RNS Number:7665T
Atlantic Global PLC
27 March 2007
Press Release 27 March 2007
Atlantic Global Plc
Preliminary Results
Atlantic Global Plc ("Atlantic Global" or "the Company"), the specialist
provider of Project Portfolio Management (PPM) software applications, today
announces its Preliminary Results for the 12 months ended 31 December 2006.
Financial and Operational Summary
* Successful return to operating profit before goodwill amortisation in the second half of 2006
* Strong financial position, generating a positive free cash flow of #61,000
* Loss before tax and goodwill amortisation reduced to #51,000 (2005: Loss #475,000), in line with
expectations
* Turnover comparable year on year at #1.961m (2005: #2.137m)
* Earnings per share, adjusted for goodwill, increased to 0.23 pence (2005: restated loss per share of
1.98 pence)
* Further operational efficiencies achieved during the second half of 2006
* Contract implementation continued, supported by a strong sales infrastructure geared toward a
maturing Project Portfolio Management (PPM) marketplace
* Uplift in both retained and new clients, mostly notably Provident Financial, Kingston Communications,
GroupM, Tiscali and Aircom International
* Stronger position on the Gartner PPM Magic Quadrant
* Recent expansion of the team who will support the planned growth of the business during 2007
* Initial months of 2007 traded in line with management expectations
Eugene Blaine, Managing Director of Atlantic Global commented:
"We believe that the Company is in a much stronger position to take advantage of
the expected growth in the Portfolio Project Management market place. As a
result, the Group is confident that top line growth will improve in 2007, with
the aim of delivering increased shareholder value."
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
Justin Heath/Helen Waggott Tel: +44 (0) 20 7398 7700
Emma Johnson
justin.heath@abchurch-group.com www.abchurch-group.com
Chairman's Statement
Introduction
Atlantic Global has worked its way through a difficult trading period and is
pleased to report a return to operating profit before goodwill amortisation in
the second half of 2006 (second half operating profit before goodwill
amortisation #52,000, first half loss before goodwill amortisation #165,000).
The Company continued to develop all aspects of the business during 2006. In
particular, the Group focussed on continuing the task of building an appropriate
sales infrastructure geared toward a maturing Project Portfolio Management (PPM)
marketplace. We are pleased to announce that we have gained new PPM software
customers including Provident Financial, Kingston Communications, GroupM,
Tiscali and Aircom International.
Results
The Group reduced its losses during 2006 with an operating loss before interest
and goodwill, of
#113,000 (2005: restated loss #530,000). The turnover of the Group for 2006 was
comparable to the previous year at #1,961,000 (2005: #2,137,000). The total
expenditure on the Sales and Marketing functions during 2006 reduced to
#1,015,000, (2005: #1,550,000).
Earnings per share, adjusted for goodwill, was 0.23 pence (2005: restated loss
per share of 1.98 pence).
Whilst ensuring that we continue to invest and build our Company and products,
the Company returned to being cash generative during 2006. The Group had net
cash balances, as at 31 December 2006, of #1,600,000 compared with #1,539,000
the year before, showing an increase of #61,000.
The Group remains in a strong financial position, with cash in the bank and
generating a positive free cash flow.
Dividend
The Directors are not proposing a dividend for the year ended 31 December 2006,
(2005: nil).
When circumstances become appropriate the Directors will revert to their
progressive dividend policy.
People
The Company would like to recognise and pay tribute to the employees for their
hard work and professionalism during a difficult period in the Company's
history. I am pleased to report that we have resumed the recruitment of
additional people to key areas who will support the planned growth of the
business during 2007.
Strategy for the future
The fundamental strategy of the Group remains unchanged.
Our objective during 2006 was to achieve stability and to bring the Company back
to profitability. Our objective for 2007 is to achieve consistent profitable
trading, and generate moderate growth sustained by a maturing PPM marketplace
where Atlantic Global has become established as an industry leader.
We will continue to investigate other complementary channels to market.
Acquisitions
The Group is not involved in an active acquisition strategy. However the Company
is aware that there has been considerable acquisition activity in this software
sector, and would, therefore, consider opportunities that would improve
shareholder value, providing they are compatible with our strategic objectives
and also reasonably priced in accordance with their profitability and quality of
earnings.
