RNS Number:4515J
Atlantic Global PLC
26 September 2006
Press Release 26 September 2006
Atlantic Global Plc
Interim Results
Atlantic Global Plc ("Atlantic Global" or "the Company"), the specialist
provider of Project Portfolio Management (PPM) software applications, today
announces its Interim Results for the six month period ended 30 June 2006.
Highlights
* Turnover of #933,000 (H1 2005: #930,000)
* Strong balance sheet - net cash #1,915,000 (H1 2005: #1,479,000)
* Loss before tax and amortisation #139,000 (H1 2005: #389,0001)
* Re-profiled cost base, including reduction of sales and marketing
expenditure to #561,000 (H1 2005: #826,000)
* Product enhancements and strong position in the growing PPM market
recognised by leading software industry analyst, Gartner
* Investing in future growth via increased research and development
spend of #184,000 (H1 2005: #140,000)
* New business with flagship clients such as: Provident Financial,
Tiscali and Aircom
* Ongoing repeat business with: Norwich Union Insurance, GlaxoSmithKline
and Xchanging
Steve Allen, Chairman of Atlantic Global, commented:
"I am pleased to report that, after a challenging few years for Atlantic Global,
we have stabilised the Company's operations, reducing the losses considerably.
This is testament not just to continued cost-cutting measures but, most
importantly, to a more focussed sales team and methodology. By working in
closer partnership with prospective customers, in many cases through paid-for
evaluation, we have considerably increased both the relevance and the
reliability of our new business pipeline. Despite the control on expense we
have increased spend on research and development to ensure our products continue
to offer significant benefits to our customers, and are easy to use, and
implement, allowing faster ROI achievement. All of these measures have combined
to provide a firm foundation for greater stability and increasing success."
- Ends -
1 Restated for the requirements of FRS20 (see note 5)
For further information please contact:
Atlantic Global Plc
Eugene Blaine, Managing Director Tel: +44 (0) 01274 863 300
eugene.blaine@atlantic-global.com
Rupert Hutton, Finance Director Tel: +44 (0) 01274 863 300
rupert.hutton@atlantic-global.com www.atlantic-global.com
Media enquiries:
Abchurch Communications
Justin Heath/Louise Thornhill Tel: +44 (0) 20 7398 7700
justin.heath@abchurch-group.com www.abchurch-group.com
Chairman's Statement
Introduction
I am pleased to report that during the first half of this year, Atlantic Global
has made significant improvements in the Group's sales approach and methodology,
which have resulted in us working very closely with an increasing number of new
and existing prospects and customers. This should show benefits in the second
half year and beyond.
The reported results for the half year show a much reduced loss due to cost
saving measures that were taken during the fourth quarter of 2005 and continued
into the first quarter of 2006. The Group is now entering a period of
stability, with an experienced and motivated team that I believe can deliver
improved results in the future.
We have gained new Project Portfolio Management (PPM) software customers
including Provident Financial, Tiscali, and Aircom. The Group continues to
develop successful relationships with our existing customers as evidenced by new
sales being made to Norwich Union HR (a division of Norwich Union Insurance),
GlaxoSmithKline, and Xchanging.
Financial Review
In line with the Trading Update of 13 July 2006, the loss before taxation and
amortisation of goodwill was #139,000, compared to a loss before taxation and
amortisation of goodwill of #389,000 in the first six months of 20051. Turnover
was #933,000, compared to #930,000 in the same period of 2005. The loss before
taxation for the period was #230,000, (2005 loss: #480,000).
The loss has been stated after sales and marketing expenditure of #561,000 for
the period, (2005: #826,000). Demand for our consultancy services has increased
as predicted by 18%, with more chargeable "pre-sales" consultancy being carried
out. Furthermore, the Group has continued to invest in the research and
development of its software products to remain competitive, the expenditure on
which amounted to #184,000 during the period (2005: #140,000).
Loss per share of 0.82p was generated for the six-month period, (2005 loss per
share: 1.60p). Adjusted loss per share (before amortisation of goodwill) was
0.42p, (2005 loss per share before amortisation of goodwill: 1.21p).
As at 30 June 2006, the Group had a net cash balance of #1,915,000, (2005:
#1,479,000). The cash balance has increased by #376,000 since the Group's
financial year end of December 2005. The Group therefore 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 as
demonstrated over the years. As in previous years, 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 2006.
Current Trading
In line with our new sales methodology, we are working much more closely with
our prospective customers. This approach has resulted in paid for evaluation
workshops being undertaken with them enabling a much better qualification of the
business opportunity and clearer understanding of their needs. However this can
result in us experiencing longer sales cycles on our deals due to the scheduling
of workshops.
Whilst it is too early to predict accurately what degree of success the Group
will achieve during 2006 as a whole, we are encouraged to see that our sales
methodology is being adopted enthusiastically by our prospective customers.
Operating Review
Significant investments have been made to ensure our products are intuitive,
easier and quicker to implement, which allows customers to achieve Return on
Investment as soon as possible.
Atlantic Global has improved its profile with Industry Analysts, as evidenced by
our position within the new 2006 Gartner Magic Quadrant published in July. We
remain the only UK registered company, and one of two European Information
Technology companies recognised within the Quadrant.
