Vocalis Group PLC - Final Results
June 02 1998 - 2:30AM
UK Regulatory
RNS No 2851r
VOCALIS GROUP PLC
2nd June 1998
VOCALIS GROUP PLC ("Vocalis" or the "Group")
RECORD PRELIMINARY RESULTS
FOR THE YEAR ENDED 31st MARCH 1998
Vocalis, the speech recognition and telephony solutions
company, announces today its preliminary results for the year
ended 31st March 1998.
Highlights of the results include: Growth
* Increase in turnover to #6.2m (1997: #2.0m) 211%
* Turnover per employee up to #93,000 (1997: #44,000) 111%
* Profit before tax of #72,000 (1997: loss of #1.9m)
* Earnings per share of 0.10p (1996: loss of 6.10p)
* Cash balance of #2.8m
Commenting on the results and future prospects, Charles Halle,
Chief Executive of Vocalis said:
"We will continue to increase our value to shareholders
through our efforts to grow revenues while being aggressive on
costs. Next year and into the future we will capitalise on the
current growth, maintain our position as a technology leader,
and look forward to continued success."
For further information:
Charles Halle Tom Moriarty
Vocalis Group plc Tavistock Communications Limited
Tel: 01223 846177 Tel: 0171 600 2288
Notes to Editors
* Results: a threefold increase in turnover for Vocalis
Group plc to #6.2m and the first year of profitability.
The company made a pre tax profit of #72,000 compared to
a loss of #1.9m last year.
* Company background: Vocalis was formed in May 1993, via
a management buyout from Logica plc, and floated on the
London Stock Exchange in July 1996. Vocalis is the only
British speech recognition solutions company, servicing
an international client base from its Cambridge
headquarters. Vocalis develops, manufactures and
delivers telephony solutions for corporate call centres
and public network operators, using its proprietary
speech recognition technology, SpeechWare T.
* New CEO: Charles Halle joined Vocalis in February from
IBM, where he was instrumental in founding and achieving
the rapid success of the "e-business" solutions unit.
* Key product: The majority of revenue came from the
Speechtel. range of products. Speechtel comprises a
multi application platform capable of hosting a wide
variety of voice solutions for fixed wire and mobile
operators. The geographical spread of customers - Europe,
Asia and the Americas - demonstrates the global appeal of
applications such as automated directory enquiries and
reverse charge calling.
* Markets: The market for speech recognition based
telephony applications and services is growing around the
world. Telephone network operators continue to seek
innovative ways of reducing costs and increasing revenues
from enhanced services and this will fuel growth. Vocalis
is recognised as having world class products coupled with
proven capability to deploy these on its own platforms.
* Partners: the collaboration with Ericsson continues to
grow, with contract successes and joint development
projects. The Group continues to work with Logica plc
and Computer Sciences Corporation, and recently announced
a partnership with royalblue plc.
* Research and Development: the year saw the release of a
second generation of Vocalis underlying core speech
recognition engine, providing greater reliability and
processing power. Vocalis plays a leading role in
several European Community funded programs, developing
technology such as speaker verification which will reduce
card fraud in banking and telecommunications.
* Strategy: Vocalis will continue to increase the number
of applications offered, while broadening the base of
channel partners. It will look to licence SpeechWare T
to other developers, systems integrators and solution
vendors. It will explore ways to combine Internet
Protocol (IP) Telephony with its existing platforms and
applications.
End of Notes to Editors
Preliminary Statement
Following the flotation in July 1996 this has been a year of
rapid expansion. This demonstrates the success of our strategy
of focusing on the demand for speech driven applications in
the global telecommunications market, a business sector of
which we are at the forefront. The investment we have made in
our people, technology and infrastructure has brought record
results for the Group and we have expanded our sales around
the world.
Results
This year saw a threefold increase in turnover for the Group
to #6.2 million and our first year of profitability. The
company made a profit of #32,000 after interest and tax,
compared to a loss of #1.9m last year. This performance was
ahead of our expectations and came from a combination of
increased sales and careful cost control. Our strategy is to
continue to build our portfolio of speech driven applications,
target telephone network operators worldwide, differentiate
ourselves from the competition by providing total integrated
solutions, and create additional routes to market for our
products.
