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Keycom PLC (KCO)

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Friday 28 May, 2010

Keycom PLC

Half Yearly Report

RNS Number : 6760M
Keycom PLC
28 May 2010
 



 

Embargo 7am

28  May 2010

 

KEYCOM PLC

 

INTERIM RESULTS FOR THE SIX MONTHS TO 31 MARCH 2010

 

Keycom plc (the "Company" or the "Group"), is pleased to announce unaudited interim results for the six months to 31 March 2010.

 

FINANCIAL HIGHLIGHTS

 

·      31% rise in revenue to £3,101,000 (2009: £2,369,000)

 

·      110% EBITDA improvement to £740,000 (2009: £352,000)

 

·      A profit of £68,000 (2009: £169,000 loss), representing an improvement of £237,000

 

·      Gross profit margin maintained at 64% (2009: 64%)

 

 

 

Enquiries:

   

Keycom plc                                                                                                    01785 717777

Rod A Matthews, Chief Executive                                                                                                                                                   

www.keycom.co.uk 

 

Seymour Pierce                     

Nandita Sahgal                                                                                                020 71078338

Tom Sheldon                                                                                                   020 71078087

www.seymourpierce.com

 



 

 

 

 

 

 

Keycom plc

 

Interim Results for the six months ended 31 March 2010

 

Chairman's Statement

 

Keycom's turnover was £3,101,000, representing an increase of 31% on the same period in the prior year.  This increase has been the result of new contracts for broadband services into both student and military residential accommodation and the benefits of a full period's trading of Masterpoint Engineering Limited ("Masterpoint") following its acquisition on 22 December 2008.

 

The consolidated income statement for the six months in the prior year does not, therefore, reflect the full benefit of that acquisition, but only 14 weeks of the 26 week period.

 

Trading

 

The turnover for the period was £3,101,000 (2009: £2,369,000), a 31% growth on the same period last year. 

 

EBITDA for the period improved by 110% to £740,000 (2009: £352,000)

 

Keycom, for the first time delivered a profit of £68,000 compared to a loss for the period in the prior year of £169,000; representing an improvement over the same period in the prior year of £237,000.

 

 

Revenue

6 months ended 31 March

 

2010

 

2009

 

Change


£'000

£'000

£'000


Broadband & voice managed services

2,270

1,605

665

+ 41%

Engineering & maintenance services

666

632

34

+ 5%

Training

165

132

33

+ 25%

Total

3,101

2,369

732

 + 31%

 

Gross profit

6 months ended 31 March

 

2010

 

2009

 

Change


£'000

£'000

£'000


Broadband & voice managed services

1,367

1,020

347

+ 34%

Engineering & maintenance services

467

379

88

+ 23%

Training

137

112

25

+ 22%

Total

1,971

1,511

460

+ 30%

 

 

Overall gross margin was 64% (2009: 64%).  That is aligned to the gross margins in the broadband and voice managed services at 60% (2009: 64%).  The engineering and maintenance services businesses generated a gross margin of 70% (2009: 60%), while the training revenue generated a gross margin of 83% (2009: 85%).

 

Administrative expenses continue to be kept under control; at £1,231,000 (2009: £1,159,000). Although turnover and gross profit have increased 31% and 30% respectively, the administrative expenses have only increased by 6%.

 

There have been no exceptional costs in the period (2009: £43,000; incurred as a consequence of the consolidation of the operations of the businesses following acquisition).

 

 

Funding

 

 

The balance sheet reflects net current liabilities of £4,609,000, a level similar to that at 30 September 2009.  Current liabilities include deferred income of £1,011,000. Deferred revenue represents revenue committed by customers but not yet earnt.  As the revenue is earnt over time it is released to the income statement.  The high levels of current liabilities arise from the acquisitions of 2008, which were agreed at that time to be of short term duration.  The company continues to refinance this debt with loans of longer terms.

 

The company has made loan repayments during the six month period of £1,118,000 and raised new loan finance of £1,576,000.  That new loan finance has been raised on 4 and 5 year terms.  Since 31 March 2010, the company has raised a further £900,000 to facilitate settlement of current liabilities.

 

The debt and leasing market continues to be difficult in the UK, but the company continues to make progress with fund raising, albeit on a timetable slower than is preferred.

