RNS Number:7838R
Atlantic Global PLC
27 September 2005
Press Release 27 September 2005
Atlantic Global Plc
Interim Results
Atlantic Global Plc, the specialist provider of integrated business and resource
management software applications, today announces its Interim Results for the
six month period ended 30 June 2005.
Summary of six months to 30 June 2005
* Turnover of #930,000 (H1 2004: #988,000)
* Loss before taxation and amortisation of #377,000 (H1 2004: Profit #212,000)
* Sales and marketing expenditure increased to #826,000 (H1 2004: #392,000)
in anticipation of increased demand for core products
* Flagship product, Corporate VisionTM, now installed within several new blue
chip users
* Existing users extending deployment of Corporate VisionTM within their
businesses
* Continuing industry accolades, including recognition in Gartner's 'Magic
Quadrant' - (Only British vendor, one of only two European vendors, and one
of only 20 vendors worldwide within the emerging Project Portfolio
Management software sector)
* Since the end of June 2005 trading has included two Corporate VisionTM
deals with a combined value of #370,000, 90% of which will fall within the
current financial year
* Further contract wins expected in second half
Steve Allen, Chairman of Atlantic Global, commented:
"Whilst sales, in line with our pre-close half year trading statement, have been
slow, our focus for the first half has been to invest in marketing, R&D and our
consultancy team. We are confident that this investment will deliver benefits in
the second half of the financial year. Furthermore the recent management
changes, as announced on 22 September, ensure that Atlantic Global has the most
appropriate board to deliver these results."
- Ends-
For further information please contact:
Atlantic Global Plc
Eugene Blaine, Managing Director Tel: +44 (0) 1274 863 300
Rupert Hutton, Finance Director
eugene.blaine@atlantic-global.co.uk www.atlantic-global.co.uk
rupert.hutton@atlantic-global.co.uk
Abchurch
Sarah Hollins/Justin Heath Tel: +44 (0) 113 203 1341
sarah.hollins@abchurch-group.com
Chairman's Statement
Introduction
I am pleased to present the group's Interim Results for the six-month period
ended 30 June 2005. Our activity for the period has shown progress within the
group. Significant reference sites continue to be created and established for
our enterprise solution, Corporate VisionTM. In the first half of the year, we
have been able to understand better the potential return on investment for our
customers. As a result, there has been a substantial reorganisation of the sales
and marketing function, we are expecting to see the benefits from this in the
second half of the year, and beyond.
Financial Review
In line with the Trading Update of 7 July 2005, the loss before taxation and
amortisation of goodwill was #377,000, compared to a profit before taxation and
amortisation of goodwill of #212,000 in the first six months of 2004. Turnover
was #930,000, compared to #988,000 in the same period of 2004. The loss before
taxation for the period was #468,000, (2004 profit: #121,000).
The loss has been stated after a more than doubling of sales and marketing
expenditure to #826,000 for the period, (2004: #392,000). In addition, we have
increased the size of our consultancy team who are responsible for the customer
software demonstrations, software installation and user training. This
investment has taken place in anticipation of customer demand for these services
in the second half of 2005. Furthermore, the Group has continued to invest in
the research and development of its software products, the expenditure on which
amounted to #140,000 during the period (2004: #151,000).
During a period that was supported by significant investment, Atlantic Global
has experienced a disappointing sales and profit performance for the half year.
However we believe that the investments made during the first six months of 2005
will deliver increased sales during the second half of 2005.
Loss per share of 1.55p was generated for the six-month period, (2004 earnings
per share: 0.27p). Adjusted Loss per share (before amortisation of goodwill) was
1.16p, (2004 earnings per share before amortisation of goodwill: 0.67p).
As at 30 June 2005, the Group had a net cash balance of #1,479,000, (2004:
#2,242,000). The cash balance has fallen by #417,000 since the end of December
2004. The Group remains financially secure, and the Directors expect to generate
cash in the future as it returns to profitability.
Dividend
The Directors intend to continue to pursue their progressive dividend policy.
At the current time, the Directors believe that any dividend should be proposed
at the end of the year and therefore do not intend to commence a policy of
paying an interim dividend for 2005.
Current Trading
As can be seen in the Operating Review below, the Group is experiencing a high
level of customer interest and activity and has made large increases in its
investment in sales and marketing to accelerate the growth of the business.
This is beginning to make a difference, as reported on in the Operating Review
below. In addition to the higher costs, we continue to experience much longer
sales cycles linked with larger contract sizes. Due to the above factors, the
Directors currently expect the Group to return to profitability (before taxation
and amortisation of goodwill), during the second half of 2005 and to be able to
recover the first half loss. This indication is made, following a prudent
review, and includes our best estimation of the expected sales contracts for the
second half of 2005.
Since the end of June 2005 trading has included two deals with a combined value
of #370,000, 90% of which will fall within the current financial year. Both
clients are existing users of our Atlantic Global Business Solutions software
who, convinced of the future benefits that can be derived, have now purchased
Corporate VisionTM.
