Embargoed for release at 7.00 am on 29 June 2006
Amteus plc
("Amteus", the "Company" or the "Group")
Interim Results for the six months ended 31 March 2006
Chairman's Statement
Amteus, the provider of secure business communications software, was admitted
to trading on AIM on 18th January 2006, raising �3.3 million net of issue
costs. The funds were raised to complete the commercial development of the
Group's products, to enhance their technical capabilities and to establish the
necessary sales, marketing and customer support operations needed to bring the
products to market.
It gives me pleasure to report the maiden interim results for the six months to
31st March 2006 and to give the Group's shareholders an update on the progress
Amteus has made since its successful flotation.
Results
Revenue in the six months to 31st March 2006 amounted to �15,559 (2005: �6,045)
and the loss before and after tax was �883,165 (2005: �1,661,842). At the
period end, cash balances were �2,253,757.
Sales
Amteus began recruiting sales and tele-sales teams in April 2006. The new sales
force, which has undertaken a rigorous programme of training and quality
control, has already built up a strong sales pipeline, which is growing on a
weekly basis.
The reaction to the Amteus product has been most encouraging and the Group
received its first orders in June, pleasingly ahead of schedule. We intend to
expand the sales team from the current headcount of nine, as sales build up
over the next few months.
Product development
Amteus is an all-in-one communications software application for easy
multi-tasking. It provides:
* Presence control;
* Secure voice ("VoIP") (including conferencing);
* Secure instant messaging;
* Secure sharing and transfer of files; and
* Secure email.
The Board believe that Amteus is the only product of its kind and offers
significant benefits to a wide variety of industries and professions. The
software, which is easily installed into the client's own private network,
provides real and measurable benefits - secure communication, improved
efficiency, increased productivity and direct cost savings, resulting in a
rapid return on investment.
Business model
The product is typically sold on a three year contract, as a bundled package of
licence, customer support and hardware.
The company offers its customers a monthly subscription payment model and, in
most cases, the customer enters into a lease arrangement with banks and lease
providers with whom we are partnering. Where customers opt for the monthly
subscription payment model, Amteus receives the three years' cash in advance,
on a non-recourse basis, and recognises the revenue evenly over the full period
of the contract.
People
Prior to flotation on AIM, the Group employed 21 staff. Amteus now employs over
40 people, the majority of new appointments being made in technical
development, sales and marketing and customer support.
As previously announced, The Rt. Hon. Michael Howard joined the Board as a Non-
Executive Director on 22nd June 2006.
Outlook
The Amteus product has been well received in the market place and the value of
initial orders has, to date, been ahead of the Board's expectations. As orders
are received, the majority are immediately converted to cash in order to
accelerate the point when the business becomes cash generative.
Michael Abrahams CBE DL
Chairman
28 June 2006
For enquiries:
Amteus plc
Michael Abrahams (Chairman)
Rawlings Financial
John Rawlings 01756 770376
Pro Forma Consolidated Profit and Loss Account
For the six months ended 31 March 2006
Notes Unaudited Unaudited Audited
6 months 6 months 16 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
� � �
Turnover 3 15,559 6,045 23,155
Cost of sales (1,426) (34,083) (75,854)
Gross profit/(loss) 14,133 (28,038) (52,699)
Operating expenses (896,780) (1,624,400) (3,004,577)
Operating loss (882,647) (1,652,438) (3,057,276)
Finance charges (518) (9,404) (34,246)
Loss on ordinary activities before (883,165) (1,661,842) (3,091,522)
taxation
Tax on loss on ordinary activities 4 - - -
Loss for the financial period (883,165) (1,661,842) (3,091,522)
Loss per share
- basic and diluted 5 (3.0p) (12.1p) (20.6p)
All the results for the period relate to continuing activities.
There are no recognised gains or losses in the period other than the loss for
the period.
