RNS Number:9026H
Access Plus PLC
25 February 2003
ACCESS PLUS PLC
Preliminary results for the year ended 31 December 2002
25 February 2003
Access Plus, the Bristol based provider of print related marketing services,
announces its preliminary results for the year ended 31 December 2002 - its
seventh set of full year results since being admitted to the Alternative
Investment Market, in November 1996.
* TURNOVER increased by 2%
* GROSS PROFIT down by (6%)
* PROFIT BEFORE TAX (before bad debt)* down by (11%)
* EARNINGS PER SHARE (before bad debt)* 14.60p
* DIVIDENDS increased by 1.5%
* CASH GENERATION ahead of 2001
*before goodwill amortisation
- Commenting on 2002's trading performance, Tim Brettell, the Chairman said,
"With many newly won contracts contributing only a few months in 2002, the
outlook for growth this year from Print Management work is very positive."
- "With the final dividend maintained at 5.80 pence, this gives a full year
payment to shareholders of 8.675 pence per share - an increase of 1.5% on
2001."
- "Our major three year contract win in late 2001, with a large international
life and pensions group has developed significantly throughout 2002 and now
stands as the Group's leading customer."
- "The Group has made significant progress in broadening its service offering
to its top customer base. The top ten clients accounted for 35% of gross
profits in 2002, an increase of 6% over 2001, whilst diversity was
maintained as no individual company represented more than 6.3%."
- "Cash generation has remained very strong during the year allowing for both
a net repayment of loans and a share buy-back programme. At the year-end,
the Group balance sheet is strong with gearing at 9%, despite the effect of
the share redemptions."
- "The exceptional bad debt announced in November was lower than first
estimated with a final charge of #0.491m. This resulted from a third party
business relationship. The Directors can confirm that there are no other
exposures of this nature amongst its top customers."
For further information:
Tim Brettell Barrie Newton Ken Rees
Access Plus PLC Rowan Dartington Winningtons
Tel: 0117 317 9477 Tel: 0117 925 3377 Tel: 0117 317 9477
(25 February 2003)
Tel: 0117 933 1000 (thereafter)
CHAIRMAN'S STATEMENT
FINANCIAL RESULTS
I am pleased to announce the results for the year to 31 December 2002. In a
testing period with volatile market conditions, sales revenues have advanced by
2% to #30.453m (2001 - #29.780m). Group gross profit was down 6% at #8.585m
(2001 - #9.151m), and gross margins reduced 2.5% to 28.2%.
In November, the Company announced that it had suffered an exceptional bad debt.
At the time, I anticipated that this would cost the Company in the region of
#600,000. As a result of lower than anticipated legal costs and an allowance
for the reclaim of VAT, the cost in 2002 has been reduced to #0.491m. Before
accounting for the effect of this exceptional bad debt and goodwill
amortisation, Group earnings before tax fell by 11% to #3.910m (2001 - #4.406m)
and on the same basis earnings per share declined during 2002, to 14.60p (2001 -
16.97p). It should be noted, however, that the 2001 earnings per share figures
were enhanced by an effective tax rate of 27.6%. After allowing for a full tax
charge, in 2001, earnings per share fell 10.8%.
After charging both the exceptional bad debt, and #0.441m of goodwill
amortisation (2001 - #0.448m), Group earnings before interest and tax fell to
#2.991m (2001 - #4.012m), and Group profit before tax was #2.978m, (2001 -
#3.958m). Basic earnings per share were 10.41p (2001 - 14.58p).
The Group's cash generation has again been very strong during the year. This
has been used firstly to extinguish the remainder of the Group's bank loan, with
the result that a five-year loan has been fully repaid in 2 years. Secondly,
the Company has undertaken a regular share buy-back programme and has acquired
302,435 shares, for cancellation, at a cost of #0.503m. Interest paid has been
reduced from #54,000 in 2001 to #13,000 in 2002. Gearing has been maintained at
9% of shareholders' funds, despite the effect of the share redemptions.
The Directors recommend that the final dividend should be maintained at 5.80p
and that this should be paid on 6 May 2003 to shareholders on the register on 22
April 2003. The shares will go ex-dividend on 16 April 2003. Total dividends
for 2002, paid and proposed, amount to 8.675p per ordinary share (2001 - 8.55p)
showing an increase of 1.5% over last year.
The Group's exceptional bad debt, referred to above, resulted from a third party
business relationship. The Directors can confirm that there is no other
exposure of this nature amongst its top customers.
