RNS Number:9943O
Systems Union Group PLC
26 August 2003
Systems Union Group plc
Interim Results for the six months ended 30 June 2003
Systems Union Group plc, the global software vendor, today issued its unaudited
Interim Results for the half-year to 30 June 2003.
Highlights
* Profit before tax rose by 23 per cent to #2.0 million (2002: #1.6 million)
* Sixth consecutive half-year of earnings meeting market expectations
* EBITDA increased to #4.0 million (2002: #3.8 million)
* EBITDA margin increased to 12 per cent (2002: 10 per cent)
* Basic EPS improved to 1.7p (2002: 1.6p)
* Adjusted EPS improved to 3.4p (2002: 3.2p)
* Revenues declined by 9 per cent to #34.0 million (2002: #37.5 million)
* Total costs reduced by 11 per cent to #30.0 million (2002: #33.7 million)
* Cash and investments at 30-Jun-03 were #28.2 million (31-Dec-02: #25.2
million) and no debt
* The directors will consider declaring a dividend from the full year
results
Paul Coleman, chief executive officer of Systems Union Group plc, said:
"We are encouraged by the current level of potential orders and are reasonably
optimistic that revenues will improve in the second half. However, we have
already initiated further cost efficiency measures to ensure that if income
levels remain consistent with the first half, there should be an improvement to
earnings. Our focus will be to concentrate on growing the business organically
and by acquisition using the resources available to the Company."
For further information, please contact:
Paul Coleman Systems Union Group plc 01252 556000
Robert Gibb Systems Union Group plc 01252 556219/ 07767 216021
Trevor Bass Fleet Financial 020 7067 0743
SYSTEMS UNION GROUP PLC
INTERIM STATEMENT - full text
The Board is pleased to report increased earnings for the period despite
difficult trading conditions within the IT sector that resulted in a decline in
revenue when compared with last year.
Key highlights for the half-year are
* Profit before tax rose by 23 per cent to #2.0 million (2002: #1.6 million)
* Sixth consecutive half-year of earnings meeting market expectations
* EBITDA increased to #4.0 million (2002: #3.8 million)
* EBITDA margin increased to 12 per cent (2002: 10 per cent)
* Basic EPS improved to 1.7p (2002: 1.6p)
* Adjusted EPS improved to 3.4p (2002: 3.2p)
* Revenues declined by 9 per cent to #34.0 million (2002: #37.5 million)
* Total costs reduced by 11 per cent to #30.0 million (2002: #33.7 million)
* Cash and investments at 30-Jun-03 were #28.2 million (31-Dec-02: #25.2
million) and no debt
* The directors will consider declaring a dividend from the full year
results
The Group remains cash generative and debt-free with net current assets of #28.6
million. In addition, it continues to hold an investment in 9 million of its own
shares, which are carried at a valuation of #6.3 million.
Operational review
SunSystems
We have continued to pursue our strategy to develop global strategic alliances.
An agreement, as announced in June 2003, has been reached with MAPICS, a world
leader in manufacturing solutions. This will result in a minimum of US$1.5
million in royalties over a three-year period. The Company has also reached
agreement to extend its product offerings for pan-application analytics.
A targeting of further business from existing customers has yielded notable
contract wins, particularly in the four key vertical markets of hospitality,
insurance, energy and aid organisations. In addition, a number of new name
customers have also purchased SunSystems licences.
Shell Gas (LPG) will put 300 users onto SunSystems in 21 countries. Ritz-Carlton
has purchased 15 licenses for properties in the US, Europe, the Middle East and
Asia. Hilton International is rolling-out SunSystems across 25 properties in
North America, Latin America and the Caribbean. MetLife and MIIX, both major
insurance companies in the US, and ActionAid, one of the UK's largest
development agencies, have all purchased SunSystems licences.
KPMG has installed SunSystems in its practices in 6 Eastern European countries,
bringing the total to 11 in that region. We have also been selected as a
preferred supplier for government work in New South Wales, Australia.
The newly opened office in Shanghai has already secured its first significant
customer win. Elsewhere in China, SunSystems licences have been bought by a
joint venture between Samsung, Philips and Beijing Datang that supplies third
generation (3G) mobile technology. These sales build on our long history in the
Asia-Pacific region with 2,300 existing SunSystems sites in China and Hong Kong.
Our continuing investment in R&D, both in the UK and Shanghai, has built on the
pre-eminence of our core SunSystems offerings. The focus has been to provide
planned updates to SunSystems 5, SunSystems Collect, SunSystems i2i Purchase
Requisitioning and SunSystems Report Server, together with a variety of service
packs and bespoke work for key customers.
Customer support and service is vital to our business. In addition to providing
up-dated and enhanced products, we have invested in improved global
communication and support systems to ensure our customers benefit from the
application of modern technology.
Pegasus Software
Sales of Opera II now exceed Opera I and the high priority given to quality
control procedures has resulted in a significant improvement in customer
satisfaction levels.
Enhancements to the range included the Advanced Nominal Ledger for Opera II and
XRL, a reporting and analytics offering. Pegasus continues to develop new
product initiatives including the introduction of a unique Instant Messenger
system.
Plans are well advanced to widen the distribution of Opera II outside the UK and
the substantial network of resellers across the UK has been strengthened with
the launch of the Certified Partner Programme. This will provide an improved
range of benefits for resellers.
Pegasus won the Special Achievement Award at the Help Desk Support Excellence
Awards 2003. This scheme recognises distinction in the field of customer support
and commended Pegasus's innovative usage of internet-based technology.
