RNS Number:8155B
TripleArc PLC
30 September 2002
Embargoed until 1005 30 September 2002
TripleArc Plc
Interim Results for the 6 months ended 30 June 2002
Interim results from TripleArc Plc, the UK based provider
of web based print procurement solutions.
HIGHLIGHTS
- Acquisition of ControlP for #250,000
- #2.6m revenue (nil)
- Gross profit of #350,000 (nil)
- Pre-tax loss of #1.26m (#0.56m) before goodwill and
share option expenses
- Sales to improve by year end and accelerate in 2003
Commenting on the results, Conor O'Brien, Chief Executive
Officer stated:
"Reflecting general economic conditions, the industry has
faced tough times and the take up of e-procurement
solutions has been slower than we expected. In this
environment, opportunities to consolidate within the
sector are presenting themselves and the purchase of
ControlP is an excellent fit for the business.
"Despite the delays during the first half in confirming
contracts, we expect revenue to improve in the second
half and accelerate in 2003 as the printing industry
adopts the technology solutions offered by the Group."
For further information please contact:
TripleArc Plc 020 7258 6290
Conor O'Brien, Chief Executive Officer
Weber Shandwick Fleet Financial 020 7950 2800
Terry Garrett/ Nick Dibden
TripleArc Plc
6 month Results ended 30 June 2002
The Board of TripleArc Plc, the UK based provider of web
based print procurement solutions, announces its interim
results for the 6 month period ended 30 June 2002.
Financial Review
Revenue for the six months to 30 June 2002 was #2.6m
(2001 #nil), representing a significant milestone as the
Group moves from being a development oriented company to
building an expanding revenue stream.
Gross profit of #0.35m (2000 #nil) was mainly
attributable to gl2, the Group's print management
division.
Research and development costs were #0.45m in the first
half of 2002 compared to #0.38m in the prior period. The
increase reflects the Group's investment in technology to
develop the Collaborative Workflow System (CWS).
Development spend is expected to decline in the second
half of the year.
The acquisition of gl2 in October 2001 and the
restructuring of TripleArc from a limited company to a
quoted group in December 2001 have had a significant
effect on the comparison of certain elements of the
profit and loss account, including the non-cash share
option compensation charge, amortisation of goodwill and
administrative expenses. These items are described
below.
Administrative expenses (2002: #0.8m, 2001: #0.2m) and
selling and distribution costs (2002: #0.36m, 2001:
#0.004m) in the first half of 2002 are significantly
higher than the comparative base in the first half of
2001 when TripleArc was solely a technology company,
almost exclusively focused on product development.
Development of TripleArc's infrastructure led to the
recruitment of additional staff including a sales and
marketing team for the technology division. In addition,
the 2002 figures include gl2, the Group's print
management division.
Amortisation of goodwill on the gl2 acquisition was
#0.13m (2001:nil). A non-cash share option compensation
expense of #0.5m was charged in the first half of 2002
(2001:nil). This arose on share options granted prior to
TripleArc's listing on AIM where the exercise price of
the option was below the prevailing market price at the
date of grant. All options granted since TripleArc's AIM
listing have been issued at market price.
The operating loss, before amortisation of goodwill and
share option compensation expense, was #1.26m (2001:
#0.6m). After charging non-cash share option
compensation of #0.5m and goodwill amortisation of
#0.13m, the loss before tax was #1.9m (2001: #0.6m).
The loss per ordinary share was 2.93 pence in the six
months ending 30 June 2002 (2001: 1.49 pence)
The acquisition of the business of ControlP on 28
September 2002 has no effect on the results reported in
this statement.
Operational Review
Market
As expected, the printing industry has demonstrated
significant interest in e-procurement solutions as a way
of streamlining its activities, cutting costs and
enhancing efficiency. The adoption of Internet based
solutions is widely accepted as a natural progression in
improving the ordering and production process between
customers and printers.
However, the current economic climate, has inevitably led
to a slower adoption of the technology than had
originally been anticipated. TripleArc has taken
advantage of consolidation within the sector by acquiring
the business of ControlP, a provider of print e-
procurement solutions. ControlP was previously a
division of Documedia Solutions Plc. The ControlP
acquisition strengthens TripleArc's position as a leading
provider of e-commerce procurement solutions for the
printing industry.
The Group has generated a substantial number of enquiries
and entered into encouraging discussions with pipeline
customers. However potential customers are taking longer
to commit to implementation and the sales process is
slower than expected, particularly with larger print
buyers.
Nevertheless, TripleArc technology, which is positioned
as a 'solution sell' to address the numerous difficulties
and inefficiencies within the print procurement process,
is a leader in its field and therefore the Board expects
sales to accelerate as confidence returns to the sector
during the course of 2003.
Print Procurement Solutions
Following TripleArc's acquisition of ControlP, its
approach to providing an end-to-end online procurement
solution for the print industry consists of a portfolio
of advanced web-based print procurement solutions.