MARKETS
Print Management is currently the most exciting market in which your Company is
operating. The year 2002 has seen a material increase in corporate activity in
the print management sector with the purchase of Centurion Press Limited by
Communisis plc in May, and then in June the acquisition of Alistair McIntosh by
Williams Lea. This trend towards consolidation within the industry is not
unexpected as there is, at present, considerable fragmentation. Increased size
can be beneficial for print management companies bringing economies of scale and
greater purchasing power. Print managers still only accounted for a very small
part (3% - 4%) of the total UK print market, which is estimated, by some
analysts, to be worth in the region of #12 billion. The overall market
continues to expand and the present activity level experienced by the Group is
high, with large organisations increasingly looking to reduce operating costs by
utilising an outsource service for the first time.
Figures obtained from the Direct Mail Information Service indicate that volumes
in Direct Mail showed a modest improvement during 2002 with an advance of 5.9%
over the previous period. The market was held back by a continued decline in
the Media, Insurance and Retail sectors, representing 26.1% of volumes and a
flat performance from the Financial sector representing 23.2%. In stark
contrast to this Travel, Charity & Leisure were strongly ahead by 22% and Home
Shopping was up by 15.1%.
The overall view of the management is that the market is slowly beginning to
improve after the sharp declines of year 2001.
OVERVIEW OF SERVICES
In the year ended 31 December 2002, Access Plus provided project management
services in these two market areas, in the following three categories:
Print Management (PM) 60% of sales (2001 - 62%)
Direct Mail (DM) 20% of sales (2001 - 19%)
Special & Security Services (SS) 20% of sales (2001 - 19%)
Despite the turbulent market conditions, our strategy of developing and
strengthening our existing customer relationships and, in particular, our top
clients, has remained our principal focus. This has proved to be successful
with six of our top ten customers showing strong growth. The amount of business
coming from the top ten clients has risen to 35% of total gross profit (2001 -
29%). Also repeat business levels have remained high in line with last year.
With many new contracts in the year, the underlying growth in PM was suppressed
for three principal reasons; first one retail client reduced its spend in
December, secondly the loss of the ITV Digital work, and thirdly a timing issue
on a large order from a client that moved across to January 2003. It has,
however, been a period of outstanding activity for new PM work with a number of
good contracts only partially contributing to year 2002 results. This lays
strong foundations for future years.
1. Print Management (PM)
PM sales were flat at #18.148m (2001 - #18.389m), in spite of underlying growth
throughout the year, and additional new contracts. This was for the reasons
stated above. A resumption in strong growth, however, is anticipated this year,
when a full 12 month contribution is expected from these new deals.
2. Direct Mail (DM)
DM sales have risen by 9% to #6.145m (2001 - #5.613m). This increase can be
largely attributed to additional DM work from two new memberships and an
existing client. The overall number of DM clients has remained largely
unchanged and the Company has continued with its strategy of operating in those
niche areas that generate high repeat business.
3. Special & Security Services (SS)
SS sales were recorded at #6.160m (2001 - #5.778m), up 7%. Although our
principal sales focus is currently on PM, this SS performance was indicative of
the modest improvement experienced in the marketing and DM sector.
OUR OBJECTIVES FOR 2003
The management team has considered carefully its objectives for this year. It
anticipates that the current economic conditions may well persist for this year
and next and, therefore, objectives must be drawn up in this context.
* Further development of our top clients, by selling a wider range of
services and increasing revenues from last year's new contracts.
* Recruitment of top class sales executives, with specialist knowledge of
print management based throughout the UK.
* A continued focus on winning large PM contracts.
* Use of our strong cash generation for strategic acquisitions, partnerships
or JVs that can be readily integrated into our existing operating structure.
* The Company will continue its share buy-back policy.
STAFF
Your Company's number one asset is our dedicated and loyal staff. With
difficult market conditions, their perseverance and determination are
impressive. I would like to thank them, on behalf of the Directors and the
Company's shareholders, for their energy, enthusiasm and hard work and to extend
a warm welcome to those new members of staff who have joined us in this period.
Access Plus will continue its successful policy of recruiting only the finest
talent for sales personnel, capable of maintaining a high level of productivity
whilst ensuring first class quality service to the customer.
FUTURE
With many newly won contracts contributing revenues for only a few months of
2002, the outlook for growth this year from PM work, in particular, is very
positive. The year has started well and current sales activity is ahead of last
year for the same period. This together with the slight improvements in the DM
market gives your Directors greater confidence for the year ahead.