The Directors believe that the continuing investment and commitment to the sales
process is a clear measure of their confidence in the improved prospects of the
Group since the development and introduction of Corporate VisionTM.
Operating Review
During the period the Group made progress in many areas, highlights of which
were:
* Our enterprise solution Corporate VisionTM has now been installed within
several blue chip organisations most recently Virgin Mobile, Norwich Union
Life Marketing and Harvey Nash. Corporate VisionTM continues to be of
extensive interest to a wide variety of both existing and potential clients.
* Existing customers are extending their deployment of Atlantic Global
Software throughout their companies and recent "roll outs" have included
Xchanging, Friends Provident, LogicaCMG and Norwich Union Central Services.
* New customers for our Atlantic Global Business Solutions product
include The Airmiles Travel Company, Helmsley Fraser, AMR international
The development of Corporate VisionTM is continuing apace with many enhancements
being included in the application following valuable feedback provided by our
clients.
Corporate VisionTM is a single software solution that combines planning,
operational execution and performance measurement through the provision and
sharing of real-time management information and is capable of significantly
changing how an organisation operates and makes business decisions.
Discussions with Gartner over the last 6 months have intensified resulting in
the inclusion of Atlantic Global in the Gartner Magic Quadrant. This has
provided the Group with increased market awareness as one of the leading Project
and Portfolio Management Solution Providers World Wide and the only UK company
recognised within the Gartner Magic Quadrant. We have also been in frequent
discussion with the Butler group this has resulted in several publications
including Atlantic Global as a major player around Information Technology
Corporate Governance and instilling business best practice.
The mix of integrated marketing campaigns has resulting in large brand exposure
for Atlantic Global particularly within the business audience targeted. This in
turn has attracted some very proactive partner opportunities for the group.
Following the extensive first half marketing activity, the focus for the second
half-year is a series of six seminars that will be delivered jointly by Atlantic
Global and our new partners. The Group has been very encouraged by the
registered attendees at the events, with all seminars being oversubscribed.
Board Changes and Group Reorganisation
The Group has already commenced the search for a new Chairman following the
departure of David Cox, as announced on 22 September 2005. In the interim
period, I will fulfil the role of Chairman. Lewis Howcroft (Non-executive
Director) has also retired from the Group. The Directors would like to thank
them both for their contribution towards the development of the Group during
their tenure.
Due to the restructuring and utilisation of a smaller more focussed Sales team
and process, Phil Alcock who formerly led the sales team has also left the
group.
The Sales team will be led by Eugene Blaine who can bring his detailed
understanding of the group's products and services, allied to his understanding
of the business problems being solved, to aid the sales process.
Outlook
At the end of the first half of 2005, Corporate VisionTM continued to be
successfully installed in a number of major blue-chip companies. With high
quality, constantly improving products and the solid sales pipeline should lead
to higher sales in the second half. The Directors believe that the Group will,
during 2005 as a whole, achieve a satisfactory level of growth, and look forward
to increasing success in 2006 and beyond.
On behalf of the Board, I would like to mention our staff, who has continued to
perform to their usual high standards. I would like to congratulate them all for
their contributions that have enabled the Group to make progress throughout the
recent period of reorganisation.
Steve Allen
Chairman
27 September 2005
Atlantic Global Plc
Consolidated profit and loss account
for the six months ended 30 June 2005
Six Six Year
(notes) months to months to ended
30 June 30 June 31 December
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
(As restated) (As restated)
# 000 # 000 # 000
Turnover 930 988 2,146
Cost of sales (770) (447) (1,296)
Gross profit 160 541 850
Administration and establishment expenses (662) (455) (738)
Operating (loss)/profit before goodwill (411) 177 293
amortisation
Goodwill amortisation (91) (91) (181)
Operating (loss)/profit (502) 86 112
Interest receivable 34 35 76
(Loss)/profit on ordinary (468) 121 188
activities before taxation
Tax on (loss)/profit on 4 113 (59) (56)
ordinary activities
(Loss)/profit on ordinary (355) 62 132
activities after taxation
Dividends 5 (172) (159) (159)
Retained (loss)/profit for (527) (97) (27)
the period
Earnings per share 6 (1.55)p 0.27p 0.58p
Diluted earnings per share 6 (1.55)p 0.23p 0.50p
Consolidated balance sheet
as at 30 June 2005
As at As at As at
30 June 30 June 31 December
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
(As restated) (As restated)
# 000 # 000 # 000
Fixed assets
Tangible assets 56 47 37
Goodwill 2,882 3,063 2,973
2,938 3,010
3,110
Current assets
Debtors 1,226 858 1,449
Cash at bank and in hand 1,479 2,242 1,896
2,705 3,100 3,345
Creditors: amounts falling due within one year (627) (763) (812)
Net current assets 2,078 2,337 2,533
Net assets 5,016 5,447 5,543
Capital and reserves
Called up share capital 1,145 1,140 1,145
Share premium account 1,578 1,557 1,578
Other reserves 2,538 2,538 2,538