The Markets
The market for speech recognition based telephony applications
and services is growing around the world. Telephone network
operators continue to seek innovative ways of reducing costs
and increasing revenues from enhanced services and this will
fuel our growth. Vocalis is recognised as having world class
products coupled with proven capability to deploy these on our
own platforms and we are poised to exploit the expected
increase in demand. However, we should remind shareholders
that, until we become much larger, revenue will continue to be
contingent on a small number of high value orders and our
results will remain dependent upon their timing.
Products
Vocalis operates in both the public network and corporate call
centre markets. Rapid growth has been seen in the public
network market and this is now the prime focus of our sales
and marketing efforts.
Speechtel is a multi-application platform, with a wide variety
of voice applications hosted on it such as personal number,
directory enquiries, reverse charge calling, and voice
activated dialling. Our customers, the telephone network
operators, benefit from the ability to introduce new services
quickly to provide increased capacity, cost savings, added
value, and to differentiate themselves from their competitors.
Such services are applicable to both fixed and mobile
networks, all sizes of operators, and are available in many
different languages. Indeed, the geographical spread of our
installations over the last few months attests to the global
appeal of the applications.
Significant effort in product development has continued from
the time of the interim statement. The integration of our new
international standards-based protocols within our product set
will enable us to attract additional sales channels and
partners.
Customers
Our major Speechtel orders show the global nature of our
business, which this year spanned Europe, Asia and the
Americas. The Asian network operator, Digital Communications
Philippines, Inc., selected the directory enquiries, person to
person calling and reverse charge calling Speechtel
applications, all to be accessed through a one number speech
driven front desk service. A further order from a European
network operator included the enhanced directory enquiry
service, which fully automates a directory enquiry call and in
another order, a major operator is installing the automated
reverse charge calling application.
Many of our established customers in the corporate call centre
market are already placing repeat orders, such as Abbey
National, which recently upgraded its telebanking system and
introduced new services. The Anglian Water call centre system,
installed with CSC, was updated to fit into a completely new
telecommunications infrastructure for the customer. This
required the delivery of a new Vocalis Business Application
Platform and application software with additional features.
New Technology
This year saw the release of a second generation of our
underlying core speech recognition engine. Running on
industry-standard Power PC processors, this provides increased
reliability, greater processing power and ultimately enhanced
business benefits for our customers.
Our research and development team has also been active in
European Community funded programs, including CAVE (Caller
Verification in Banking and Telecommunications), which was
successfully completed this year. CAVE resulted in the
development of advanced speaker verification technology that
helps reduce calling card fraud and increases security of
access to telephony services. The success of CAVE has led to
a continuation project, PICASSO (PIoneering Caller
Authentication for Secure Service Operation), in which Vocalis
is playing a leading role. This will further investigate how
to integrate speaker verification technology into true
business applications.
The Future
The communications industry is an exciting arena, with major
changes and developments being announced continually. There
are positive signs that speech recognition technology is now
being rapidly accepted by the corporate world. High profile
media coverage in the USA describes the technology as "mature
and ready to be deployed commercially" in applications that
deliver substantial business benefits.
Our existing installations of Intelligent Network based
applications give us a firm bridgehead from which to extend
our market position. Further application concepts and
increased customer capacity requirements exist to make this
area of our business rich in growth potential. Going forward,
we will continue to increase the number of applications in our
portfolio of telephony services while also broadening our base
of channel partners.
We are also evaluating the potential to licence our speech
technology to other developers, system integrators and
solution vendors. Additionally, we are actively investigating
the prospects for speech applications and consultancy services
in attractive markets outside the telephony marketplace.
A key development in the communications market is the
increasing interest from major corporations, telephone network
operators and internet service providers in the convergence of
voice and data communications networks. At the heart of this
convergence is Internet Protocol (IP) Telephony, which allows
ordinary telephones to be used to send voice signals as data
packets over managed internet backbones. We are exploring ways
of combining IP Telephony with our existing speech recognition
applications and platforms to address this potential market.