Cash generation remains one of the Group's key strengths. The Company's balance
sheet is robust with reduced levels of debt. The Group is, therefore, well
placed to make selective acquisitions in accordance with its strategy.
T G BRETTELL
Chairman & Chief Executive
25 February 2003
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2002
Notes 2002 2001
#000 #000
TURNOVER 2 30,453 29,780
Cost of sales 21,868 20,629
Gross profit 8,585 9,151
Administrative expenses 5,103 5,139
Bad debt 4 491 -
OPERATING PROFIT 2,991 4,012
Bank interest receivable 53 168
Interest payable (66) (222)
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 2,978 3,958
Taxation on profit on ordinary activities 3 1,027 1,217
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 1,951 2,741
Dividends 5 1,610 1,613
RETAINED PROFIT FOR THE FINANCIAL YEAR 341 1,128
Basic earnings per ordinary share 6 10.41p 14.58p
Diluted earnings per ordinary share 10.35p 14.31p
Restated earnings per share before allowing for the exceptional bad debt and #0.441m (2000 - #0.448m) for
goodwill amortisation
Earnings per ordinary share 6 14.60p 16.97p
Diluted earnings per ordinary share 14.51p 16.65p
Dividends per share 5 8.675p 8.55p
GROUP BALANCE SHEET
at 31 December 2002
Notes 2002 2001
#000 #000
FIXED ASSETS
Intangible assets 8 7,920 8,512
Tangible assets 1,732 1,703
9,652 10,215
CURRENT ASSETS
Stocks 1,340 1,092
Debtors 7,460 7,191
Cash 339 2,550
9,139 10,833
CREDITORS: amounts falling due within one year 9 7,643 8,103
NET CURRENT ASSETS 1,496 2,730
TOTAL ASSETS LESS CURRENT LIABILITIES 11,148 12,945
CREDITORS: amounts falling due after more than one year 25 1,680
PROVISION FOR LIABILITIES AND CHARGES
Deferred taxation 57 37
NET ASSETS 11,066 11,228
CAPITAL AND RESERVES
Called up share capital 1,851 1,881
Share premium account 9,705 9,705
Capital redemption reserve 1,130 1,100
Profit and loss account (1,620) (1,458)
EQUITY SHAREHOLDERS' FUNDS 7 11,066 11,228
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2002
Notes 2002 2001
#000 #000
NET CASH INFLOW FROM OPERATING ACTIVITIES 10 3,794 3,692
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest paid (66) (222)
Interest received 53 168
(13) (54)
TAXATION (1,339) (1,574)
CAPITAL EXPENDITURE
Purchase of tangible fixed assets (362) (130)
Disposal of tangible fixed assets 127 91
Deferred consideration paid - (60)
(235) (99)
EQUITY DIVIDENDS PAID (1,627) (1,552)
FINANCING
(Redemption)/issue of share capital net of costs (503) 99
Repayments of Loan Notes (1,952) (225)
Repayments of medium-term loan (1,500) (1,350)
(3,955) (1,476)
MOVEMENT IN CASH IN THE YEAR (3,375) (1,063)
Notes to the Preliminary Accounts
1. Accounting policies
This statement has been prepared on the basis of the accounting policies as
set out in the Group's annual report for the year ended 31 December 2001.
There have been no changes to these policies during the current year.
2. Turnover
Turnover represents amounts derived from the provision of goods and
services during the year stated net of value added tax. The turnover and
pre-tax profit is attributable to one continuing activity, the provision of
print related marketing services from within the United Kingdom. All
turnover is into the United Kingdom apart from less than 1% which is to the
rest of Europe.
3. Taxation
Taxation for year ended 31 December 2002 has been charged at an effective
rate of 30.0%.
4. Exceptional item
Bad debt suffered in 2002, #0.491m, with a taxation credit of #0.147m.
There was no equivalent charge in 2001.
5. Dividends
2002 2001
#000 #000
Under provision in prior year - 5
Interim dividends - paid 536 517
Final dividends - proposed/paid 1,074 1,091
1,610 1,613
The Directors have proposed a final dividend of 5.80p per share (May 2002 -
5.80p per share), payable on 6 May 2003 to shareholders on the register on
18 April 2003. If approved by shareholders, the total dividend for the
year ended 31 December 2002 will be 8.675p (2001 - 8.55p).
6. Earnings per ordinary share
Basic earnings per ordinary share has been calculated by dividing the
profit on ordinary activities after taxation for each financial year
#1.951m (2001 - #2.741m) by the weighted average number of ordinary shares
in issue in each year 18,732,280 (2001 - 18,790,803). At 31 December 2002,
the issued share capital of the Company was 18,508,693 ordinary shares.