Profit & loss account (245) 212 282
Shareholders' funds - equity 5,016 5,447 5,543
Reconciliation of movements in shareholders funds
As at As at As at
30 June 30 June 31 December
2005 2004 2004
(Unaudited) (Unaudited) (Audited)
(As restated) (As restated) (As restated)
# 000 # 000 # 000
Profit for the period (355) 62 132
Dividends (172) (159) (159)
Issue of new share capital - 15 41
Net (reduction in)/addition to shareholders funds (527) (82) 14
Opening shareholders funds as previously stated 5,371 5,370 5,370
Prior year adjustment 172 159 159
Opening shareholders funds as restated 5,543 5,529 5,529
Closing shareholders funds 5,016 5,447 5,543
Summarised group cash flow statement
for the six months ended 30 June 2005
Six months Year ended 31
Six months to to 30 June December
30 June 2005 2004 2004
#000 #000 #000
Cash flow from operating activities
Operating (loss)/profit (502) 86 112
Depreciation 15 14 30
Goodwill amortisation 91 91 181
Decrease/(increase) in debtors 237 (84) (677)
(Decrease)/ increase in creditors (89) (39) 160
Net cash (outflow)/inflow from operating (248) 68 (194)
activities
Returns on investment 34 34 76
Taxation 3 - (146)
Capital expenditure (34) (12) (18)
Free cash flow (245) 90 (282)
Equity dividends paid (172) (159) (159)
Cash (outflow) before management of liquid (417) (69) (441)
resources and financing
Management of liquid resources - (310) -
Financing - 15 (41)
Net decrease in cash in the period (417) (364) (400)
Notes to the interim report
1. The interim financial statements for the six months ended 30 June 2005 have
been prepared using accounting policies consistent with those set out in the
annual report and accounts of Atlantic Global Plc for the year ended 31
December 2004.
2. The accounts for the year ended 31 December 2004 have been restated for the
requirements of FRS21 'Events after the balance sheet date' and FRS22 '
Earnings per share'. The effect of compliance with the relevant elements of
FRS21 is set out in note 5 below. In accordance with FRS22, the adjusted
earnings per share has been removed from the face of the profit and loss
account and further details on the split of earnings per share between pre
and post goodwill charges are shown in note 6 below. Compliance with FRS21
and FRS22 has not increased shareholders funds at 30 June 2004 (31 December
2004: increase of #172,000) and the profit for the six months to 30 June
2004 decreased by #159,000(12 months to 31 December 2004: increased by
#172,00).
3. The interim financial information for the six months ended 30 June 2005 is
unaudited and does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985. The information has been reviewed by
the Company's auditors and their report is set out in this interim report.
4. The tax charge for the period is based on the anticipated effective tax rate
for the year to 31 December 2005.
5. Under FRS21 dividends declared after the year end no longer meet the
definition of a liability and are only recognised in the period that they
are declared and appropriately approved. The group has therefore been
required to restate the dividend charges in previous years and to include in
the half year to 30 June 2005 the charge previously shown in the annual
accounts for 2004 for the 0.75p dividend paid on 12 May 2005. As in 2004,
the directors do not recommend the payment of an interim dividend.
6. Basic earnings per share are calculated on the loss on ordinary activities
after taxation of #355,000 (2004: profit of #62,000) and on 22,899,000
ordinary shares, being the weighted average number of ordinary shares in
issue in the period (2004: 22,800,000 ordinary shares). Shares options in
issue in the period do not have a dilutive impact on the loss per share
calculation and diluted earnings per share are calculated on the loss on
ordinary activities after taxation of #355,000 (2004: profit of #62,000) and
on 22,899,000 ordinary shares, being the weighted average number of ordinary
shares in issue in the period. In 2004, diluted earnings per share was
calculated on the loss on ordinary activities after taxation of #62,000 and
on 26,957,000 ordinary shares, being the weighted average number of ordinary
shares in issue in the period adjusted for the dilutive effect of share
options outstanding. Adjusted earnings per share has been calculated due to
the material effect of goodwill charged in the financial statements.
Unaudited Unaudited Audited
Six months to Six months to Year ended
30-Jun 30-Jun 31-Dec
2005 2004 2004
#000 #000 #000
(lLoss)/profit after tax (355) 62 132
Adjustments
Goodwill amortisation 91 91 181
Adjusted (loss)/profits (264) 153 313
Adjusted (loss)/earnings per share (1.16) 0.67p 1.37p
Independent review report by KPMG Audit Plc to Atlantic Global Plc
Introduction
We have been instructed by the Company to review the financial information set
out, and we have read the other information contained in the interim report, and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement. Our Review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the AIM
rules which require that the interim report must be presented and prepared in a
form consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such accounts.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed.
A review is substantially less in scope than an audit performed in accordance
with Auditing Standards and therefore provides a lower level of assurance than
an audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
KPMG Audit Plc
Chartered Accountants
28 September 2005
This information is provided by RNS
The company news service from the London Stock Exchange
END
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