Following the success of the first half marketing activity, the focus for the
second half year will be more of the same. The Group has been very encouraged
by the level of pre-registered attendees to our Annual User Group, to which
sales prospects are also invited, being held in London during October.
Outlook
With high quality, constantly improving products, and a more controlled sales
methodology, the Directors believe that the Group will achieve stability during
2006. I look forward to our increasing success in 2007 and a return to profit
generation.
On behalf of the Board, I would like to mention our employees who have 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
26 September 2006
Consolidated profit and loss account
for the six months ended 30 June 2006
Six Six Year
(notes) months to months to ended
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
(As restated) (As restated)
# 000 # 000 # 000
Turnover 933 930 2,137
Cost of sales (717) (770) (1,802)
Gross profit 216 160 335
Administration and establishment expenses (472) (674) (1,046)
Operating (loss)/profit before goodwill (165) (423) (530)
amortisation
Goodwill amortisation (91) (91) (181)
Operating (loss)/profit (256) (514) (711)
Interest receivable 26 34 55
(Loss)/profit on ordinary activities (230) (480) (656)
before taxation
Tax on (loss)/profit on ordinary 4 42 113 13
activities
(Loss)/profit on ordinary activities (188) (367) (643)
after taxation
Earnings per share 6 (0.82)p (1.60)p (2.81)p
Diluted earnings per share 6 (0.82)p (1.60)p (2.81)p
Consolidated balance sheet
as at 30 June 2006
As at As at As at
30 June 30 June 31 December
2006 2005 2005
(Unaudited) (Unaudited) (Audited)
(As (As restated)
restated)
# 000 # 000 # 000
Fixed assets
Tangible assets 42 56 54
Goodwill 2,701 2,882 2,792
2,743 2,938 2,846
Current assets
Debtors 569 1,226 946
Cash at bank and in hand 1,915 1,479 1,539
2,484 2,705 2,485
Creditors: amounts falling due within one (643) (627) (578)
year
Net current assets 1,841 2,078 1,907
Net assets 4,584 5,016 4,753
Capital and reserves
Called up share capital 1,145 1,145 1,145
Share premium account 1,578 1,578 1,578
Other reserves 2,538 2,538 2,538
Profit & loss account (677) (245) (508)
Shareholders' funds - equity 4,584 5,016 4,753
Summarised group cash flow statement
for the six months ended 30 June 2006
Six months to Six months to Year ended 31
30 June 2006 30 June 2005 December
2005
(Unaudited) (Unaudited) (Audited)
As restated As restated
#000 #000 #000
Cash Inflow from operating activities
Operating (loss)/profit (256) (514) (711)
Share based payment charge 18 12 25
Depreciation 12 15 23
Goodwill amortisation 91 91 181
Decrease/(increase) in debtors 419 237 516
Increase/(decrease) in creditors 76 (89) (160)
Net cash inflow/(outflow) from operating
activities 360 (248) (126)
Returns on investment 26 34 55
Taxation (11) 3 (74)
Capital expenditure - (34) (40)
Free cash flow 375 (245) (185)
Equity dividends paid - (172) (172)
Cash inflow/(outflow) before management of liquid
resources and financing 375 (417) (357)
Management of liquid resources - - -
Financing - - -
Net increase/(decrease) in cash in the period 375 (417) (357)
Notes to the interim report
1. The interim financial statements for the six months ended 30 June 2006
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 2005.
2. The Group has adopted FRS20 'share based' payments in respect of the
current accounting period. The accounts for the year-ended 31 December 2005
have been restated for the requirements of FRS20. The effect is shown in note 5
below.
3. The interim financial information for the six months ended 30 June
2006 is un-audited 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 on page 7 of this interim
report.
4. The tax credit for the period is based on the anticipated effective
tax rate for the year to 31 December 2006.
5. Share options granted are accounted for in accordance with FRS20 under
which a charge is recognised in the profit and loss account based on the fair
value of the grant, measured at grant date. The charge is spread over the
vesting period and may be subject to adjustment if the number of options or
shares actually vesting differs from that assumed at the outset. The share
options have been valued using the Black Scholes model, which takes into account
future share price volatility, future dividend yield, future risk-free interest
rate, an estimate of earnings per share and exercise behaviour. The impact of
this is to increase administrative expenses by #18,000 for the six months to 30
June 2006; #12,000 for the six months to 30 June 2005; and #25,000 for the year
to 31 December 2005.
6. Basic earnings per share are calculated on the loss on ordinary
activities after taxation of #188,000 (2005: restated loss of #367,000) and on
22,899,350 ordinary shares, being the weighted average number of ordinary shares
in issue in the period (2005: 22,899,350 ordinary shares). The diluted earnings
per share is calculated on the profit on ordinary activities after taxation of
#188,000 on 22,968,831 ordinary shares, being the weighted average number of
ordinary shares in issue in the period adjusted earnings per share for the
dilutive effect of share options outstanding.
Share options in issue in 2005 did not have a dilutive impact on the loss per
share calculation. 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
2006 2005 2005
#000 #000 #000
As restated As restated
(Loss)/profit after tax (188) (367) (643)
Adjustments
Goodwill amortisation 91 91 181
Adjusted (loss)/profits (97) (276) (462)
Adjusted earnings per share (0.42)p (1.21)p (2.02)p
This information is provided by RNS
The company news service from the London Stock Exchange
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