Interim Results
September 15 2003 - 9:30AM
UK Regulatory
RNS Number:7649P
VI Group PLC
15 September 2003
15 September 2003
Press Release
VI GROUP plc
Interim results for the six months to 30 June 2003
VI Group plc ("VI" or "the Group"), one of the leading suppliers of CAD/CAM
software to the mould and die sector, announces today its results for the six
months to 30 June 2003.
Highlights
* Turnover growth of 36% to #4.4 million (2002: #3.2 million) reflecting
both organic growth and increased turnover resulting from past acquisitions.
* Market share increased, with sales performance far outstripping VI's
direct competitors who returned negative or single figure sales growth over
the period.
* Gross Margin increased to #3.4m (2002: #2.4m) and as a percentage of
turnover it rose to 77% (2002: 75%)
* A #0.4m increase in earnings before interest, tax, depreciation and
amortisation (EBITDA) to #0.2 million (2002: Loss before interest, tax,
depreciation and amortisation of #0.2 million).
* Loss on ordinary activities after taxation of #0.3 million (2002: Loss
of #0.3 million) after additional amortisation of goodwill charges of #0.2m
for acquisitions are taken into account
* New Tokyo office opened in April responding to increased demand in the
region for VI mould and die design products
Commenting on the interim results, Don Babbs, Chief Executive of VI, said:
"We have put the proceeds of our fundraising of 2002 to good use, producing
excellent sales growth through the first half of the year which was ahead of our
own expectations, despite the general background of poor economic conditions in
our major markets. The new sales and development teams have integrated well into
the VI structure, successfully capitalising on our investment in product
development and sales channels. Our continued success in what is the harshest
economic environment for more than a decade in the mould and die industry
underlines the strength of the Group."
- Ends -
For further information:
VI Group plc
Don Babbs, Chief Executive Tel: 01453 732900
Merlin Financial Tel: 020 7606 1244
Paul Downes/Tom Randell
Durlacher Tel: 020 7459 3600
Matthew Robinson
Attached: Chairman's Statement
Unaudited consolidated profit & loss account
Unaudited consolidated balance sheet
Notes to the interim results
Chairman's Statement
I am pleased to announce the Group's interim results for the six months to 30
June 2003 and to report on the progress of the group to date.
As I reported last year we believed that the injection of finance in May 2002
could be readily converted into strengthened sales over the following twelve
months. This has indeed been our experience in spite of a background of poor
economic indicators including the effect of the SARS outbreak that held back the
market's expansion in China, a stronger Euro that reduced many of our customer's
manufacturing orders across Europe, and uncertainties surrounding the recovery
of worldwide demand generally. Our competitors have leaned heavily on these
factors when reporting their results recently and have generally reported low
levels of growth often resulting only from currency exchange rate effects. This
compares with 33% revenue growth achieved by VI Group measured at constant
exchange rates. Encouragingly VI has recently been reported by CIMdata of the
USA as the only supplier included in the top five fastest growing CAM vendors
for each of the past 5 years.
Trading conditions in our key markets have continued to be difficult and
corporate expenditure decisions are still often delayed; however the
productivity increases offered by VI products outweigh these factors for many
of our customers.
Financial results
Group turnover for the six month period increased by 36% to #4.4 million (2002
#3.2 million). Earnings before interest, tax, depreciation and amortisation
(EBITDA) rose to #0.2m (2002: loss of #0.2m). The loss on ordinary activities
before taxation was #0.2 million (2002: loss of #0.4m) after a charge of #0.24m
for amortisation of goodwill is taken into account. The loss on ordinary
activities after taxation was #0.3 million (2002: loss of #0.3 million). The
resulting basic loss per share was 0.78 pence (2002: loss per share of 1.04
pence).
Cash balances were #1.5 million at 30 June 2003 (31 December 2002: #1.2m).
Debtors fell slightly to #5.5m (31st December 2002: #5.7m) and the underlying
trade debtors also fell despite the steep increase in sales revenues. This is in
part due to the particular attention shown to arranging customer finance for
sales in geographic areas such as Italy where extended payment terms are the
standard.
Trading
Nearly all of the sales areas reported first half growth with the stronger
percentage growths coming from the areas where we have invested in new offices,
namely France, Japan and Canada. UK sales doubled with respect to last year
helped by the Machining Strategist acquisition, and the smaller and emerging
markets also grew strongly following internal investments in indirect sales. Our
largest markets of Germany and Italy grew by nearly 10% but exchange rate
changes damaged the prospects for exports from the Euro zone and remain a
concern for the second half. North America continued to grow compared to last
year against a background of slow recovery and a depressed automotive sector.
Other Business Developments
We opened our Tokyo office in April which assumed technical and commercial
responsibility for the Japanese dealers that had previously been supplied by an
exclusive distributor since 1994. The staff are already familiar with VI's
product range and sales channels and will promote sales within the region more
aggressively, having contributed positively to the first half result.
All of our recent acquisitions have now been successfully integrated within the
VI structure and are collectively producing positive returns to the business.