Current Trading
The year has begun in line with our expectations, continuing the strong finish
to 2006. Recent improvements to our sales and implementation methodology will
enable the Group to continue reviewing its performance and application to the
constantly changing demands of the market.
With high quality, constantly improving products, and a more enhanced sales
methodology and management, the Directors believe that the Group is well placed
to achieve further growth during 2007.
Annual General Meeting
The AGM will be held on Tuesday 1 May 2007 at 2.30pm at the Company's Head
Office at Woodland Park, Bradford Road, Chain Bar, Cleckheaton, West Yorkshire,
BD19 6BW.
Following the formalities of the meeting we will, as in previous years, allocate
time in which shareholders can meet the Directors and discuss the progress of
the Group. I would extend the Board's invitation to all shareholders in the hope
that as many as possible attend.
Steve Allen
Chairman
27 March 2007
Managing Director's Review
Introduction
Our primary objective during 2006 was to re-establish stability following 2005
where the Company recorded a loss. It is therefore pleasing that we have
achieved this objective and produced a profit before goodwill amortisation in
the second half of the year.
The Group is also pleased to announce new Corporate Vision implementations
within XChanging, AIRCOM International, Provident Financial, Teleca, GroupM and
Kingston Communications.
Throughout the year we continued our investment programme in order to establish
Atlantic Global as a leading player in the maturing Portfolio Project Management
(PPM) market sector.
Further operational efficiencies have been achieved over the past 12 months,
particularly during the second half of 2006. The Group will benefit from these
improvements during 2007 and beyond.
Product Development
Corporate Vision Version 12 was released at the end of January 2007 where we
focussed on making PPM easier to use and understand and quicker to implement.
A newly formed Product Focus team supports the Group's continuous improvement
programme where industry leading organisations are invited to give us feedback
and to provide valuable guidance as to the future strategic direction of the
product.
Approximately 50% of our research and development effort during 2006 has been
focussed on building the next generation of our product range. The first release
of this product is scheduled for September 2007.
Sales & Marketing
Atlantic Global has built up a significant marketing database of contacts
interested in our solutions. However, it has become apparent that, as with any
emerging market, translating this interest in to revenue represents a challenge
to all vendors operating in this space.
The new sales process, supporting systems and new sales management are helping
us to focus on translating the wide interest in PPM solutions into sales
revenue. Our focus on the most proactive sales leads is expected to result in a
stronger and more stable sales trend for 2007.
Relationships have been maintained with the software analysts, including
Gartner, where we improved our positioning on the Gartner PPM Magic Quadrant.
Customer profile
The Group's products continue to sell in a variety of industry sectors.
Listed below are some of Atlantic's customers:
Pharmaceuticals Computer & Telecoms Financial & Consulting Other
AstraZeneca Limited Computacenter UK Limited Man Group Plc Metropolitan Police Service
GlaxoSmithKline Plc Hitachi Europe Ltd Friends Provident NEC Technologies (UK) Ltd
GlaxoSmithKline US Pharma Identex Allied Irish Bank Parkside NHS Trust
Sanofi Aventis Ltd Intel Ireland Ltd Barclays Bank Plc Scott Tallon Walker Architects
Interoute Limited CNA Waltham Forest Council
Virgin Mobile Telecom Ltd LogicaCMG British Car Auctions
Xchanging Ltd Dunnhumby Microgen
Echostar Int Corp HSBC Actuaries & Northgate Information Solutions
Consultants
NTL Telewest Crown Agents
Ltd
Orange SA Partners
Raft International Plc
Kingston Communication Genesis Oil & Gas
Serco Technology
Aircom International Harvey Nash
Provident Financial
Tiscali Hemsley Fraser
Aviva Group
Torrent Trackside
Group M
Our close working relationship with our customers continues and, as we develop,
we see our customers, both old and new, responding to our improved abilities
which we expect to continue.
People
As mentioned in the Chairman's statement, I would also like to take this
opportunity to recognise and pay tribute to the employees for their hard work,
patience and professionalism. There is clear evidence that their efforts are
beginning to produce returns and I am pleased to report that we have resumed the
recruitment of additional people to key areas to support the planned growth of
the business during 2007.
Outlook
We believe that the Company is in a much stronger position to take advantage of
the expected growth in the Portfolio Project Management market place. As a
result, the Group is confident that top line growth will improve in 2007, with
the aim of delivering increased shareholder value.