Prospects
There are many exciting opportunities before us. We will
select those which best fit our skills and technology while
offering the potential for the highest return on investment.
We will continue to increase our value to shareholders through
our combined efforts to grow revenues while being aggressive
on costs.
We are broadening our base of customer offerings and
continuing to enter into fruitful business partnerships. We
look forward to building upon this year's success and are well
positioned to take advantage of the further growth in the
demand for our core products.
Charles Halle Roy Cotterill
Chief Executive Officer Chairman
Unaudited Consolidated Profit and Loss Account for the year
ended 31st March 1998
1998 1997
#000 #000
Turnover 6,232 2,007
Cost of sales (2,226) (968)
------- -------
Gross profit 4,006 1,039
Other operating expenses (4,063) (3,091)
------- -------
Operating loss (57) (2,052)
Bank interest receivable 129 174
------- -------
Profit (loss) on ordinary activities before tax 72 (1,878)
Taxation (40) -
------- -------
Profit (loss) on ordinary activities after tax
and retained profit (loss ) for the year 32 (1,878)
Earnings (loss) per share - pence 0.10 (6.10)
Fully diluted earnings per share - pence 0.18 -
------- -------
The profit for 1998 and the loss for 1997 arise from
continuing operations.
Statement of total recognised gains and losses for the year
ended 31st March 1998
1998 1997
#000 #000
Profit (loss) for the year 32 (1,878)
Gain on foreign currency translation 15 -
------- -------
Total recognised gains (losses) for the year 47 (1,878)
------- -------
Unaudited Balance Sheet as at 31st March 1998
Group Group Company Company
1998 1997 1998 1997
#000 #000 #000 #000
Fixed assets
Intangible assets 126 - - -
Tangible assets 562 415 - -
Investments - - 1,761 1,761
------ ------ ------ ------
688 415 1,761 1,761
------ ------ ------ ------
Current assets
Stocks 408 479 - -
Debtors 1,597 598 4,469 4,415
Cash at bank and in hand 2,820 2,901 - -
------ ------ ------ ------
4,825 3,978 4,469 4,415
------ ------ ------ ------
Creditors: amounts falling due within
one year (1,983) (1,019) (421) (421)
------ ------ ------ ------
Net current assets 2,842 2,959 4,048 3,994
------ ------ ------ ------
Total assets less current liabilities 3,530 3,374 5,809 5,755
------ ------ ------ ------
Creditors: amounts falling due after
more than one year (55) - - -
Net assets 3,475 3,374 5,809 5,755
------ ------ ------ ------
Capital and reserves
Called-up share capital 1,622 1,605 1,622 1,605
Share premium account 4,187 4,150 4,187 4,150
Other reserves 1,070 1,070 - -
Profit and loss account (3,404) (3,451) - -
------ ------ ------ ------
Shareholders' funds - equity interests 3,475 3,374 5,809 5,755
------ ------ ------ ------
Unaudited Consolidated Cash Flow Statement for the year ended
31st March 1998
1998 1997
#000 #000
Net cash inflow (outflow) from operating activities 164 (2,195)
Returns on investments and servicing of finance
- interest received 129 174
Capital expenditure and financial investment
- purchase of tangible fixed assets (346) (352)
- purchase of intangible fixed assets (138) -
Cash outflow before management of liquid resources
and financing (191) (2,373)
------- -------
Management of liquid resources
- decrease (increase) in short term deposit 400 (1,500)
Financing
New secured loan 55 -
Issue of ordinary shares 54 4,415
Redemption of preference shares - (420)
------- -------
Net cash inflow from financing 109 3,995
------- -------
Increase in cash in the year 318 122
------- -------
The financial information set out above does not comprise the
Company's statutory accounts. Statutory accounts for the
previous financial year ended 31st March 1997 have been
delivered to the Registrar of Companies. The auditor's report
on those accounts was unqualified and did not contain any
statement under section 237(2) or (3) of the Companies Act
1985.
The auditors have not reported on the accounts for year ended
31st March 1998, nor have any such accounts been delivered to
the Registrar of Companies.
END
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