Pro Forma Consolidated Balance Sheet
As at 31 March 2006
Notes Unaudited Unaudited Audited
31 March 31 March 30 September
2006 2005 2005
� � �
Fixed assets
Tangible assets 207,086 398,975 214,827
Investments - - 1
207,086 398,975 214,828
Current assets
Stock 9,680 24,202 2,760
Debtors 187,026 42,030 16,848
Cash at bank and in hand 2,253,757 4,829 41
2,450,463 71,061 19,649
Creditors - amounts falling due (842,865) (614,965) (1,218,150)
within one year
Net current assets/(liabilities) 1,607,598 (543,904) (1,198,501)
Total assets less current 1,814,684 (144,929) (983,673)
liabilities
Creditors - amounts falling due (792,229) (722,365) (508,106)
after more than one year
Net assets/(liabilities) 1,022,455 (867,294) (1,491,779)
Capital and reserves
Called up share capital 2 3,446,639 2,628,700 2,628,700
Share premium 2,579,460 - -
Profit and loss account (5,003,644) (3,495,994) (4,120,479)
Equity Shareholders' funds/(deficit) 1,022,455 (867,294) (1,491,779)
Pro Forma Consolidated Cash Flow Statement
For the six months ended 31 March 2006
Notes Unaudited Unaudited Audited
6 months 6 months 16 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
� � �
Net cash outflow from operating 6 (1,012,287) (1,591,054) (2,202,148)
activities
Return on investments and servicing (3,552) (9,404) (34,246)
of finance
Capital expenditure (net) (6,717) (44,649) 1,102
Management of liquid resources (2,200,000) - -
Cash outflow before financing (3,222,556) (1,645,107) (2,235,292)
Financing 3,341,854 1,782,971 2,169,635
Increase/(decrease) in cash in the 119,298 137,864 (65,657)
period
Pro Forma Reconciliation of net cashflow to movement in net funds/(debt)
For the six months ended 31 March 2006
Unaudited Unaudited Audited
6 months 6 months 16 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
� � �
Increase/(decrease) in cash in the 119,298 137,864 (65,657)
period
Purchase of deposits 2,200,000 - -
Cash inflow from debt and lease 69,834 42,868 199,286
financing
Change in net funds resulting from 2,389,132 180,732 133,629
cash flows
New finance leases in the period (26,136) (194,020) (309,400)
Movement in net funds/(debt) in the 2,362,996 (13,288) (175,771)
period
Opening net (debt)/funds (175,655) (256,411) 116
Closing net funds/(debt) 2,187,341 (269,699) (175,655)
Pro Forma Reconciliation of Equity Shareholders' funds/(deficit)
For the six months ended 31 March 20006
Note Unaudited Unaudited Audited
6 months 6 months 16 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
� � �
New shares issued (net of issue 2 3,397,399 2,627,700 2,627,700
costs)
Loss for the financial period (883,165) (1,661,842) (3,091,522)
Opening equity shareholders' deficit (1,491,779) (1,833,152) (1,027,957)
Closing equity shareholders' funds/ 1,022,455 (867,294) (1,491,779)
(deficit)
NOTES TO THE INTERIM REPORT
For the six months ended 31 March 2006
1. BASIS OF PREPARATION
The interim results for the six months ended 31 March 2006, which are
unaudited, have been prepared in accordance with the accounting policies
adopted by Amteus Secure Communications Limited for the period ended 30
September 2005.
The financial information for the sixteen month period ended 30 September 2005
is an abridged version of Amteus Secure Communication Limited's published
statutory financial statements which received an unqualified auditors' report,
contained no statement under section 237(2) or (3) of the Companies Act 1985
and which have been filed with the Registrar of Companies.
2. CORPORATE RESTRUCTURING
During the period, the group carried out a corporate restructuring involving
the introduction of a new holding company, Amteus plc (formerly known as Amteus
Limited) which was incorporated on 4 November 2005. Amteus plc acquired the
entire share capital of Amteus Secure Communications Limited on 18 November
2005 in a share for share exchange.
At 31 March 2005 and 30 September 2005 Amteus Secure Communications Limited had
called up share capital of �2,628,700. On 18 November 2005 related party loans
amounting to �90,667 were converted to share capital following the issue of a
further 90,667 ordinary shares with a nominal value of �1.
On 18 November 2005 Amteus plc acquired the entire issued share capital of
Amteus Secure Communications Limited, a company under the common control of J C
Morris, in consideration for the Amteus Secure Communications Limited
shareholders receiving 2,719,367 ordinary shares in the company.
On 18 January 2006 7,272,717 shares were issued, by Amteus plc for a nominal
value of �727,272, as part of the flotation of the Company on the AIM market of
the London Stock Exchange. The issue of these shares resulted in the share
premium balance of �2,579,460, net of issue costs, being recorded.
The acquisition of Amteus Secure Communications Limited by Amteus plc has been
accounted for using merger accounting principles in accordance with UK GAAP.
Accordingly, the profit and loss account, the balance sheet and the
reconciliation of equity shareholders' funds are presented on a pro forma basis
as if the new holding company has been in existence throughout the current six
months period from 1 October 2005 to 31 March 2006 and the prior period from 1
October 2004 to 31 March 2005.
3. SEGMENT INFORMATION
Analysis between activities is not presented as the group's operations comprise
a single class of business, which is the development and supply of
communication software to business. The group's operations are located in Great
Britain.
4. TAX ON LOSS ON ORDINARY ACTIVITIES
There is no tax charge for the period.
5. LOSS PER SHARE
Loss per share is calculated by dividing the loss after taxation by the
weighted average number of ordinary shares in issue of 29,871,627 (31 March
2005: 13,776,322 shares and 30 September 2005: 15,003,123 shares). The weighted
average number of ordinary shares reflect the share split on 21 November 2005,
whereby each of the issued and unissued ordinary shares of �1 each were divided
into 10 ordinary shares of 10 pence each.
6. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
aCTIVITIES
Unaudited Unaudited Audited
6 months 6 months 16 months
ended ended ended
31 March 31 March 30 September
2006 2005 2005
� � �
Operating loss (882,647) (1,652,438) (3,057,276)
Depreciation charge 38,986 52,625 120,896
Loss/(profit) on sale of tangible fixed 1,608 (483) 12,720
assets
(Increase)/decrease in stocks (6,920) (1,534) 14,506
(Increase)/decrease in debtors (139,503) (4,609) 41,286
(Decrease)/increase in creditors (23,811) 15,385 665,720
Net cash outflow from operating (1,012,287) (1,591,054) (2,202,148)
activities
7. DIVIDENDS
No dividends are proposed for the six months ended 31 March 2006.
8. DISTRIBUTION OF INTERIM REPORT TO SHAREHOLDERS
The interim report will be posted to all shareholders of the company, and will
be available for inspection by the public at the registered office of the
company during normal business hours on any weekday. Further copies are
available on request.
END
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