Placed at the leading edge of print procurement
technology, the Board believes the Group's solutions have
the potential to become the market leading systems for
print procurement. TripleArc's Collaborative Workflow
system (CWS) is the only fully Job Definition Format
("JDF") compliant print procurement solution in an
industry that is rapidly moving to adopt the format.
JDF is a data exchange standard that acts as an
electronic "job ticket", allowing the integration of
manufacturing products from diverse vendors into seamless
workflow solutions. This enables every part of the
procurement and manufacturing process, including
customers, designers as well as printers, to communicate
more effectively throughout the complete life cycle of a
print job.
Printing World commented this month that, "The success of
JDF, Job Definition Format,...is assured". As TripleArc
is a front runner in JDF adoption, the CWS solution has a
strong competitive advantage in the market.
The CWS has now been implemented into a number of major
printers and print management companies. A number of
trials are also in the course of negotiation with large
corporate customers. Revenue generation has been minimal
to date in line with the application service provider
(ASP) business model adopted. Revenue generation is
expected to increase in the last quarter of the year.
Print Management Services
The first half of the year has been a difficult period
for gl2, the Group's print management business, as a
result of the downturn in the marketing services sector,
in which many of its clients focus. gl2's performance
has improved since June and the second half of 2002 is
anticipated to produce better results. gl2's increased
use of the CWS is expected to have a positive impact on
performance, improving its proposition to market,
reducing costs and increasing capacity.
The acquisition of gl2 last October has made a
significant contribution to the Group. gl2's knowledge
and expertise of the print industry has been reflected in
the quality of the TripleArc technology solutions. The
roll out of TripleArc's CWS to gl2's principal suppliers
presents additional sales opportunities for TripleArc's
technology division.
Equally, the benefits of including TripleArc's
procurement solutions as part of the print management
offering of gl2 are bearing fruit. gl2 has gained new
clients such as DFS, The Laurel Pub Company, and LIDA, a
division of M & C Saatchi, for the production of high
volume marketing materials for a major retailer.
A new managing director, Neil Watson, has been appointed
to head gl2. Neil was previously the managing director of
the Carlton Barclay Group and brings extensive experience
in leading growing companies and winning new accounts to
the gl2 management team.
Outlook
TripleArc's solutions are well placed at the leading edge
of technology for the print industry and the Directors
believe that sales will accelerate over the coming twelve
months as the adoption of e-commerce solutions gathers
momentum within the sector.
Despite the delays in confirming contracts in the first
half period, sales are anticipated to improve in the
closing months of the year and accelerate in 2003.
The Board has reviewed the Group's current financial
resources and is comfortable that sufficient cash and
cash facilities are available to fund the Group's current
activities into the second half of 2003.
The Directors view the future with confidence. The gl2
proposition has been enhanced by the added value services
offered through the use of TripleArc's products.
TripleArc's acquisition of ControlP ensures the Group's
position as one of the top providers of e-procurement
solutions in the printing industry.
Consolidated profit and loss account
six months ended six months ended
30 June 30 June
2002 2001
(unaudited) (unaudited)
# #
Revenue 2,587,439 -
Cost of sales (2,239,762) -
___________ ___________
Gross profit 347,677 -
Research and development (452,812) (375,165)
Selling and distribution costs (361,012) (3,778)
Administrative expenses (797,372) (178,822)
___________ ___________
Loss before amortisation of goodwill
and share option compensation expense (1,263,519) (557,765)
Amortisation of acquired goodwill (127,860) -
Non cash share option compensation expense (543,426) -
___________ ___________
Loss on ordinary activities before interest
and taxation (1,934,805) (557,765)
Interest receivable 32,660 -
Interest payable and similar charges (6,489) (538)
___________ ___________
Loss on ordinary activities before taxation (1,908,634) (558,303)
Tax on loss on ordinary activities - -
___________ ___________
Loss for the financial period (1,908,634) (558,303)
=========== ===========
Loss per ordinary share 1 (2.93p) (1.49p)
Consolidated balance sheet
six months ended six months ended year ended
30 June 30 June 31 December
2002 2001 2001
(unaudited) (unaudited) (audited)
Fixed Assets
Intangible Assets 3,641,906 - 3,769,767
Tangible Assets 135,799 36,288 104,174
___________ ___________ __________
Fixed Assets 3,777,705 36,288 3,873,941
Current Assets
Stocks 22,803 - 27,680
Debtors 1,414,134 25,690 1,451,664
Cash 1,410,749 67,475 2,901,154