REDtechnology.com
Red is a leading provider of hosting and web technology solutions to
medium-sized enterprises in the UK. Recent product releases included ConductIT,
a sophisticated content management tool, FileIT, a document management tool, and
PromoteIT, an e-marketing communication and analytics solution.
Outlook
We are encouraged by the current level of potential orders and are reasonably
optimistic that revenues will improve in the second half. However, we have
already initiated further cost efficiency measures to ensure that if income
levels remain consistent with the first half, there should be an improvement to
earnings. Our focus will be to concentrate on growing the business organically
and by acquisition using the resources available to the Company.
Bob Morton Paul Coleman
Chairman Chief Executive Officer
26 August 2003
SYSTEMS UNION GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2003
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 30 Dec 2002
(unaudited) (unaudited) (unaudited)
#000 #000 #000
Note
Turnover 2 34,016 37,459 74,631
Cost of operations (25,110) (28,599) (55,420)
Research & development (4,868) (5,051) (10,544)
EBITDA 4,038 3,809 8,667
Depreciation (525) (480) (983)
Amortisation of intangibles (1,858) (1,965) (3,924)
Operating profit 1,655 1,364 3,760
Net interest receivable 334 252 556
Profit on ordinary activities 1,989 1,616 4,316
before taxation
Taxation on profit on ordinary (201) 65 (383)
activities
Profit for the financial period 1,788 1,681 3,933
Earnings per share
3
- basic 1.7p 1.6p 3.8p
- diluted 1.7p 1.6p 3.7p
Adjusted earnings per share 3
basic 3.4p 3.3p 7.2p
- diluted 3.4p 3.2p 7.1p
There is no difference between the retained profit for the period and its
historical cost equivalent.
SYSTEMS UNION GROUP PLC
CONSOLIDATED BALANCE SHEET
as at 30 June 2003
30 June 2003 30 Dec 2002
(unaudited) (audited)
#000 #000
Fixed assets
Intangible assets 60,987 62,842
Tangible assets 4,468 4,105
Investments 6,300 6,300
71,755 73,247
Current assets
Debtors 19,077 18,840
Cash at bank and in hand 21,932 18,874
41,009 37,714
Creditors: amounts falling due within one (12,450) (12,820)
year
Net current assets 28,559 24,894
Total assets less current liabilities
100,314 98,141
Provisions for liabilities and charges (1,071) (1,310)
Deferred income (16,722) (15,907)
Net assets 82,521 80,924
Capital and reserves
Called up share capital 5,198 5,196
Share premium account 9,494 9,478
Merger reserve 48,814 50,582
Warrant reserve 1,340 1,340
Profit and loss account 17,675 14,328
Equity shareholders' funds 82,521 80,924
SYSTEMS UNION GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2003
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
Operating profit 1,655 1,364 3,760
Amortisation 1,858 1,965 3,924
Depreciation 525 480 983
Profit on sale of fixed assets - - (21)
4,038 3,809 8,646
Movement in working capital (335) (1,804) (3,573)
Cash inflow from operating activities 3,703 2,005 5,073
Returns on investments and servicing of
finance 334 252 556
Taxation (109) - (78)
Purchase of tangible fixed assets (888) (460) (799)
Purchase of licences - (1,250) (1,250)
Cash inflow before management of liquid
resources and financing 3,040 547 3,502
Management of liquid resources - - -
Financing 18 40 79
Increase in cash in the period 3,058 587 3,581
Net funds at beginning of period 18,874 15,293 15,293
Net funds at end of period
21,932 15,880 18,874
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 June 2003
Six months ended Six months ended Year ended
30 June 2003 30 June 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
Profit For the period 1,788 1,681 3,933
Exchange adjustments (209) (290) (162)
Total gains & losses relating to the 1,579 1,391 3,771
period
Prior year adjustment - 867 867
Total recognised gains & losses 1,579 2,258 4,638
NOTES TO THE INTERIM ACCOUNTS
1 The financial information contained in this document does not
constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985. Statutory accounts for the year to 31 December 2002 have
been filed with the Registrar of Companies. The auditors have reported on
those accounts; their report is unqualified and did not contain a statement
under section 237 of the Companies Act 1985.
2 SEGMENTAL ANALYSIS
Six months ended Six months ended Year ended
Revenue by type 30 June 2003 30 June 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
Licences 10,963 13,048 26,690
Maintenance 17,148 15,489 31,716
Services 5,905 8,922 16,225
34,016 37,459 74,631
Six months ended Six months ended Year ended
Revenue by region 30 June 2003 30 June 2002 31 Dec 2002
(unaudited) (unaudited) (audited)
#000 #000 #000
Europe, Middle East & Africa 17,847 17,956 37,428
Asia-Pacific 7,010 7,870 16,072
The Americas 4,929 7,502 12,993
SunSystems 29,786 33,328 66,493
Pegasus Software 3,763 3,674 7,254
REDtechnology.com 467 457 884
34,016 37,459 74,631
3 EARNINGS PER SHARE
The basic earnings per share has been calculated on the net profit of
#1,788,000 and the weighted average number of shares in issue of
103,931,000. The adjusted earnings per share has been calculated on the net
profit as adjusted for amortisation of goodwill. The diluted earnings per
ordinary share are based on the net profit of #1,788,000 and on a fully
diluted weighted average number of shares of 104,870,000.
Independent Review Report to Systems Union Group plc
Introduction
We have been engaged by the Company to review the financial information set out
on pages 4 to 7 and we have read the other information contained in the Interim
Report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the Company
those matters that we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of Interim Financial Information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of Group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
KPMG Audit plc
Arlington Business Park
Theale
Reading
RG7 4SD
26 August 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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