 

During the six month period, the company has made capital expenditure of £920,000 in respect of new MOD broadband contracts and upgrades to university contracts.  This expenditure has been made to ensure the development of the broadband revenues over the coming months and years. 

 

Prospects

 

Keycom now has contracts for broadband services to 41,000 rooms, of which 11,000 are in the military sector.  The development of the services into the military sector is very recent and will take a few months for the penetration and revenue to develop.  Accordingly, there is very little revenue derived from those military rooms in these financial statements.  The broadband revenue is derived from the 30,000 rooms in the student and key-worker sectors.  The Company has a strong pipeline in the military sector which should lead to significantly more rooms being serviced in the medium term.

 

The increased scale now evident in the Company has moved the Company into profit and provides a firm base for further growth.

 

 

Rod A Matthews

Chairman

 27    May 2010

 

       

  

Keycom plc

Consolidated income statement

for the six months ended 31 March 2010

 


 

 

 

 

Note

 

Six months

to 31 March 2009

   £'000


 

Six months

to 31 March 2009

£'000

Revenue





Continuing operations


3,101


1,831

Acquisitions


-   


538



3,101


2,369

Cost of sales


(1,130)


(858)

Gross profit


1,971


1,511

 

Administrative expenses


 

(1,231)


 

(1,159)

Operating profit/(loss) before depreciation and exceptional items


 

740


 

352

Depreciation


(437)


(349)

Exceptional costs - administrative expenses


-


(43)

 

Operating profit/(loss)

 

 




Continuing operations


303


(236)

Acquisitions



196



303


(40)

Investment income                         


-


-

Finance charges


(235)


(129)

 

Profit/(loss) on ordinary activities before taxation


 

68


 

(169)






Taxation


-


-

 

Profit/(loss) attributable to ordinary shareholders


 

68


 

(169)

 

Earnings per share:


 

Pence


 

Pence

 

Earnings per share - basic

 

2

 

0.01


 

(0.04)

Earnings per share - diluted

2

0.01


(0.04)

 

The Group has no recognised gains or losses other than those included in the results above.

 

    

 

Keycom plc

Consolidated balance sheet

as at 31 March 2010

 


 

 

 

 

As at

 31 March 2010

   £'000


As at

 31 March 2009

£'000


As at

30 September 2009

£'000








Non-current  assets







Goodwill


8,675


9,145


8,667

Property, plant and equipment


4,018


1,873


3,492

 

 


 

12,693


 

11,018


 

12,159

 

Current assets







Trade and other receivables


1,284


1,446


2,064

Cash and cash equivalents


10


155


70



1,294


1,601


2,134








Current liabilities







Trade and other payables


3,019


1,436


2,985

Deferred consideration


740


290


690

Deferred income


1,011


1,167


1,700

Current tax



41


Borrowings


1,133


2,136


1,395



5,903


5,070


6,770








 

Net current assets/(liabilities)


 

(4,609)


 

(3,469)


 

(4,636)








Non-current liabilities







Deferred consideration


457


1,190


610

Borrowings


2,037


428


1,401



2,504


1,618


2,011








 

Net assets


 

5,580


 

5,931


 

5,512

 

Equity







Ordinary shares


4,822


4,822


4,822

Share premium account


17,095


17,095


17,095

Other reserve


459


459


459

Retained earnings


(16,796)


(16,445)


(16,864)

 

Equity shareholders' funds

 

 

 

5,580


 

5,931


 

5,512

 

 

 

Keycom plc

Consolidated statement of changes in shareholders' equity

for the six months ended 31 March 2010

 

 


Six months to 31 March 2010

Six months to 31 March 2009

Year to

30 September 2009


£'000

£'000

£'000





Opening equity

5,512

6,100

6,100





Net profit/(loss) for the period attributable to equity shareholders

 

68

 

(169)

 

(588)





Closing equity

5,580

5,931

5,512

 

 



Keycom plc

Consolidated cash flow statement

for the six months ended 31 March 2010

 



Six months to 31 March 2010

Six months to 31 March 2009

Year to

30 September 2009


Note

£'000

£'000

£'000











Cash generated/(absorbed) by operations

3

816

922

1,490






Net interest paid


(235)

(129)

(305)






Net cash inflow/(outflow) from operating activities


581

793

1,185






Investing activities





Interest received


-

-

4

Purchases of property, plant and equipment


(920)

(418)

(1,509)