___________ ___________ __________
2,847,686 93,165 4,380,498
Creditors: amounts falling due
within one year (2,002,555) (643,137) (2,273,735)
___________ ___________ __________
Net Current Assets 845,131 (549,972) 2,106,763
___________ ___________ __________
Total Assets less Current liabilities 4,622,836 (513,684) 5,980,704
Creditors: amounts falling due
after more than one year (21,675) (3,309) (15,312)
___________ ___________ __________
Total net assets/(liabilities) 4,601,161 (516,993) 5,965,392
=========== =========== ==========
Capital and reserves
Called up share capital 3,259,580 - 3,259,579
Share Premium Account 5,449,166 - 5,448,190
Share capital and share premium
of previous entity - 656,260 -
Stock Option Reserve 794,756 - 251,330
Merger Reserve (621,490) - (621,490)
Group interest in shares of
TripleArc Plc (150,000) - (150,000)
Profit and loss account (4,130,851) (1,173,253) (2,222,217)
___________ ___________ __________
Equity Shareholders Funds 4,601,161 (516,993) 5,965,392
=========== =========== ==========
Consolidated cash flow statement
six months ended six months ended
30 June 30 June
2002 2001
(unaudited) (unaudited)
# #
Net cash outflow from operating activities 2 (1,337,310) (443,198)
Returns on investments and servicing of finance
Interest received 32,660 -
Interest paid (5,350) -
Interest element of finance lease payments (1,739) (538)
___________ ___________
Net cash inflow/(outflow) from returns on
investments and servicing of finance 25,571 (538)
Corporation tax paid - -
Capital expenditure and financial investment
Purchase of tangible fixed assets (50,008) (12,452)
___________ ___________
Net cash outflow for capital expenditure (50,008) (12,452)
Net cash outflow before use of liquid
resources and financing (1,361,747) (456,188)
Financing
Proceeds from issue of share capital - 79,684
Proceeds from Issue of 10% Convertible Loan Stock - 345,583
Expenses paid in connection with share issue (104,006) -
Capital element of finance lease payments (4,652) (563)
Debentures repaid (20,000) -
___________ ___________
Net cash (outflow)/inflow from financing (128,658) 424,704
___________ ___________
Decrease in cash 3,4 (1,490,405) (31,484)
=========== ===========
Note 1: Loss per ordinary share
six months six months year ended
ended ended 31 December
30 June 30 June
2002 2001 2001
Basic
Loss attributable to ordinary
shareholders #1,908,634 #558,303 #1,607,267
========== ========== ==========
Weighted average number of
ordinary shares outstanding 65,191,572 37,376,635 42,307,700
========== ========== ==========
Basic loss per share (in pence) (2.93p) (1.49p) (3.80p)
========== ========== ==========
Basic loss per share is calculated by dividing the
weighted average number of ordinary shares in issue into
the loss after taxation for the period attributable to
ordinary shareholders. There is no difference for 2001
and 2002 between the basic net loss per share and the
diluted net loss per share as all potentially dilutive
ordinary shares outstanding have been excluded from the
computation as their effects are anti-dilutive.
Note 2: Reconciliation of operating loss to net cash
outflow from operating activities
2002 2001
# #
Operating loss (1,934,805) (557,765)
Depreciation 32,421 4,000
Amortisation of goodwill 127,860 -
Amortisation of stock compensation 543,426 -
Decrease in stocks 4,877 -
Decrease/(increase) in debtors 37,530 (14,193)
(Decrease)/increase in creditors (148,619) 124,760
___________ ___________
(1,337,310) (443,198)
=========== ===========
Note 3: Analysis of changes in net funds
At 31 Dec Non cash At 30 June
2001 flow cashflow 2002
# # # #
Cash at bank and on hand 2,901,154 - (1,490,405) 1,410,749
Bank loans (100,000) - - (100,000)
Debenture loan (50,000) - 20,000 (30,000)
Finance Leases (23,101) (14,037) 4,652 (32,486)
_________ _________ ___________ __________
Total 2,728,053 (14,037) (1,465,753) 1,248,263
========= ========= =========== ==========
Note 4: Reconciliation of net cash movements to net funds
six months six months
ended ended
30 June 30 June
2002 2001
# #
Decrease in cash in the period (1,490,405) (31,484)
Decrease / (Increase) in debt 20,000 (345,583)
Capital payments on finance leases 4,652 563
___________ ___________
Decrease in net funds resulting from cashflows (1,465,753) (376,504)
Increase in net debt arising from additional
finance leases (14,037) (5,406)
___________ ___________
Movement in the net funds in the period (1,479,790) (381,910)
Net funds at the beginning of the period 2,728,053 98,959
___________ ___________
Net funds/(debt) at end of period 1,248,263 (282,951)
=========== ===========
Note 5: Publication of non-statutory accounts.
The financial information set out in this preliminary
results announcement does not constitute statutory
accounts as defined in Section 240 of the Companies Act
1985. The financial information for the year ended 31
December 2001 is extracted from the statutory accounts
for that year. Those accounts upon which the auditor's
report was unqualified have been delivered to the
Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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