Eugene Blaine
Managing Director
27 March 2007
Consolidated Profit and Loss Account
for the year ended 31 December 2006
Year ended Year ended
31 December 31 December
Restated
2006 2005
Note #000 #000
Turnover 1,961 2,137
Cost of sales (1,304) (1,802)
Gross profit 657 335
Administration and establishment expenses (951) (1,046)
Operating loss before goodwill (113) (530)
amortisation
Goodwill amortisation (181) (181)
Operating loss (294) (711)
Interest receivable 62 55
Loss on ordinary activities before (232) (656)
taxation
Tax on loss on ordinary activities 103 21
Loss on ordinary activities after taxation (129) (635)
Basic loss per share 3 (0.56)p (2.77)p
Fully Diluted loss per share 3 (0.56)p (2.60)p
There are no recognised gains or losses during the current year other than the
loss for the year.
The Group's results for both the current and preceding years derive from
continuing operations.
Consolidated Balance Sheet
at 31 December 2006
Note 2006
2005
Restated
#000 #000 #000 #000
Fixed assets
Intangible assets 2,611 2,792
Tangible assets 31 54
2,642 2,846
Current assets
Debtors 929 960
Cash at bank and in hand 1,600 1,539
2,529 2,499
Creditors: amounts falling due within one (515) (578)
year
Net current assets 2,014 1,921
Net assets 4,656 4,767
Capital and reserves
Called up share capital 1,145 1,145
Share premium account 1,578 1,578
Merger reserve 2,538 2,538
Profit and loss account (605) (494)
Equity shareholders' funds 4,656 4,767
These accounts were approved by the Board of Directors on 27 March 2007 and were
signed on its behalf by:
EA Blaine RG Hutton
Managing Director Finance Director and Company Secretary
Consolidated Cash Flow Statement
for year ended 31 December 2006
Year ended Year ended
Notes 31 December 31 December
restated
2006 2005
#000 #000
Reconciliation of Operating loss to cash outflow
from operating activities
Operating loss (294) (711)
Depreciation 26 23
Goodwill amortisation 181 181
Decrease in debtors 134 516
Decrease in creditors (63) (160)
Share option charge 18 25
Net cash inflow/ (outflow) from operating 2 (126)
activities
Cash flow statement
Net cash inflow/ (outflow) from operating 2 (126)
activities
Returns on investment 62 55
Taxation - (74)
Capital expenditure (3) (40)
Free cashflow 4 61 (185)
Equity dividends paid - (172)
Increase/(decrease) in cash in the year 61 (357)
Reconciliation of net cash flow to movement in net
funds
Movement in net funds in the year 61 (357)
Net funds at the start of the year 1,539 1,896
Net funds at the end of the year 1,600 1,539
Notes to the accounts forming part of the financial statements
1. Accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the financial statements,
except as noted below:
In these financial statements the following new standards have been adopted for
the first time:
* FRS 20 'Share based payments';
The accounting policy under this standard is set out below together with an
indication of the effects of its adoption.
The corresponding amounts in these financial statements are restated in
accordance with the new policy.
Basis of preparation
The accounts have been prepared in accordance with applicable accounting
standards and under the historical cost accounting rules.
Basis of consolidation
The consolidated accounts include the accounts of the Company and its subsidiary
undertakings made up to 31 December 2006. The acquisition method of accounting
has been adopted. Under this method, the results of subsidiary undertakings
acquired or disposed of in the year are included in the consolidated Profit and
Loss Account from the date of acquisition or up to the date of disposal.
Under Section 230(4) of the Companies Act 1985 the Company is exempt from the
requirement to present its own Profit and Loss Account.
Goodwill
Purchased goodwill represents the excess fair value attributed to investments in
businesses or subsidiary undertakings over the fair value of the underlying net
assets at the date of their acquisition.
The Directors are of the opinion that the goodwill on businesses capitalised has
a long economic life, as it is an inseparable part of the value of the
businesses acquired and is linked to the products and services that the
businesses provide. Our in-house Research and Development team continually
improves the products, with all development expenditure written off as incurred.
This, in the opinion of the Directors, maintains the economic life of the
products and hence the goodwill.