Diluted earnings per share has been based on profit for the year of #1.951m
(2001 - #2.741m). The weighted average number of dilutive shares has been
calculated as follows:
2002 2001
Basic weighted average number of shares 18,732,280 18,790,803
Dilutive potential ordinary shares from share options 120,610 355,148
18,852,890 19,145,951
Profit on ordinary activities after taxation of #1.951m (2001 - #2.741m) is
shown after deducting #0.491m (2001 - NIL) in respect of an exceptional bad
debt, and #0.441m (2001 - #0.448m) in respect of goodwill on the
acquisition Software Stationery Holdings Limited ("Software Stationery").
The restated earnings have been calculated by dividing the adjusted profit
of #2.736m (after allowing for the tax credit on the bad debt - see note 4)
by the same weighted average number of shares in issue at 31 December 2002.
There are no changes to the basis for calculating the comparative or the
diluted earnings per share.
7. Reconciliation of movements in equity shareholders' funds
#000
Equity shareholders' funds at 1 January 2002 11,228
Retained profits for the year 341
Ordinary shares redeemed during the year (503)
Equity shareholders' funds at 31 December 2002 11,066
8. Intangible fixed assets
#000
Cost of goodwill:
At 1 January 2002 9,915
Adjustment to contingent deferred consideration payable (note 9) (130)
At 31 December 2002 9,785
Amortisation:
At 1 January 2002 1,403
Provided in the year in relation to Software Stationery 441
Provided for the year 21
At 31 December 2002 1,865
Net book value at 1 January 2002 8,512
Net book value at 31 December 2002 7,920
On 5 July 2000, the Group acquired the entire issued share capital of
Software Stationery. At 31 December 2002, the level of goodwill contingent
upon future events has been revised from #0.750m to #0.620m as the result
of calculating the final deferred consideration. Goodwill arising on this
acquisition is being amortised evenly over its estimated economic life of
20 years.
In addition, #0.250m of goodwill was acquired as part of the acquisition.
Goodwill of #0.243m in Software Stationery represents the cost of the
copyright in the design of business forms for specific accounting software
packages, either by way of absolute assignment or a long term licence.
Goodwill and intangible fixed assets are amortised on a straight line basis
over the assets' estimated economic lives of between four and twenty years.
Goodwill of #7,000 in Software Stationery Specialists Limited represents
the cost of certain customer lists and is being amortised on a straight
line basis over the asset's estimated economic life of four years.
9. Creditors
Deferred consideration of #0.620m is payable, to some of the vendors of
Software Stationery, on 30 April 2003.
10. Reconciliation of operating profit to net cash inflow from operating
activities
2002 2001
#000 #000
Operating profit 2,991 4,012
Depreciation 208 263
(Profit)/loss on disposal of tangible fixed assets (2) 21
Amortisation of intangible fixed assets 21 20
Amortisation of goodwill 441 448
Release of government grants (5) (4)
(Increase)/decrease in stocks (248) 271
(Increase)/decrease in debtors (269) 360
Increase/(decrease) in creditors 657 (1,699)
Net cash inflow from operating activities 3,794 3,692
11. Reconciliation of net cash flow to movement in net debt
#000 #000
Movement in cash (3,375) (1,063)
Repayments of Loan Notes 1,952 225
Repayments of medium-term loans 1,500 1,350
Change in net debt resulting from cash flows 77 512
Non cash flows in net debt - (238)
MOVEMENT IN NET DEBT 77 274
NET DEBT AT 1 JANUARY (1,060) (1,334)
NET DEBT AT 31 DECEMBER (983) (1,060)
12. Analysis of cash, loans and other debt
31 December Cash 1 January
2002 flows 2002
#000 #000 #000
Cash at bank 339 (2,211) 2,550
Bank overdrafts (1,164) (1,164) -
Bank loans - 1,500 (1,500)
Guaranteed Loan Notes (158) 1,952 (2,110)
(983) 77 (1,060)
13. Financial statements
Following a Board Meeting held today, 25 February 2003, the Directors
announce the results and dividends for the year ended 31 December 2002.
These figures do not constitute full accounts within the meaning of section
240 of the Companies Act 1985. They have been extracted from the statutory
accounts for the year ended 31 December 2002, on which the auditors have
issued an unqualified audit report. The statutory accounts have not yet
been delivered to the Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PUUBPPUPWGMC