £0.2 million) on turnover
of £22.6 million (1999 £30.9 million).  Coupled with exceptional costs of £
0.27 million, relating to the last phase of restructuring under Advantage
2000, the pre tax loss for the half year was £2.13 million (1999 profit £0.75
million).  The 1999 profit included £0.64 million profit on the sale of
businesses discontinued.  Loss per share was 3.5 pence after exceptional
items, compared with earnings per share of 0.9 pence in 1999.  No interim
dividend will be paid .



At 30 September 2000, the Group had net borrowings of £1.7 million compared to
net cash of £3 million at 31 March 2000.



Against a difficult trading background, the Group has continued its investment
programme in the development of new product, the widening of its customer base
and in the attraction and retention of high calibre staff to ensure that we
can deliver the growth phase of our change management programme.



BOARD CHANGES

Kurt Olnhausen one of the two non-executive directors representing The
Reynolds & Reynolds Company ceased to be a director on 25 August 2000, having
left the employment of Reynolds & Reynolds.  Dan Knowles was appointed as an
additional non-executive director on 1 December 2000 to represent Reynolds &
Reynolds.



PROSPECTS

Having completed the first two phases of our change program, Advantage 2000,
we are now a much more efficient and cost focused organisation intent on
gaining market share.



The two drivers of growth are now seen as e-Zoo and our new DMS offering
although we do not expect a significant contribution from them until the
latter part of 2001.



Meanwhile immediate trading conditions continue to be difficult.  The Board
continues to work towards returning the Group to profitability and expects to
see some of the benefits from having a more efficient organisation flowing
through during the second half of this financial year.



Robert Jordan
Chairman
21 December 2000



Consolidated Profit and Loss Account


                                                       6 months to
                                        Pre           30 September   6 months to
                                 Exceptional                  2000  30 September
                                       Items   Exceptional    Total         1999
                                               Items  
                                     £000          £000        £000         £000
                              

Turnover
Continuing operations and
share of joint ventures              22,632           -    22,632        30,900
                                     
Less: share of joint ventures             -           -         -             -
                                     22,632           -    22,632        30,900
Discontinued operations                   -           -         -         1,907
Less: share of joint ventures             -           -         -          (39)
                                          -           -         -         1,868
Total Group turnover                 22,632           -    22,632        32,768

Operating charges

Continuing operations                24,411         269    24,680        30,724
Discontinued operations                   -           -         -         1,943
Total Group operating charges        24,411         269    24,680        32,667

Operating (loss)/profit

Continuing operations               (1,779)       (269)   (2,048)           176
Discontinued operations                   -           -         -          (75)
                                    (1,779)       (269)   (2,048)           101

Share of operating profit/
(loss) in
- joint ventures -                        -           -         -          (32)
discontinued
- associates - continuing                36           -        36            36
                                         36           -        36             4
Total Group operating (loss)/       (1,743)       (269)   (2,012)           105
profit

Profit on sales of business
discontinued

- surplus over net assets                                       -         1,137
- less goodwill previously                                      -         (533)
written off
                                                                -           604
(Loss)/profit on ordinary
activities before interest                                (2,012)           709
Interest payable                                            (117)            45
(Loss)/profit on ordinary
activities before taxation                                (2,129)           754
Tax on (loss)/profit on
ordinary activities                                          (73)         (203)
(Loss)/profit for the period
attributable to shareholders                              (2,202)           551
(Loss)/profit per share                                    (3.5p)          0.9p
Diluted (loss)/profit per                                  (3.5p)          0.9p
share
(Loss)/profit per share
excluding exceptional items                                (3.1p)          0.0p




Consolidated Profit and Loss Account - Cont'd

                                                    Pre               12 months
                                            Exceptional                      to
                                                  Items   Exceptional  31 March
                                                              Items        2000
                                                                          Total
                                                   £000        £000        £000

Turnover
Continuing operations and share of joint         59,199           -      59,199
ventures
Less: share of joint ventures                         -           -           -
                                                 59,199           -      59,199
Discontinued operations                           3,752           -       3,752
Less: share of joint ventures                     (170)           -       (170)
                                                  3,582           -       3,582
Total Group turnover                             62,781           -      62,781

Operating charges
Continuing operations                            58,676       2,877      61,553
Discontinued operations                           3,766           -       3,766
Total Group operating charges                    62,442       2,877      65,319

Operating (loss)/profit

Continuing operations                               523     (2,877)     (2,354)
Discontinued operations                           (184)           -       (184)
                                                    339     (2,877)     (2,538)

Share of operating profit/(loss) in
- joint ventures - discontinued                    (61)           -        (61)
- associates - continuing                            74           -          74
                                                     13           -          13
Total Group operating (loss)/profit                 352     (2,877)     (2,525)

Profit on sales of business
discontinued

- surplus over net assets                                                 1,071
- less goodwill previously written off                                  (5,455)
                                                      -           -     (4,384)
(Loss)/profit on ordinary activities
before interest                                     352     (2,877)     (6,909)
Interest payable                                                           (24)
(Loss)/profit on ordinary activities
before taxation                                                         (6,933)
Tax on (loss)/profit on ordinary                                          (400)
activities
(Loss)/profit for the period attributable
to shareholders                                                         (7,333)
(Loss)/profit per share                                                 (11.7p)
Diluted (loss)/profit per share                                         (11.7p)
(Loss)/profit per share excluding
exceptional items                                                        (0.1p)




Consolidated Balance Sheet




                                                       30          30        31
                                                September   September     March
                                                     2000        1999      2000
                                                     £000        £000      £000

Fixed assets


Tangible assets                                     8,203       7,958     7,655
Investment in associate                               182         139       146
                                                    8,385       8,097     7,801

