Vocalis Group PLC - Final Results
June 09 1999 - 3:00AM
UK Regulatory
RNS No 5182t
VOCALIS GROUP PLC
9 June 1999
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31st MARCH 1999
Vocalis Group plc ("Vocalis" or the "Group"), the Cambridge
based speech recognition telephony company, today announces
its preliminary results for the year ended 31st March 1999.
Highlights of the results include:
Introduction of new business strategy
Innovative products brought to market
Successful placing and open offer raising #8.7 million
(net) completed 21 May 1999
Appointment of Peter Hauser as new Sales Director
Effective cash management
Financial highlights include:
Turnover of #4.8 million in line with expectations (1998
: #6.2m)
Loss of #1.1 million in line with expectations (1998 :
profit of #72,000)
Loss per share 3.36p (1998 : earnings per share 0.10p)
Cash balance of #2.7 million at year end - now #11
million after placing
Commenting on the results and future prospects, Roy Cotterill,
Chairman of Vocalis, said:
"We have ended the year in a strong position to take us
forward into new and exciting areas despite adverse external
trading conditions experienced at times during the year."
"Given the expected explosive growth in speech recognition
technologies, the changes in strategy we have put in place,
and the money raised, we believe we are very well positioned
for the future. We will continue to concentrate all our
efforts in our core technologies of speech recognition and to
capitalise on the opportunities that are clearly emerging.
With the energy, ability and commitment of our staff we look
to the future with confidence and we will pursue our business
with aggressive enthusiasm."
For further information please contact:
Charles Halle/Minesh Patel
Vocalis Group plc
Tel: 0171 600 2288 (9 June 1999)
01223 846 177 (thereafter)
John West/Jeremy Carey
Tavistock Communications
Tel: 0171 600 2288
PRELIMINARY STATEMENT
Review of Results
As expected, Group revenue was #4.8 million during the
financial year under review, compared with #6.2m in 1998. The
loss after tax and interest was #1.1 million, compared to a
profit after tax and interest of #32,000 last year. As noted
in the trading statement issued by the Group in October 1998,
trading conditions in the telecommunications market in general
and the Far East in particular deteriorated in the first half
of the year. As a result, the level of sales originally
anticipated was not achieved, reflecting clearly the lumpy
nature of our business, based on our historic product range.
Operating expenses, however, were reduced to #3.7 million from
#4.1 million last year, and as anticipated the Group reports a
loss of #1.1 million for the year.
New Market Strategy
After streamlining our existing product set in the early part
of last year we formulated a new market strategy. This
strategy will take the company forward into new areas, as well
as continuing to exploit the ones in which we already operate.
Also, it should bring a more regular income.
We are pleased to announce today that Peter Hauser was
appointed as Sales Director. Peter Hauser joins Vocalis from
Premisys where he was VP of international sales and marketing.
Prior to this he has had several senior appointments in
international sales roles all with companies in various
technology fields.
New Initiatives
In the early part of the year we reviewed the company's market
strategy and as a result decided to concentrate on developing
three additional opportunities, SpeecHTML, ENtelAgent and
SpeechWare. It became clear at this time that though we had
sufficient funds to continue development of our existing
business, further funding would be required to ensure rapid
product development to capitalise on the newly defined
opportunities. We are delighted to report that we have been
successful in raising the sum of #8.7m, net of expenses by way
of a placing and open offer.
SpeecHTML: one constraint on the massive potential of the
Internet is the number of computers available to the
population or their immediate access. But with SpeecHTML
every Internet Website host could make each site available to
every person with access to a telephone.
The concept of Web interactive voice response where visitors
to a Website can hear its content and interact with it using
their voice is gaining a significant amount of interest.
Vocalis' SpeecHTML is a product capable of this by
interpreting standard HTML over the telephone. Registering
for a SpeecHTML licence can be done quickly and easily just by
entering the company details onto the SpeecHTML Website. A
telephone number is generated that will link specifically with
the designated Website.
We have had a pilot service operating in the UK and planning
for the installation of a pilot in the USA is well under way.
Following completion of the pilot we have now fully launched
the commercial service in the UK. A number of other vendors
have recognised this opportunity but they require the Website
owner to learn a new language to program their system.