The Directors do however recognise that it is prudent to amortise goodwill over
a defined period and in the light of the above have decided to write off
goodwill on a straight-line basis over 20 years.
The remaining useful economic life of capitalised goodwill will be reviewed
annually for impairment and adjusted if required.
Revenue recognition
Revenue from the sale of software licences is recognised only when the software
is installed. Revenue from chargeable services including consultancy,
customisation and development is recognised as these services are delivered.
Support income is recognised over the life of each support contract.
Tangible fixed assets and depreciation
Depreciation is provided to write off the cost less the estimated residual value
of tangible fixed assets by equal instalments over their estimated useful
economic lives as follows:
Computer equipment 33.3% per annum
Office furniture 20.0% per annum
Leasehold improvements 33.3% per annum
Post-retirement benefits
The Group operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the Group in an independently
administered fund. The amount charged against profits represents the
contributions payable to the scheme in respect of the accounting period.
Research and development expenditure
Expenditure on Research and Development is written off to the Profit and Loss
Account in the period in which it is incurred.
Taxation
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Deferred tax is recognised,
without discounting, in respect of all timing differences between the treatment
of certain items for taxation and accounting purposes which have arisen but not
reversed by the balance sheet date, except as otherwise required by Financial
Reporting Standard 19.
Cash and liquid resources
Cash, for the purpose of the Cash Flow Statement, comprises cash in hand and
deposits repayable on demand, less overdrafts payable on demand.
Liquid resources are current asset investments which are disposable without
curtailing or disrupting the business and are either readily convertible into
known amounts of cash at or close to their carrying values or traded in an
active market. Liquid resources comprise term deposits of less than one year
(other than cash) and investments in money market managed funds.
Leases
Operating lease rentals are charged to the profit and loss account on a
straight-line basis over the period of the lease.
Share based payments
The Group has adopted FRS 20 share based payments in respect of the current
accounting period. The financial statements reflect the fair value of providing
employee share options and the corresponding increase in shareholders' equity.
Prior years results have been adjusted to reflect this charge. The effect is
shown in Note 25.
The share option programme allows employees to acquire shares of the Company.
The fair value of options granted after 7 November 2002 and those not yet vested
as at 31 December 2006 is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and spread over the
period during which the employees become unconditionally entitled to the
options. The fair value of the options granted is measured using the Black
Scholes pricing model, taking into account the terms and conditions upon which
the options were granted. The amount recognised as an expense is adjusted to
reflect the actual number of share options that vest except where variations are
due only to share prices not achieving the threshold for vesting.
2. Dividends
Year ended Year ended
31 December 31 December
2006 2005
#000 #000
On ordinary shares of 5p
Final dividends paid in respect of prior year but
not recognised as liabilities in that year: 0.75 p
(2005: 0.75p) - 172
3. Earnings per share
Year ended Year ended 31
31 December
December Restated
2006 2005
#000 #000
Loss on ordinary activities after taxation (129) (635)
Adjustments
Goodwill amortisation 181 181
Adjusted profit/(loss) on ordinary activities after 52 (454)
taxation
Number Number
000 000
Weighted average number of shares in issue 22,899 22,899
Dilutive effect of share options - 1,507
Fully diluted weighted average number of shares in issue 22,899 24,406
Restated
Basic loss per share (based on loss after tax) (0.56)p (2.77)p
Fully diluted loss per share (based on loss after tax) (0.56)p (2.60)p
Adjusted earnings/(loss) per share (based on adjusted profit 0.23p (1.98)p
/(loss))
The adjusted earnings per share has been calculated due to the material effect
of goodwill charged in the financial statements.
Share options in issue do not have a dilutive impact on the loss per share
calculations.
4. Free cashflow
Free cash flow represents the amount of cash generated and useable to the
advantage of the Company's shareholders either in the form of return to
shareholders or for acquisitions that will enhance the company's net worth.
5. Copies of Atlantic Global Report and Accounts
Further copies of the interim and annual reports of the Company are available
from:
Mr R Hutton, Finance Director & Company Secretary, Atlantic Global Plc, Maple House,
Woodland Park, Bradford Road, Chain Bar, Cleckheaton, West Yorkshire, BD19 6BW
Website address: www.atlantic-global.com
Email: info@atlantic-global.com
--------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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