Current assets


Stocks                                              3,595       4,602     3,872
Debtors                                            13,610      21,498    13,898
Cash at bank and in hand (see note 5)                  46       1,558     2,997
                                                   17,251      27,658    20,767
Current liabilities


Creditors: amounts falling due within one year   (17,510)    (21,930)  (18,191)
Net current (liabilities)/assets                    (259)       5,728     2,576
Total assets less current liabilities               8,126      13,825    10,377

Provision for liabilities and charges             (1,121)     (1,274)   (1,126)
Net assets employed                                 7,005      12,551     9,251

Financed by:
Capital and reserves


Called up share capital                             6,271       6,254     6,271
Share premium account                              22,942      22,942    22,942
Revaluation reserve                                 5,036       5,102     5,036
Profit and loss account                          (27,244)    (21,747)  (24,998)
Total equity shareholders' funds                    7,005      12,551     9,251




Consolidated Cash Flow Statement


                                          6 months to 6 months to 12 months to
                                                   30          30           31 
                                            September   September        March
                                                 2000        1999         2000
                                                 £000        £000         £000

Cash flow from operating activities           (3,266)     (7,416)      (5,735)


Returns on investments and servicing
of finance                                      (117)          45         (24)
Taxation                                        (255)         411          932
Capital expenditure and disposals             (1,022)       (202)        (804)
Sale of businesses                                  -       2,487        2,619

Cash outflow before financing                 (4,660)     (4,675)      (3,012)


Financing:
                       - issue of shares            -           -           17
                       - reduction of debt          -       (186)        (188)

                                                    -       (186)        (171)
Decrease in cash in period                    (4,660)     (4,861)      (3,183)








Reconciliation of net cash flow to movement in net debt


                                                6 months   6 months   12 months
                                                      to         to          to
                                                      30         30          31 
                                               September  September       March
                                                    2000       1999        2000
                                                    £000       £000        £000

Decrease in cash in period                       (4,660)    (4,861)     (3,183)
Cash outflow from decrease in debt and lease
financing                                             -        186         188
Change in net debt resulting from cash flows     (4,660)    (4,675)     (2,995)
Translation difference                              (49)       (95)       (334)

Movement in net cash/(debt) in period            (4,709)    (4,770)     (3,329)
Net cash/(debt) at beginning of period             2,997      6,326       6,326

Net cash/(debt) at end of period                 (1,712)      1,556       2,997





Notes



1. The interim results for the six months ended 30 September 2000 have
neither been reviewed nor audited and have been prepared on the basis of
accounting policies consistent with those adopted for the year ended 31 March
2000 as set out in the financial statements of the Group.  The financial
information contained herein does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act, 1985.  Statutory accounts for the
year ended 31 March 2000, incorporating an unqualified audit report, have been
filed with the Registrar of Companies.



2. The loss per share of 3.5p (30 September 1999:  profit per share 0.9p) is
calculated on the loss of £2,202,000 (30 September 1999: profit of £
551,000) and the average number of shares in issue 62,705,749 (30
September 1999:  62,539,186).


The diluted loss per share of 3.5p (30 September 1999: profit per share 0.9p)
is calculated on the loss of £2,202,000 (30 September 1999:  profit of £
551,000) and the average number of shares in issue 62,705,749 (30 September
1999:  62,539,186) plus the number of shares that would have been issued on
the conversion of all the dilutive potential shares into ordinary shares, none
(30 September 1999:  228,315).



3. The profit and loss account, balance sheet and cash flow statements have
been prepared on a basis consistent with the statutory financial
statements for the year ended 31 March 2000.  FRS 15 was applied to the
accounts for the year ended 31 March 2000 where the assets previously
revalued were retained at modified historical costs.


4. Reconciliation of operating profits to operating cash flows


                                     6 months to    6 months to   12 months to
                                    30 September   30 September       31 March
                                            2000           1999           2000
                                            £000           £000           £000
Operating (loss)/profit                  (2,048)            101        (2,538)
Depreciation charge                          474            592          1,255
Decrease/(increase) in stocks                277          (365)            259
(Increase)/ decrease in debtors              233        (4,031)            904
(Decrease)/increase in creditors         (2,202)        (3,713)        (5,615)
Net cash outflow from
operating activities                     (3,266)        (7,416)        (5,735)



5. Analysis of net (debt)/funds


                                    1 April              Exchange  30 September
                                       2000   Cash Flow  Movement          2000
                                       £000        £000      £000          £000

Cash at bank and in hand              2,997     (2,951)         -            46
Overdraft, included in Creditors          -     (1,709)      (49)       (1,758)
Net cash and bank                     2,997     (4,660)      (49)       (1,712)

Debt due within one year                  -           -         -             -
Finance lease                             -           -         -             -
Total net (debt)/funds                2,997     (4,660)      (49)       (1,712)




6.  Sale of business



                              6 months to        6 months to       12 months to
                             30 September       30 September           31 March
                                     2000               1999               2000
                                     £000               £000               £000

Net assets disposed of:                 -
Tangible fixed assets                   -              1,234              1,338
Stocks                                  -                  9                115
Debtors                                 -                185                741
Cash at bank                            -                  -                  -
Trade creditors                         -               (78)              (646)
                                        -              1,350              1,548
Profit on disposal                      -              1,137              1,071
                                        -              2,487              2,619
Satisfied by:
Cash                                    -              2,487              2,619



7.    Copies of the Interim Review will be mailed to shareholders on 22
December 2000 and may be obtained from the Company Secretary at Kalamazoo
Computer Group plc, Northfield, Birmingham, B31 2RW.



                                                                                
                                                                       

a d v e r t i s e m e n t