SpeecHTML allows Website owners to have all the benefits of
this service using their existing HTML language.
SpeechMail: Launched on 25th May 1999 Vocalis' SpeechMail
offers people access to their e-mails from any telephone.
Using spoken commands, the mailbox can be managed without the
need for a computer or direct Internet Access.
ENtelAgent: This opportunity lies in the development of "path-
finder" speech utilities which will provide a compelling
reason for our corporate market, regardless of industry type,
to purchase them for their telephone call handling
requirements. An example 'utility' is the capability of
ascertaining, from a population of as many as 20 million, who
the incoming caller is (regardless of where the call is being
made from) and presenting the information to call centre
agents, making significant improvements in overall
productivity. We expect to bring this product to market in
the coming year.
SpeechWare: As speech recognition becomes a more widely
adopted technology, a growing number of systems integrators,
both large and small, are experimenting and building their own
applications and products. Whilst continuing to maintain a
reputation for leading edge technology and providing
specialist service and support through our SPEECHtel and
ENtelAgent products, we will offer our core speech recognition
technology, SpeechWare, to address this gap in the market.
SpeechWare is our highly featured, speech recognition
technology that will offer ease of use to the developer
community.
New Technology
We have continued to develop the core speech recognition
technology in line with the requirements of our products. We
have introduced a variety of new speech models suitable for
different languages; many of these models are now in use
around the world. We are constantly working on improvements
to processes and techniques that will improve our core
technology. The growth in the power of microprocessors is such
that techniques and algorithms that in the past could only be
used in laboratory research are now being deployed in the
field.
We have introduced new algorithms which give us the ability to
recognise even larger vocabularies. Other improvements to
our processing techniques, as well as making use of the
increasing power of the processors we use, have enhanced the
performance of systems in noisy and otherwise adverse
environments.
Partnerships
We continued to generate significant new business from our
existing partnership with EricssonTelecom AB for
telecommunications operators. Further product development to
support international telecommunications standards has
increased the appeal of SPEECHtel to other non-Ericsson
operators and switch vendors.
In the enterprise applications, we continued to do business
with another established partner, Logica plc.
We are working to increase our channels to market and, to that
end, we have signed agreements with Dialogic Corporation and
Natural Micro Systems, for deployment of SpeechWare, our
packaged speech recognition technology. The coming year
should see the first sales fulfilled.
EU projects
Vocalis continues to play a leading part in European Union
sponsored research projects. New projects started this year
include PICASSO, in which our speaker verification algorithms
are being tested in a variety of environments. Nationwide
Building Society is taking part in this project and will be
using our technology to provide a security check on customers
before they can make a telephone transaction.
As the REWARD project comes to an end, the results and
findings from the trials that have been run are now being
collated and summarised. All the results will be shared by
the partners involved in the project. This will help us to
create more sophisticated telephone marketing systems.
As part of our constant mission to collect up-to-date
databases we are taking part in SPEECHDAT Car, which aims to
build a European speech database for the mobile environment.
Collection for this is underway and should be completed
towards the end of this year.
Delivered Solutions
Given our new market strategy and focus on four specific
product areas all resources are now being concentrated on
these four specific product areas outlined in our new market
strategy. This has resulted in a major internal re-
organisation of product development activities. Adopting a
modular format to delivery enables us to have a more scalable
approach. The streamlining of operations enables increased
focus on product and market opportunities that are presented.
By putting systems in place that enable the fast development
and implementation of production we reduce lead times and
increase our speed to market.
One of the early successes of this reorganisation has been the
recent release of a standard configuration of SPEECHtel. Our
new offering supports the latest industry standard for
telecommunications interfaces and is therefore easy to
integrate into an existing telecommunications operator with a
compatible network. We have delivered this configuration to
two commercial sites this year and have an expectation of
further business from both these customers and other sites.
A large extension to an existing installation was completed
this year. This site in Mexico, we believe, represents the
largest deployment of a speech-enabled Intelligent Peripheral
in the world. This further proves that our products are
capable of large mission critical deployment.
The Future
Given the expected explosive growth in speech recognition
technologies, the changes in strategy we have put in place,
and the money raised, we believe we are very well positioned
for the future. We will continue to concentrate all our
efforts in our core technologies of speech recognition and to
capitalise on the opportunities that are clearly emerging.