The litigation detailed as a contingent liability in the 2002 annual report
arising from the Machining Strategist acquisition is ongoing and VI has, through
its legal advisors, filed a counterclaim for damages against NCG. VI is
committed to resolving the litigation as quickly and as cost effectively as
possible.
As recently announced I would like to welcome Julie Randall to the position of
group finance director. The decision to promote Julie internally from her
position as group financial controller was taken after an extensive review of
alternative candidates and a gradual increase in her responsibilities which she
has taken in her stride. She is ably supported by a similarly qualified
controller and other suitably qualified staff that will be a formidable
accounting and finance team for our future growth.
Product development
With our competitors falling to the general market malaise VI has gained
considerable market share over the period and intends to intensify this assault
with further extensions and improvements to its product lines in the second half
of the year. The introduction of Release 11 of VISI-Series and Release 6 of
Machining Strategist in the near future will add hundreds of new features to the
product lines and provide further productivity gains for existing users,
generating new prospects from customers looking to convert from older solutions.
Outlook
VI will strive for continued growth by virtue of its recent investments in sales
and product development teams. Managing this growth to provide consistent
earnings is a particular challenge in an uncertain economic climate. VI remains
convinced of its twin strategy to grow organically and through acquisition. The
first objective will be aided by a broadening product base and the Group has
commenced a number of innovative research programmes to carry it into the next
decade. VI continues to evaluate acquisition possibilities that add product or
distribution synergies in its major markets and the current conditions are
providing a number of opportunities at attractive valuations.
Stephen Palframan
Chairman
15 September 2003
Unaudited Consolidated Profit and Loss Account
Six months to Six months to Year ended
30 June 2003 30 June 2002 31 Dec 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover 4,365 3,200 7,542
Cost of sales (998) (784) (1,595)
--------- --------- ---------
Gross profit 3,367 2,416 5,947
Selling expenses (1,569) (1,279) (2,917)
Administrative expenses (941) (822) (1,686)
Product development (722) (520) (1,282)
Net other operating income 62 - 458
--------- --------- ---------
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 197 (205) 520
Depreciation (120) (85) (195)
Amortisation of goodwill and
other intangible assets (244) (66) (278)
--------- --------- ---------
Operating (Loss) profit (167) (356) 47
Net interest and similar charges (60) (1) 23
--------- --------- ---------
(Loss) profit on ordinary
activities before taxation (227) (357) 70
Taxation on profit on ordinary
activities (65) 90 (301)
--------- --------- ---------
(Loss) Profit on ordinary
activities after taxation (292) (267) (231)
========= ========= =========
(Loss) earnings per share
- basic (pence) (0.78)p (1.04)p (0.74)p
- diluted (pence) (0.78)p (1.04)p (0.74)p
Shares used in computing
earnings per share (thousands)
- basic 37,261 25,731 31,228
- diluted 37,261 25,731 31,228
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six months to Six months to Year ended
30 June 2003 30 June 2002 31 Dec 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
(Loss) profit for the period (292) (267) (231)
Exchange movements 10 (4) (5)
--------- --------- ---------
Total recognised (losses) gains (282) (271) (236)
========= ========= =========
Unaudited Consolidated Balance Sheet
As at As at As at
30 June 2003 30 June 2002 31 Dec 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets:
Intangible fixed assets 1,724 508 1,963
Tangible fixed assets 557 449 636
--------- --------- ---------
2,281 957 2,599
--------- --------- ---------
Current assets:
Stock 22 35 20
Debtors 5,495 4,064 5,675
Cash at bank and in hand 1,514 3,137 1,185
--------- --------- ---------
7,031 7,236 6,880
Creditors: amounts falling due
within one year
(3,040) (2,008) (2,924)
--------- --------- ---------
Net current assets 3,991 5,228 3,956
--------- --------- ---------
Total assets less current 6,272 6,185 6,555
liabilities
Creditors: amounts falling due
after more than one year (124) (57) (146)
Provisions for liabilities and charges (263) (222) (242)
--------- --------- ---------
Net Assets 5,885 5,906 6,167
========= ========= =========
Capital and reserves:
Share capital and share premium 6,046 5,820 6,046
Other reserves 10 10 10
Profit and loss account (171) 76 111
--------- --------- ---------
Equity shareholders' funds 5,885 5,906 6,167
========= ========= =========
Notes to the interim results
1. The unaudited results for the six months to 30 June 2003 have been
prepared on the basis of accounting policies consistent with those adopted for
the year ended 31 December 2002, as stated in the report and accounts for the
Group, and are presented to United Kingdom generally accepted accounting
principles. The financial information does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. Statutory accounts
for the year ended 31 December 2002, incorporating an unqualified audit report,
have been filed with the Registrar of Companies.
2. The Directors do not propose any payment of a dividend.
3. Earnings per share figures have been calculated on the profit for the
period divided by the weighted average number of shares.
4. Copies of the interim report will be posted to shareholders and made
available to the public at the Company's registered office: VI Group plc, The
Mill, Brimscombe Port, Stroud, Gloucestershire GL5 2QG, or by accessing the
Company's website (www.vero-software.com).
This information is provided by RNS
The company news service from the London Stock Exchange
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