Deferred consideration paid


(103)

(20)

(340)

Acquisition of subsidiaries and businesses


-

(1,762)

(2,565)

Cash acquired with subsidiaries and businesses


-

283

423





Net cash used in investing activities

(1,023)

(1,917)

(3,987)






Financing activities





Proceeds from issue of shares (net of expenses)



-


Receipt of bank loans


751

-

-

Receipt of other loans & lease obligations


825

150

2,765

Repayment of bank & other loans & lease obligations


(1,118)

(310)

(1,399)






 

Net cash generated by financing activities


 

458

 

(160)

 

1,366






Net increase/(decrease)  in cash and cash equivalents

4

16

(1,284)

(1,436)






Cash and cash equivalents at start of period


(32)

1,404

1,404






 

Cash and cash equivalents at end of period


 

(16)

 

120

 

(32)

 

 


Notes to the financial information

 

1. Segmental information

 

Revenue and operating profit

 


Six months ended

31 March 2010

Six months ended

31 March 2009

Year ended

30 September 2009


 

Revenue £'000

Operating profit

£'000

 

Revenue £'000

Operating profit

£'000

 

Revenue £'000

Operating profit

£'000

 

By class of business:







 

Broadband & voice managed services

 

2,270

 

481

 

1,605

 

224

 

3,315

 

367

 

Engineering & maintenance

 

666

 

157

 

632

 

29

 

1,277

 

46

 

Training

 

165

 

50

 

132

 

35

 

264

 

46

 

 

 

3,101

 

688

 

2,369

 

288

 

4,856

 

459

 

Central costs


 

(385)


 

(328)


 

(706)

 

Profit/(loss) from operations


 

303


 

(40)


 

(247)

 

2.  Earnings per share

 

The calculation of earnings per share figures for the six months ended 31 March 2010 is based on the profit attributable to ordinary shareholders of £68,000 (six months 2009: loss £(169,000); twelve months 2009: loss £(588,000) divided by the weighted average number of shares in issue as detailed in the table below.   

 


Six months to

31 March 2010

Six months to

31 March 2009

Year to

30 September 2009


Number of shares

Weighted average

Number of shares

Weighted average  

Number of shares

Weighted average  

 

Basic - shares in issue

 

482,243,378

 

482,243,378

 

482,243,378

 

482,243,378

 

482,243,378

 

482,243,378

 

Share options that have a dilutive effect


 

-


 

-


 

-

Diluted - adjusted number of shares


 

482,243,378


 

482,243,378


 

482,243,378

 

 

3.  Reconciliation of operating profit to net cash inflow from operating activities

 


Six months to 31 March

 2010

Six months to 31 March 2009

Year to

30 September 2009


£'000

£'000

£'000

Operating profit/(loss)

303

(40)

(247)

Depreciation

437

349

785





 

Operating cash flow before movements in working capital

 

740

 

309

 

538





(Increase)/decrease in receivables

780

741

142

Increase/(decrease) in payables

(704)

(128)

810





 

Cash generated by operations

 

816

 

922

 

1,490

 

4.  Reconciliation of net cash flow to movement in net debt

 


Six months to 31 March

 2010

Six months to 31 March 2009

Year to

30 September 2009


£'000

£'000

£'000





Net debt at start of period

(2,726)

(259)

(259)





Increase/(decrease) in cash in the period

16

(1,284)

(1,436)

Cash inflow/(outflow) from decrease/(increase) in debt and lease financing

 

(450)

 

(590)

 

(615)

Non cash flow changes - debt acquired on acquisitions

(276)

(416)





Net debt at end of period

(3,160)

(2,409)

(2,726)

 

 

5.  Analysis of net debt

 


Six months to 31 March

 2010

Six months to 31 March 20089

Year to

30 September 2009


£'000

£'000

£'000





Cash at bank net of overdrafts

(16)

120

(32)

Bank loans

(714)

(279)

(240)

Other loans

(2,227)

(1,947)

(2,247)

Lease obligations

(193)

(303)

(207)

Net debt

(3,160)

(2,409)

(2,726)

 

 

 

The Interim Statement, which has been reviewed but not audited by the Group's auditors CLB Coopers, was approved by the Board on 27 May 2010.

 

Copies of this statement will be sent to shareholders shortly and are available to the public from the Company website www.keycom.co.uk.

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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