We will continue to focus our efforts on being cost effective
and developing innovative products to ensure we are in a
leading position in this dynamic marketplace. With our new
strategy in place, which is already showing positive signs, we
are confident that Vocalis is at the leading edge of
developments in the speech recognition market.
Roy Cotterill Charles Halle
Chairman Chief Executive
9 June 1999
Consolidated Profit and Loss Account for the year ended 31st March 1999
1999 1998
#000 #000
Turnover 4,820 6,232
Cost of sales (2,395) (2,226)
------- -------
Gross profit 2,425 4,006
Other operating expenses (3,659) (4,063)
------- -------
Operating (loss) (1,234) (57)
Bank interest receivable 152 129
Interest payable (16) -
------- -------
(Loss) profit on ordinary activities before tax (1,098) 72
Taxation - (40)
------- -------
(Loss) profit on ordinary activities after tax and
retained (loss) profit for the year (1,098) 32
(Loss) earnings per share - pence (3.36) 0.10
Diluted (loss) earnings per share - pence (3.36) 0.10
The loss for 1999 and the profit for 1998 arise from continuing
operations.
Statement of total recognised gains and losses for the year ended 31st
March 1999
1999 1998
#000 #000
(Loss) profit for the year (1,098) 32
(Loss) gain on foreign currency translation (18) 15
------- -------
Total recognised (losses) gains for the year (1,116) 47
======= =======
Balance Sheet as at 31st March 1999
Group Group Company Company
1999 1998 1999 1998
#000 #000 #000 #000
Fixed assets
Intangible assets 92 126 - -
Tangible assets 650 562 - -
Investments - - 1,761 1,761
----- ----- ----- -----
742 688 1,761 1,761
----- ----- ----- -----
Current assets
Stocks 377 408 - -
Debtors 1,058 1,597 4,614 4,469
Cash at bank and in hand 2,704 2,820 - -
----- ----- ----- -----
4,139 4,825 4,614 4,469
----- ----- ----- -----
Creditors: amounts falling due
within one year (2,271) (1,983) (512) (421)
----- ----- ----- -----
Net current assets 1,868 2,842 4,102 4,048
----- ----- ----- -----
Total assets less current
liabilities 2,610 3,530 5,863 5,809
----- ----- ----- -----
Creditors: amounts falling due
after more than one year (197) (55) - -
Net assets 2,413 3,475 5,863 5,809
----- ----- ----- -----
Capital and reserves
Called-up share capital 1,638 1,622 1,638 1,622
Share premium account 4,225 4,187 4,225 4,187
Other reserves 1,070 1,070 - -
Profit and loss account (4,520) (3,404) - -
----- ----- ----- -----
Shareholders' funds -
equity interests 2,413 3,475 5,863 5,809
----- ----- ----- -----
Consolidated Cash Flow Statement for the year ended 31st March 1999
1999 1998
#000 #000
Net cash (outflow) inflow from operating activities (217) 164
Returns on investments and servicing of finance
- interest received 152 129
- interest element of finance lease rentals (16) -
-----
Net cash inflow from returns on investments and
servicing of finance 136 129
Capital expenditure and financial investment
- purchase of tangible fixed assets (340) (346)
- purchase of intangible fixed assets (16) (138)
-----
Net cash (outflow) from capital expenditure and
financial investment (356) (484)
Cash (outflow) before management of liquid resources
and financing (437) (191)
----- -----
Management of liquid resources
- decrease in short term deposit 200 400
Financing
Secured loan - 55
Funds received from sale and leaseback transaction 294 -
Issue of ordinary shares 54 54
Repayment of secured loan (2) -
Capital element of finance lease repayments (25) -
----- -----
Net cash inflow from financing 321 109
----- -----
Increase in cash in the year 84 318
----- -----
The financial information set out above does not comprise the
company's statutory accounts. Statutory accounts for the
previous financial year ended 31 March 1998 have been
delivered to the Registrar of Companies. The auditors' 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 yet reported on accounts for the
year ended 31 March 1999, nor have any such accounts been
delivered to the Registrar of Companies.
END
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